DU SOL B.Com 3rd Year E-Commerce Notes Chapter 3 Technology for Online Business
Write a short note on E-commerce as part of the Internet and IT Infrastructure.
Innovations in information and communications technologies have created a digital revolution that is changing the way the world works, learns, cornimdiicates and transacts business. This revolution is helping to foster economic growth and social development across the globe.
Businesses are using the tools of electronic commerce to increase productivity, access global markets, reduce the time required to develop new products and forge closer relationships with their customers. Some observers estimate that by 2003 global e-commerce could well exceed $1.8 trillion. The Internet and other technologies also are helping as tackle some of our toughest social challenges.
They are helping us educate our children, protect our health and make government more efficient, responsive, particularly and transparent. Ultimately, the Internet and other technologies are helping us to renew our most cherished values: raising standards of living, literacy and learning while widening the circle of democracy and empowering the individual. Unfortunately, not all countries or communities are participating fully in these dramatic developments.
We must work together to realize the potential of the Digital Revolution for all our citizens. Together, we have the chance to create “digital opportunities” worldwide: to improve access to information- and communications technology in underserved regions and communities; to bring 21st century learning to all comers of the world; to bring the latest medical insights to areas where there are barely enough doctors today to strengthen democracy and freedom, and to create networks that allow every business no matter how small to market and sell products directly to the entire world.
This vision is not necessarily self-fulfilling, however. Governments must adopt appropriate policies if they wish to foster the growth of the Internet. Perhaps the single most important contribution they can make is to establish conditions that unleash the dynamism, technology and capital of the private sector.
This means letting the private sector lead in the development of the Internet, avoiding unnecessary regulations, and adopting minimal government regulation only where necessary to protect the public interest. It means encouraging private investment, competition, open access, flexible regulatory frameworks and universal service.
General Business Terminology:
B2B Business to Business – marketing, advertising, communications, sales and other activities perpetrated between businesses.
B2C Business to Consumer – marketing, advertising, communications, sales and other activities inflicted by a business or consumers.
PC Political Correct — as in recommending a Windows NT server to management at a Fortune 500 company who’s CEO has just returned from an all expense paid trip to Microsoft’s Redmond campus or recommending a Linux server to management at a small ISP. The opinion or action that will upset “the powers that be” least.
PHB Pointly Haired Boss – the utterly clueless boss who presides
over Dilbert and his coworkers in the cartoon strip of that time. Any boss who’s only significant skill is in climbing the corporate management ladder. The PHB is too incompetent to realize he is incompetent – in short, the represents the nearly all mid and high level management in corporate America. Note that being too incompetent to realize one is incompetent is not limited to PHBs,.but can also be found in technical circles – or in any other field of endeavor.
Proprietary: Property of a particular company which has effective control. Said of software, protocols, hardware etc.,
Open: Said of “standards” that are published and available to everyone (sometimes for a fee). Ideally said of publicly controlled standard but much abused by marketing departments who refer to proprietary protocols as “open” if at least a small part of the specification is available to public view. The term “Open Systems” generally refers to Unix – and the communications protocols surrounding it.
POS: Point Of Sale – Refers to computer equipment and software specialized for retail point of sale particularly cash drawers, pole displays, receipt printers, bar – code scanners and software that supports them.
CRM: Customer Relationship Management – Major business buzzword for year 2000.
ERP : Enterprise Resource Planning – Major business buzzword of the 1990s, displaced by new buzzword CRM.
MRP: Material Requirement Planning – Major business buzzword of the 1980s, displaced by new buzzword ERP.
Middleware is the software that sits ‘in the middle’ between applications (e.g., a word processing program) working on different operating systems (Unix, Windows, z/OS, etc.). It is similar to the middle layer of a three-tier single system architecture, except it is stretched across multiple systems or applications. Examples include database systems, telecommunications software, transaction monitors and messaging-and- queueing software.
