E commerce full notes for mba. 1. KARISHMA SIROHI 1 UNIT 1 Introduction to E- Commerce: E- Commerce refers to electronic transactions. The need for security in e-commerce transactions and how to ensure it . purchase orders, delivery notes needed in B2B e-commerce so that e- documents can. Check out E-Commerce Full Notes Pdf Download. We provide caite.info E- Commerce study materials to caite.info student with free of cost and it can download easily.
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lesson introduction to e-commerce introduction in the past few years, enterprises across the globe have experienced significant changes in their business. Networking, Different Types of Networking for E-Commerce, internet, intranet, EDI Models of E-Commerce; Model Based on Transaction Type, Model Based. Lesson 1. INTRODUCTION TO E-COMMERCE. INTRODUCTION. In the past few years, enterprises across the globe have experienced.
Future advances include digital money and e-wallets, and. The four major categories of home banking ii-t historical order are: These include not just serious affronts to human values such as child pornography. Changing consumer needs driven by online commerce. Even when you grow to have many employees, you can set up your offices in class B or C space, as you have no need for a fancy store in the right location. Its scope includes not only buying and selling but also services, fulfilling the needs of customers and collaborating with business partners. Business Orgn.
The third party service could be other web servers that make up the digital library, information processing tools, and electronic payment systems. The internet is the most well known component of information superhighway network infrastructure.
Today, the internet is an information distribution system spelling several continents. In very general infrastructure targets not only one electronic commerce applications such as video on demand or home shopping but a wide range of computer based services such as e-mails, EDI, information publishing, information retrieval and video conferencing.
Network making up Internet: Academic Internet consists of various government network, regional networks, campus network, and some international networks. The business internet consists of on line services, value added networks, and other e mail only services. The academic and business networks can talk to each other through language translators, called gateways, stationed at the network border. In the past, because only mail gateways were widely implemented and deployed, the most interoperable application or the least common denominator for the entire internet was electronic mail.
The incredible growth of the internet can be divided into 6 stages: Restricted public data networks for research and education NREN 6. National information infrastructure I-Way The first stage, experimental networking, covers the early years under the aegis of the DOD ARPA and the province of a relatively small technical community.
That group developed not only the technology but the cooperative mechanism that made it possible to scale and allow further innovation to occur. The second stage, discipline specific research , grew out of the more general ARPANET and began to build international online communities.
CSNET, for instance, linked computer science researchers from all over the world. Since the backbone network was launched, its traffic has doubled each year and its transmission capacity has increased more than thirtyfold to 45 million bits per second.
The fourth stage, privatization and commercialization present , involves removing government subsidies to regional networks and dismantling the barriers imposed by restricted acceptable usage policies. The network extends far beyond the research community and today supports not only the expanding backbone services, but also commercial transactions and extensive connections for commercial organizations.
The fourth stage recognizes the changing nature of the networking marketplace. E business on the other hand represents the transformation of organization business and functional process through the application of technologies, philosophies and computing paradigms of new digital economy. E commerce includes: Electronic payment system: EPS are becoming central to online business process innovation as companies look for ways to serve customers faster and at lower cost.
The most important function of e-commerce over the I way. As e-commerce involves the exchange of some form of money for goods and services, payment system are integral part of electronic commerce system. Because of the online transactions in electronic commerce, there is a rising concern for the security of these systems. Work on EFT can be categorized on three broad categories: Digital Token Based Payment System: New forms of financial instruments called electronic tokens in the handled in the form of electronic cash or checks.
E-tokens are designed as electronic analogue of various forms of payment backed by a bank or financial institution, basically they are equivalent to cash that is assured by a bank.
Electronic tokens are of three types: E-cash or real time: Such as e-cash.
Prepaid or debit card: Postpaid or Credit card: It can be based on e-payment protocol that supports a series of payment transactions using electronic tokens or coins issued by third party. There are three types of users in this payment system: There are three types of transactions in this payment system as given below: There are two types of implementations of this system as given below: There are three participants involved in this system as given below: The client can store the coins in the client wallet, withdraw coins from that and request new coins from the bank.
This software will interact with the bank to perform validation and authentication. Also the software can make refunds, if required. The bank can issue new coins to the client, validate the coins when presented. They are designed to accommodate the many individuals and entities that might prefer to pay on credit or through some mechanism other than cash.
In e-check buyer must register with a third party account server before they are able to write electronic checks. The account server also acts as a billing service. The registration procedure can vary depending on the particular account server and may require a credit card or a bank account to back the checks.
Once registered, a buyer can then contact sellers of goods and services. To complete a transaction, the buyer sends a check to the seller for a certain amount of money.
These checks may be sent using e mail when deposited. The check authorizes the transfer of account balances from the account against which the check was drawn to the account to which the check was deposited. One such substitutes is the smart card. Smart cards are credit and debit cards and other card products enhanced with microprocessors capable of holding more information than the traditional magnetic stripe. Relationship based products are expected to offer consumers far greater options, including the following: There is nothing new in the basic process.
If consumers want to purchase a product or service, they simply send their credit card details to the service provider involved and the credit card organization will handle this payment like any other.
We can break credit card payment on online networks into three basic categories: The low level of security inherent in the design of the internet makes this method problematic. Authentication is also a significant problem, and the vendor is usually responsible to ensure that the person using the credit card is its owner. Without encryption there in so way to do this.
One would be the cost of a credit card transaction itself. Such cost would prohibit low value payments by adding costs to the transactions.
After a certain period of time, one credit card transaction for the total accumulated amount is completed. To make a credit card transaction truly secure and nonrefutable, the following sequence of steps must occur before actual goods, services, or funds below: A customer presents his or her card information securely to the merchant.
The merchant relays the credit card charge information and signature to its bank or online credit card processors. Verification mechanism can be designed with many of the attributes of electronic tokens, including anonymity.
They differ from electronic token systems in that 1 they depend on existing financial instruments and 2 they require the online involvement of at least one additional party and, in some cases, multiple parties to ensure extra security. OTPPs have created a six step process that they believe will be a fast and efficient way to buy information online: The consumer acquires an OTPP account number by filling out a registration form.
This will give the OTPP a customer information profile that is backed by a traditional financial instrument such as a credit card. To purchase an article, software, or other information online, the consumer requests the items from the merchant by quoting her OTP account number. The purchase can take place in one of two ways: The OTPP payment server sends an electronic message to the buyer.
The buyer responds to the form or e mail in one of three ways: If the OTPP payment server gets a YES from the customer, the merchant is informed and the customer is allowed to download the material immediately. The role of e-commerce in banking is multifaceted impacted by changes in technology. Rapid deregulation of the emergence of new banking institution and basic economic restructuring.
Many banks feel that in order to be a profitable they need to reduce operating expenses and maintain strict cost control. This philosophy is evident in many mergers and acquisition occurring in the banking industry. So, the challenge behind bank restructuring lies in adequately operationalizing the motion of cost control.
Changing dynamics in Banking Industry: There are 5 distinct factors contribute to the new competitive environment: Changing consumer needs driven by online commerce. Optimization of branch networks in order to reduce cost. Changing demographic trends and potential new consumer market. Cross industry competition caused by de-regulation. New online financial products. Changing Consumer Needs Consumer requirements have changed substantially in the last decade customers want to access account related information download account data for use with personal software products, transfer funds between accounts, and pay bills electronically.
Many consumer requirements are based on simple premise customers and financial institutions both seek closer and more multifaceted relationships with one another. Customers want to be able to bank at their convenience, including over the weekend or late at night. Bankers want more stable and long term relationships with their customers.
Electronic banking provides a method of communication that will enable the bank customer to be reached served, and sold products and services in their homes and offices whenever it is convenient for them twenty four hours a day, seven days a week.
Cost Reduction The central goal of most mergers is to reduce operating costs. During the decade , the number of banks in the United States fell by 27 percent. In general brick and mortar branches cost at heavy. As banks merge to reduce their operating costs, they are obviously growing in size.
If banks are going to compete with these larger competitors, they are going to have to address Providing online financial services can address both these needs. Demographic Trends Consumers are increasingly careful about their personal finances. Social demographic and economic changes have altered the way value their time and money.
People spend more time working than ever before, and therefore place a higher premium on their leisure time. Thus, they are a very receptive audience for time saving products and services. In addition, the reduced level of job security and the need to plan for the future has heightened concern over personal debt, retirement planning, tax planning , and saving for college.
The companies that take advantage of this opportunity by targeting the appropriate customers with appropriate products and services will have a lasting competitive advantage. As it prov8ides convenience and the ability to customize products and services on a mass level electronic delivery of these products and services will be one of the key means of achieving this advantage.
Regulatory Reform Banks occupy a unique strategic position as they act as intermediaries in redistributing capital from areas of excess to areas of scarcity. This role has made financial services a closely watched and regulated industry as government is intersted in the control and stability of this redistribution. Recent years have brought about far reaching regulatory changes that have removed many of the competitive protections banks enjoyed for a long time.