The distinction between operating system and middleware functionality is, to some extent, arbitrary. While core kernel functionality of course can only be provided by the operating system itself, some functionality previously provided by separately sold middleware is now integrated in operating systems. The typical example is the TCP/IP stack for telecommunications, nowadays included in virtually every operating system.
Middleware is computer software that connects software components or applications. The software consists of a set of enabling services that allow multiple processes running on one or more machines to interact across a network. This technology evolved to provide for interoperability in support of the move to client/server architecture. It is used most often to support complex, distributed applications. It includes web servers^ application servers, content management systems, and similar tools that support application development and delivery. Middleware is especially integral to modern information technology based on XML, SOAP, Web services, and service-oriented architecture.
The term middleware is sometimes considered a buzzword.
Middleware in Simulation Technology. In Simulation, “middleware” is a term generally used in the context of the High Level Architecture (simulation) (HLA) that applies to many distributed simulations. It is a layer of software that lies between the application code and the Run-Time Infrastructure (simulation) (RTI), hence ‘middle’ in its title. Middleware generally consists of a library of functions, and enables a number of applications (simulations, or Federates in HLA terminology) to page these functions from the common library rather than re-create them for each application.
Write a note on Text and Integrating E-business Applications.
A document management system (DMS) is a computer system (or set of computer programs) used to track and store electronic documents ant}/ or images of paper documents. The term has some overlap with the concepts of Content Management Systems and is often viewed as a component of Enterprise Content Management Systems and related to Digital Asset Management, Document imaging, Workflow systems and Records Management systems.
Overview: Most methods for managing documents address the following areas—
Location: Where will documents be stored? Where will people need to go to access documents? Physical journeys to filing cabinets and file rooms are analogous to the onscreen navigation required to use a document management system.
Filing: How will documents be filed? What methods will be used to organize or index the documents to assist in later retrieval? Document management systems will typically use a database to store filing information.
Retrieval: How will documents be found? Typically, retrieval encompasses both browsing through documents and searching for specific information.
Security: How will documents be kept secure? How will unauthorized personnel be prevented from reading, modifying or destroying documents?
Disaster Recovery. How can documents be recovered in case of destruction from fires, floods or natural disasters?
Retention. How long should documents be retained? This is an organizational policy and practice that defines what information, or documents, are to be retained; for what length of time; and what point in time the information must be removed or deleted. Retention rules are usually based on organizational practice of Records Management
Archiving. How can documents be preserved for future readability? Archiving is the removal from the active repository of documents and related metadata that have, by organizational definition, reached the end of their active lifespan-, and are required to be stored, or archived, in a separate area. Usually archiving entails movement of documents, whether paper or electronic to a separate storage facility, be ;t an archival warehouse, or a nearline or offline storage device.
Distribution. How can documents be available to the people that need them?
Workflow. If documents need to pass from one person to another, what are the rules for how their work should flow?
Creation. How are documents created? This question becomes important when multiple-people need to collaborate, and the logistics of version control and authoring arise.
Authentication/Approval. How do we provide needed requirements for legal submission to government and private industry that the documents are original and meet their standards for authentication?
History. Document management should be divided into two streams, based on the material being managed. Beginning in the 1980s, a number of vendors began developing systems to manage paper-based documents. These systems managed paper documents, which included not only printed and published documents, but also photos, prints, etc.
Later, a second system was developed, to manage electronic documents, i. e., all those documents, or files, created on computers, and often stored on local user file systems. The earliest electronic document management (EDM) systems were either developed to manage proprietary file types, or a limited number of file formats. Many of these systems were later referred to as document imaging systems, because the main capabilities were capture, storage, indexing and retrieval of image file formats. These systems enabled an organization to capture faxes and forms, save copies of the documents as images, and store the image files in the repository for security and quick retrieval (retrieval was possible because the system handled the extraction of the text from the document as it who captured, and the text indexer provided text retrieval capabilities.