The ability to provide complete financial services is necessary if commercial banks are to survive increasing competitive from mutula funds, brokerage firms, and insurance companies. Technology based financial Services Products The growing importance of computer technology is another factor complicating predictions about the future structure of baking.
Some observers believe that additional development of electronic cash, such as smart cards, could stimulate further baking consolidation. They point to the fact that the start-up costs associated with electronic payments technology cab be high in part because electronic cash requires large investments in computer software and other resources to establish a network of secure electronic transaction.
The development of electronic banking might actually increase competition in banking markets and lower bank operating costs. Electronic banking offers an inexpensive alternative to branching to expand a bank's customer base and many banks are using electronic banking to increase service to their customers. Many banks have started web sites on the internet, and many plan to offer banking services over the internet. Some banks are laready offering certain banking services over the telephone.
Smart cards and other forms of electronic cash could be the key to consumer acceptance of home banking, eventually allowing banks to reduce the number of their physical branches. Financial institutions work interested in turning the home banking concept into reality as early as The American banker had a set of articles promoting the virtue of home banking.
Success of home banking: There are several factors that lead to believe that home banking has a good chance of success these time. Consumers up the learning curve. Increasing consumer awareness.
The alternative is too expensive. Huge competition. There are several factors that lead us to believe that home banking has a good chance at success this time. C ver the years, consumers have demonstrated a high level of acceptance of basic electronic services. However, the use of technology is not just restricted to ordinary consurner-bank interface or retail banking.
Evidence indicates that banks and software companies are begin- ning to find a receptive audience among PC users wanting to simplify bill paying, cheekbook balancing, and tax-related tasks. Mainstream magazines are in- creasing the amount of coverage given to computer-related topics. As a result, consumers are increasingly aware of alternatives to traditional branch bank- ing. As consumers become aware of alternatives, they are going to demand more. Banks that fail to meet expectations face the possibility of mass exodus.
For a long time, home banking was a classic. Conversely, without a wide array of services, there was little consumer in- terest.
This problem is resolving itself. Today there are more than 30 million PCs in American homes, and, for the first time in history, consumers are now spending more on PCs than TV sets. Modem penetration into house- holds is a key issue for home banking, as online services require a modem. Clearly the technology exists to make home banking a reality. Home banking implementation approaches: Proprietary bank dial up services.
Off the shelf home finance software. Online services based banking 4. Pushed by growing consumer demand and the fear of losing market share, banks are investing heavily in. Collaborating with hardware, software, telecommunications, and other companies, banks are introducing new ways for consumers to access their account balances, transfer funds, pay bills, and buy goods and services without using cash, mailing a cheek, or leaving home.
The four major categories of home banking ii-t historical order are: A home banking service, in cornbina on with a PC and modem, lets the bank become an electronic gateway to customers' accounts, enabling them to transfer funds or pay bills directly to creditors accounts.
This category is a key player in cementing relationships between current customers and helping banks gain new customers. This software market is attracting interest from banks as it has steady revenue streams by way of upgrades and the sale of related products and services. This category allows banks to set up re- tail branches on subscriber-based online services such as Prodigy, CompuServe, and America Online.
This category of home banking allows Pt,Mbanks to bypass subscriber-based online services and reach the customer's browser directly through the World Wide Web. In contrast to packaged software, which offers a limited.
Set of services, the online and WRWW approach offers further opportunities. As consumers buy more and more in eyberspace using credit cards, debit cards, and newer financial instruments such as In the future, an increasing number of paper-based, manual financial tasks may be performed electroni- cally on machines such as PCs, handheld digital computing devices, inter- active televisions, and interactive telephones, and the banking software must have the capabilities to facilitate these tasks.
E- Commerce and Retailing: Retailing is expected to change with a rapid development of new online sales and distribution channels that literally used from anywhere, anytime from work, school and a hostel, car or airplane. These developments should base impact resulting as much as the catalogue retailing and T. However, retailer needs to consider the following issues and developing a business order.
Product 2. Software interface issue 3. Process 4. Payment issues 5. Market penetration issues. Changing retail industry dynamics: So, the important factors affected retail industry: Over building and excess supply 2.
Change in consumer demographics. Change in consumer behavior 4. Technology improvement. Online retailing success stories: CVC international 3. Web based travel agencies. Open Vs Closed Model: An open system such as web offers two additional key benefits: The authority allows the bank to enhance its brand awareness and maintain direct access to its customer.
The open system also allows bank to offer an expended array of financial services and to choose their business partners when offering additional services such as brokerage accounts and mutual funds which leads to stronger customer relationship and increased revenue. Close system: In this system using proprietary financial management software such as Quicen, the software firm act as a intermediary between the bank and its customer. In managing the customer relationship the software provider controls the interface design, thus diminishing and even eliminating any reference to the bank itself.
This software provider also control the selection of financial providers and determine the choice of services and availability of those services. Consumer merchandise model: The competitive business environment is forcing firms to re-engineering financial management process. General ledger system and spread sheets traditional method prove inadequate when data is voluminous and worldwide, when corporate structure change because of mergers and acquisition and when timely and reliable consolidation, budgets and forecasts are essential.
In this section, we provide the setting by elaborating on what financial information system are intended to accomplish. What exactly is financial system: It incorporates the following tasks: Financial accounting activities: It includes: Processing, maintaining, collecting, transmitting and reporting data about financial event.
Supporting financial plan and preparing budget 3. Supporting the preparation of financial statement. Management accounting activities: Reporting historical transaction to external parties.
Accumulating and reporting false information. Safeguarding the asset of company. Providing insight with respect to the value of future transaction. Financial intranet: Accounting software provided a way to enter transactions and manage those transaction in the form of an accounting trial. The information is there but it is very difficult to obtain. Intranet can play a big role in solving this problem because this will allow the Business problem: Managing information about monthly progress towards annual goals of an organization.
Allowing managers to spend time in manipulating not gathering the data. Intranet solutions: Create a central database of measurement information using the web. General ledger 2. Accounts payable 3. Accounts receivables 4. Asset management 5.
Costing 6. Billing and invoicing Intranet and transaction accounting: Traditional telex and fax is. Now a business. Electronic business can result in better transactions, wide market coverage by offering the benefits of.
Application of electronic. It greatly facilitates a firm to. This enables firms to have an edge. If distributors, dealers and sales force do not get the right information at the right time, there will be a.
Responsive, timely information flows. Some marketing studies reveal that most sales people spend nearly 75 per cent of their time on the. In addition, misplaced or undelivered information results in low sales records.
In any business where maintaining close contact with customers is a priority consideration, electronic. The mechanism of electronic operations in business facilitates planning and execution of meetings. Executive management meetings, seminars, workshops, symposia and conventions take a great deal of.
Reports and surveys need. And there are always the headaches of late breaking. The global business environment is moving faster than ever before. Increased competition at home and. This pressure has. Traditionally, the response in the face of competitive threat has been to reduce costs by rationalizing.
Whether business to business B2B or business to customer B2C there are benefits to all parties. Better management information and better. The payment process can also be. It developed a new computer standard to.
Today its descendant,. XML, a lighter, simpler data interchange standard is used by B2B sites. Simple e-commerce sites first. The early e-commerce sites were virtual catalogues, simply listing products for sale. Ordering was off-line, through e-mail, phone or fax. By the technology had advanced greatly to. E-commerce quickly became popular with consumers and suppliers. For customers, it. For suppliers, it allowed them to reach an unlimited international audience, 24 hours a day, 7 days a.
Today e-commerce is widely used and growing fast.
B2B is the largest, fastest. According to IDC, this year, it is expected to account for two. Internet access to more on-line households. Future advances include digital money and e-wallets, and. Sites can work with fulfilment centres. The Internet is creating unprecedented. Yet it one of its major problems. In addition web businesses win by following rules quite different.
An e-commerce environment handled in a proper manner, with the right customisation of. The customers can get the. Electronic commerce, being a new field, is just developing its theoretical or scientific foundations.
Ii is. The major disciplines of E-Commerce with some samples of issues with. Many issues of marketing offline are relevant to online E-Commerce - for example, cost benefits of. Many of the issues in the infrastructure of E-commerce, such as languages, multimedia, and networks,. Intelligent agents play a major role in E-Commerce as. Consumer behavior is the key to the success of B2C trade, but so is the behavior of the sellers. Issues such as using the Internet as a substitute for.
The back-office operations of electronic transactions are similar to other transactions in some respects,. For example, auditing electronic transactions presents a challenge for the.
Electronic commerce efforts need to be managed properly, and because of the interdisciplinary nature. Also, E-Commerce is. This process is carried out primarily in five levels, and the main aspect of e-commerce is a. There are five major segments under the broader category of e-business. However, the following are. E-business is the process of conducting business on the Internet. Its scope includes not only buying. This helps to set up online stores to offer preferred pricing to some vendors.
This includes internet-enabled initiatives of an enterprise to form commercial linkages with another. In this form of e-commerce, e paperwork and time-to-.
In a B2B transaction, the interaction is between businesses. For example, a website that is catching for. It helps them in quickly closing the transactions and the buyer can get quality, material and. B2B commerce is a growing business in the e-commerce arena- with the increasing use of the internet,. It facilitates access to the ordering. Its rate of. B2B transactions are however relatively high value in nature and organizations are slow to change.
In an increasing competitive scenario, e-commerce offers highly attractive cost. In this form of e-commerce, a business firm places orders for. It is for the customers to buy stores from the web. The problem to be recognized in this is to secure. B2C e-commerce involves selling of goods and services to consumers or end users. It allows them to. In a B2C transaction, the interaction is between a consumer and the preferred business. For example,. In this category of e-commerce, businesses use the internet to offer to consumers sales and services.
The two-way accessibility of the internet enables operating. Businesses are using these. Since e-commerce makes just in time. B2C is the most popular form of e-commerce, wherein the individuals are directly involved in B2C e-.
The sites Amazon. These websites spell goods. The two way accessibility feature of the internet enables. Here interaction is between consumer to consumer.
For example, in sites like e-Buy Bid or Buy. This form of e-commerce is nothing but the cyber version of the good old auction houses. If anyone. The buyer gets in touch. E-commerce, by empowering the customer, has been strategically redefining business. An example of.
If an airline is willing to issue a ticket on the customers offered price,. This is concerned more with marketing a corporation's internal processes more efficiently. Now that we have learned how to identify industry value chains and break each value chain down into. The analyst then reviews the environment in which the.
By considering all of the issues that it faces in a systematic way, a business unit can formulate. Dell identified its strengths in selling directly to customers and in designing its. It acknowledged the weakness of having. Dell faced threats from competitors such as Compaq and. It also saw the Internet as a potential marketing tool.
Dell decided to offer customized computers built to order and sold over the phone, and. Dell's strategy capitalized on its strengths and avoided relying on a dealer. These benefits are just starting to materialize, but they will increase significantly as E-. Commerce expands.
It is not surprising that some maintain that the E-Commerce revolution is just 'as. For example, dog toys which can be purchased. The biggest challenge before successful e-commerce over the Net is that of changing the minds and.
Further, optimism and. Most of the business people do not understand the significance and implications of the electronic. Lack of interest and willingness to make a paradigm.
Many companies are not willing to accept that their businesses need a. In short, information technology. The IT sector is. To improve the country's. All the. This high cost of infrastructure development for e-business is also including. The people in India still show hesitancy in buying through the Net.
Lack of quality products, timely. Though the Internet is continuing to grow at a rapid rate, along with e- commerce transactions, the. Lack of adequate imagination and understanding. The old business habits are demanding and controlling the business. The risk adverse. In India, distribution channels are just one part of the problem related to e-payments. The bigger. All credit cards related transactions are approved offline and given the high. Other drawbacks may include that the buyers are quite prepared to boot the real mail for e-mail.
The e-. Unfortunately, this also has negative effects. So, security needs to be extended to customers to gain. Since these two are difficult, the. So, it is desirable that the Net be turned as a potential free trade.
Another important problem is lack of comprehensive cyber laws so as to ensure safety and protection. The crying need of the hour is urgent action to be taken by the Government to enact cyber. Cyber laws are not in place. In other countries, the business community is moving fast ahead, and. The technology is changing the business paradigm so fast;. In addition to them, the fear regarding the security aspects of online transactions without proper.
Adding to. This is actually a big hurdle on the way which would solve one big hurdle. A key source of dissatisfaction is the out of stock dilemma. In most cases,. The Net is becoming more main-stream and the expectations. The presence on the web alone will not always ensure successful e-commerce. Having a website or dot.
They must accept the true strength of this new electronic medium of business and. There are many people who are connected to the internet but cannot browse the web and they are only. The use of the Net for trade requires a complex introduction of servers, browser software. Failures in networks and the Net itself can play havoc.
We read of frequent press reports of internet. There are also reported evidences of enforcing new censorship. Another problem is that advertising an the Net tends to focus on e-commerce rather than on brands. The biggest thing going for it is a brand image and power.
Though the already existing name is known. A concern should be to preserve. The government is not taking a serious view of e- commerce related information technology in terms. Spreading awareness, imparting education, of the benefits of e-commerce, enacting. Government is. Most of the PC users surf the Net for information rather than potential commercial.
This means that the market for this migrated content is very large. Many owners use the. The business community is extremely an important sector to be targeted for the introduction of any. It means it is the business community that sustains e-commerce. It motivates the people who share the courage and. There are many reasons for this as they provide better selection, prices, stock, quality.
Software houses particularly in India are not devoted to ensuring strong expertise in the supply chain. The technologists who are out. It is becoming clearer that cyber structure is not enough to support cyber growth. Such a growth rate. The profit strapped, not-struck. One should not forget about low entry barriers, and as a result, cyber competition is perhaps more. Cyber competition needs improvement in better contents, faster delivery of services and online.
It is a great task to pacifying angry live customers and then think how difficult it is to e-. This means again more investment and more capitalization which is further from. The web business structure will have to undergo a drastic change and be reengineered. It is not just. It is about breaking free and creating new web services. E-commerce is still being dominated by large corporations.
Small and medium sized business houses. Censorship is. Indian citizens enjoy unprecedented degree of freedom of. Development in any field may prove.
Electronic commerce is still in its infant stage. Indian commerce is establishing itself in the area of. The concept of e-commerce is still in evolutionary stage, it is a job that still needs to. Only a few. E-commerce has yet to take off in India, because Indian consumers are wary of leaving their re credit. Electronic Data Interchange, means a way to exchange standard documents in intra or inter. Business to Business, means e-commerce transactions taking place between business to business.
Consumers to consumers e-commerce, means e-commerce transactions taking place between.
Cyber Law: Cyber law is that law which is used to deal with all cyber crimes, i. Electronic commerce is the ability to perform transactions involving the exchange of goods or services. Long employed by large businesses and. These enabling factors include improved broader competitive access to networks, and the reduced cost and.
The rapid growth. Further, with relentless. Traditionally, in the physical world, we distinguish between three different types of information-driven. TV production , those that define the form or format e. TV broadcasting station and. The following ten functions must be provided in order to EC to occur; in essence, they are the enablers of.
For example, the. E-commerce is related to execution of business transactions through electronic messaging devices, there. But like in real physical. As e-commerce is rather evolving at a fast pace, the importance of developing. Such a framework needs to encompass within. There are certain basic. Preferably, service providers and application designers will be able to use these services. It is thus very much logical that any generic framework developed for e-.
As the technological and business logic develops in its natural flow, e-commerce framework should be. An example of such possible business. There will be many business enterprises that will shift from traditional commerce to electronic commerce. It is very much logical to. Electronic commerce transactions involve all kinds of legacy and newly developed devices and media, and. A generic framework developed for Electronic commerce must.
These products are actually enabled by information technology, not just distributed more efficiently by it. Information products include electronic publications, catalogs, videos, and the like, as well as interactive. Many of these products will. Customers can, for. This capability adds a customer-driven activity - a design phase - to the purchase cycle.
Electronic commerce need to support advanced types of revenue collection in addition to traditional. For example, an information product. One innovative approach that permits usage accounting and payment.
Meterware, electronic cash and checks that don't need an online payment. These methods make a lot of sense in a low distribution cost. These include paper checks, mainframe-. Electronic commerce must accommodate the technologies and. A framework developed with all of these needs and.
We next describe the specific activities and functions this infrastructure must support. The specific functions associated with these activities in an electronic commerce setting are discussed.
Note that not all of these activities are performed in every transaction, nor are they necessarily. Also, all activities are not necessarily. Finally, these activities can vary in complexity and importance depending on the. A major problem associated with the advertising and shopping activity is the cost and time expended in. We need better. Buyers and sellers may elect to negotiate the terms of a transaction - that is, the terms of exchange and.
These terms may cover delivery, refund policies, arranging for credit, installment payments,. These terms can be standardized for. Often, in the case of two. This process will frequently also include authentication of. The order may be verbal, in writing, or electronic. It usually includes an acknowledgment. This agreement can be. In the case of some commodity purchases, the entire transaction may begin at this ordering. The ordering activity applies to all. Even requests for free public information.
Once a seller has delivered goods or services, a bill is sent to the buyer. This bill generally includes. Sometimes, a seller may require payment in. Sometimes, a supplier sends advance shipping notification, and the customer agrees to authorize. And in some cases, as with the free information. The buyer, or some financial intermediary, eventually sends some form of electronic payment this could.
This payment may be sent for a single item, on a. Either before, after, or concurrent with payment, the seller arranges for delivery of the purchased goods or.
Policies regarding. For larger, more complex orders, distribution may involve more than two parties. An ancillary distribution service involves acting. This activity is particularly important to corporate customers and suppliers. Both buyer and seller must. Account and management information system records must also be. This activity can involve third parties if the transacting businesses outsource their accounting.
The E—Commerce core consisting of basic infrastructure which will enable the e-commerce. The three layers, starting from the. This layer will include all hardware and network infrastructure that will act as physical infrastructure to.
This layer include all vendors and other parties engaged in the business activities which facilitate e-. The list of such business activities may include following:. Developing standards and formats for content creation, distribution and deployment this includes. These building blocks are likely to become the standard digital objects of commerce; over time, they will. This layer corresponds to the real business transactions that take place using the digital messaging.
A few of the common business applications that can be offered online can be listed as below:. All over the world, globalization and the new information and communication technologies that are.
Even developing countries like Kenya, therefore, can no more treat the internal and external sectors. The legal and financial framework for one sector directly affects the other sector.
While the. The latter, though perceived as being facilitator in content, requires the. There are in fact many things that governments might reasonably want to. These include not just serious affronts to human values such as child pornography. These are all issues on which countries legislate already. The existing rules and laws. The problem is not whether the Internet should be. This entirely new sort of communication poses several entirely new sorts of problem.
A legal framework for e-commerce has been provided by the Information communication. The ICT Act essentially seeks to address three areas or perceived requirements for the digital era:. It involves the promotion of the information and communication technologies and, especially, e-. The adopting of these technologies and all they involve in the matter of a completely new type of. Fortunately today several e-governance projects are underway in several states of Kenya. The introduction. Not only.
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Huge investments were made in enterprise resource planning system implementations but still they struggle to get timely information that is needed to make effective business decision and to ensure continuous growth of enterprises. Placing "e" in front of any process or function seemed to be the magic prescription for never ending story of success and rapid returns for enterprises.
Internet, for example is becoming one of the most popular medium in transmitting various data. Users can find any kind of information within a shorter time compared with conventional method that consumes more time.
The emergence of the Internet throughout the world has been contributing such a variety medium in doing business as well as people lifestyle. In fact, Internet is the essential prerequisite for the existence of E- commerce.
Electronic commerce or e-commerce has been defined as the ability to perform transactions involving the exchange of goods or services between two or more parties using electronic tools and technique. The explosion of E-commerce has created new phenomena in our lifestyle especially in shopping activities. Consumers can easily buy products or services like magazines and airlines tickets via Internet. Electronic commerce, like any other business, deals with the exchange of money for soft or hard goods and services.
Kalakota and Whintons in defined the term E-commerce from different perspectives. These perspectives are: This says that E-commerce is the application of technology towards the automation of business transactions and work flow.
E-commerce provides the capability of buying and selling products and information on the internet and other online services. The term commerce is treated as transaction between business partners. Therefore, the term e- commerce seems to fairly narrow to people. It is a broader definition of e-commerce. There is confusion among the consultants and the academicians over the use of this term. On the other hand, some argue that e-business encompasses the entire world of internal and external electronically based activities including e-commerce.
How will e-commerce change the global planning and purchasing of transport and logistics in the supply chain? Logistics has been described as the key enabler for e- business — but how can individual logistics and transport companies ensure that they benefit from, rather than perish in, the e-commerce revolution?
E-commerce is the new, profitable way to conduct business which goes beyond the simple movement of information and expands electronic transactions from point-of-sale requirements, determination and production scheduling, right through to invoicing, payment and receipt. The Internet is a worldwide collection of computer networks, co-operating with each other to exchange data using a common software standard.
Through telephone wires and satellite links, Internet users can share information in a variety of forms.
The size, scope and design of the Internet allows users to connect easily through ordinary personal computers and local phone numbers, exchange electronic mail E-mail with friends and colleagues with accounts on the Internet, post information for others to access, and update it frequently, access multimedia information that includes sound, photographic images and even video, and access diverse perspectives from around the world.
An additional attribute of the Internet is that it lacks a central authority—in other words, there is no "Internet, Inc. Beyond the various governing boards that work to establish policies and standards, few rules and answers to no single organization bind the Internet. Different people use different terminology such as 'electronic trading' 'electronic procurement' 'electronic purchasing' or 'electronic marketing'.
From the above definition, we can conclude that electronic commerce is often used in a much broader sense, to mean essentially the same as 'electronic business'. In other words e-commerce includes purchases of goods, services and other financial transactions in which the interactive process is mediated by information or digital technology at both locationally separate, ends of the interchange. Here 'transactions' include both specification of goods and service required and commitment to buy.
E-commerce transaction model can be in terms of business to business B2B , business to customer B2C or customer to customer C2C. The quality and quantity of information which a business delivers to customers or use this information to make decisions can determine just how competitive the business is.
A company already may be using a number of electronic based tools to help acquire and extend information and communication needs. These may include personal computers, word processors, courier, facsimile machines, telex services, cellular phones, pagers and more. Traditional telex and fax is quick but costly and communicating by telephone can become an endless game of tag.
Now a business can avoid these problems by using e-commerce which is fast, cost efficient, time saying and easy to use -i. Electronic business can result in better transactions, wide market coverage by offering the benefits of speed, convenience, being cost effective, timeliness, high profit margins, instant customer relations, no loss of customers, impact and control- all are a fraction of the past traditional business methods. A concern can do everything it can to run its business efficiently and profitably.
Application of electronic operations to commercial activities means better business solutions. It greatly facilitates a firm to make better decisions, sale forecasts, prices and other valuable information can be sent and received instantaneously. A business will always have the information it needs faster, easier and more completely in the new system of communication than ever before. This enables firms to have an edge over competitors by informing, following up and requesting information faster and easier to customers.
Another feature is that it helps to maintain greater control, at work, home or while traveling, communicate with any business partner or firm, anywhere instantly. Improve Responsiveness How does e-commerce help business? It helps by improving responsiveness to market conditions and customer preferences. Every business must know how important timing is to marketing and selling products.
Timing is important to cater to the demands of customers. If distributors, dealers and sales force do not get the right information at the right time, there will be a financial crisis as well as losing valuable customers. E-commerce network enables a company to implement marketing programmes with greater precision such as: Expedites and Streamlines Reporting It has been an experience in conventional commercial practices with factors like delays and ineffectiveness in reporting systems crippling effectiveness.
Responsive, timely information flows from sound management systems. Electronic commerce improves delivery and distribution both within and outside organizations.
The benefits are: Coordinates Sales Efforts Some marketing studies reveal that most sales people spend nearly 75 per cent of their time on the roads, relying heavily on telephone calls for contact with their head officers and customers. Telephone tag makes an endless frustrating game out of tracking down leads and following up to authenticate sales calls. Other benefits of electronic business are: Effectiveness and Efficiency Electronic commerce can increase the efficiency and effectiveness of public relation programmes, broadcast press releases, financial updates and other corporate communications.
Copy reviews and approvals are expedited by circulating instant messages to key internal and external contacts. Close Contact with Clients In any business where maintaining close contact with customers is a priority consideration, electronic business can increase responsiveness of the company' and ensure customer satisfaction.
Appointment confirmations, requests for information, follow-up reports and electronic data interchange can be effected with greater efficiency using instant messages. Planning and Execution of Meetings The mechanism of electronic operations in business facilitates planning and execution of meetings.
Executive management meetings, seminars, workshops, symposia and conventions take a great deal of time and effort to manage. Arrangements must be coordinated among a variety of diverse groups in different locations e.
Reports and surveys need to be distributed before and or after, the event. And there are always the headaches of late breaking events and last minute announcement.
In an electronic business environment, video-conferences, document conference, computer-based conference, which offer companies the flexibility of both electronic and paper distribution, can make these jobs easier and more effective. The marketplace is extended beyond traditional boundaries and is removed from a temporal and geographic location.
Customer convenience is enhanced, and shopping costs are reduced. Global Reach The technology reaches across national boundaries, around the earth. Commerce is enabled across cultural and national boundaries seamlessly and without modification. Universal Standards There is one set of technology standards, namely internet standards. There is one set of technical media standards across the globe.
Richness Video, audio, and text messages are possible. Video, audio, and text marketing messages are integrated into a single marketing message and consuming experience.
Interactivity The technology works through interaction with the users. Consumers are engaged in a dialog that dynamically adjusts the experience to the individual, and makes the consumer a co- participant in the process of delivering goods to the market. Information Density The technology reduces information costs and raises quality Information processing, storage, and communication costs drop dramatically, while currency, accuracy, and timeliness improve greatly.
Personalization of marketing messages and customization of products and services are based on individual characteristics. Increased competition at home and abroad means quality as well as profitability must be preserved by corporate houses. This pressure has led to a reappraisal of the accepted existing business practice in the search for greater efficiently.
Traditionally, the response in the face of competitive threat has been to reduce costs by rationalizing production, shedding labour and restructuring business, coupled with investments in. A reduction in acquisition times and costs, lower prices for goods and services, an expanded number and quality of suppliers, an increase in buyer productivity. Better management information and better inventory control is possible. A Reduction time to market is also achievable giving improved operating efficiencies and improved product quality at reduced cost.
The payment process can also be improved and finally and most importantly a greatly expanded customers base.