EDM systems evolved to where the system was able to manage any type of file format that could be stored on the network. The applications grew to encompass electronic documents, collaboration tools, security, and auditing capabilities
Document Management And Communication :
Electronic document management is in particular worked out by Carzaniga and Wolf (2001) in their paper “Content-based networking: a new communication infrastructure’’. The authors introduce content-based networking as a communication infrastructure where information is driven by the content throughout the network. The users express their interests, and the senders simply input the message into the network. From that point the network delivers all the information to the right people.
Sprague (1995) delivers a more elaborate work in which he introduces document management through using IT. He calls it electronic document management: EDM. He defines managing of documents as the “creation, storage, organization, transmission, retrieval, manipulation, update, and eventual disposition of documents to fulfill an organizational purpose”, and he further states that EDM improves communication among people and groups of people.
There are several other examples from the literature for the link between EDM and communication. Hansen and Haas (2001) elaborate on the role of the suppliers and users of information in electronic documents. Another research with a very clear link between EDMS and communication is that of Thorpe and Mead (2000). They showed that an EDM system changes the communication patterns. Of the three case projects they researched, EDM acquired a central role in two of them, (the third project was abandoned after three months).
A research of Howard and Pettersen (2001) about the way of communicating in a construction project had as result that EDM (Howard and Pettersen call it project web) was number three communication tool just after telephone and a meeting, leaving e-mail, paper-post and fax behind. Rene Brohm (2005) introduced in his dissertation the theater model. The theater model illustrates methaphorically how document management systems correspond with a stage in a theater. His argumentation is that the interaction in a play on the stage is similar with the functioning of a document system.
If all the data and information would be put in a central database/intranet, which can be used by everyone in the organization, there would be a clear link between IT and dissemination of information according to Marin & Poulter (2004). They argue that because of the easy access to the information, it would flow through the organization. The authors confirm this in their paper (2004) by stating that distribution of intelligence can be aided by technology.
There are different ways of improving this communication tool. Hansen and Haas (2001) see the electronic document management as a market, with competition. According to them suppliers should have a strategy about how to share information and how to persuade their clients (employees) to use the system?
One way to do this is introduced by Yan & Garcia-Molina (1999 pp.2) who use EDM to: “make long term profile consisting of a number of standing queries to represent his information needs”. Through this they state that dissemination of information is improved. Users receive information in their field of interest because of a profile that was submitted. Therefore search costs and search time for employees are decreased.
Components: Document management systems commonly provide storage, versioning, metadata, security, as well as indexing and retrieval capabilities. Here is a description of these components:
Metadata: Metadata is typically stored for each document. Metadata may. for example, include the date the document was stored and the identity of the user storing it. The DMS may also extract metadata from the document automatically or prompt the user.to add metadata. Some systems also use optical character recognition on scanned images, or perform text extraction on electronic documents. The resulting extracted text can be used to assist users in locating documents by identifying probable keywords or providing for full text search capability, or can be used on its own. Extracted text can also be stored as a component of metadata, stored with the image, or separately as a source for searching document collections.
Integration: Many document management systems attempt to integrate document management directly into other applications, so that users may retrieve existing documents directly from the document management system repository, make changes, and save the changed document back to the repository as a new version, all without leaving the application. Such integration is commonly available for office suites and e-mail or collaboration/groupware software. Integration often uses open standards such as ODMA, LDAP, WebDAV and SOAP to allow integration with other software and compliance with internal controls, 
Capture Images of paper documents using scanners or multifunction printers. Optical Character Recognition (OCR) software is often used, whether integrated into the hardware or as stand-alone software, in order to convert digital images into machine readable text.
Indexing: Track electronic documents. Indexing may be as simple as keeping track of unique document identifiers; but often it takes a more complex form, providing classification through the documents’ metadata or even through word indexes extracted from the documents’ contents. Indexing exists mainly to support retrieval. One area of critical importance for rapid retrieval is the creation of an index topology.
Storage: Store electronic documents. Storage of the documents often includes management of those same documents; where they are stored, for how long, migration of the documents from one storage media to another (Hierarchical storage management) and eventual document destruction.
Retrieval: Retrieve the electronic documents from the storage. Although the notion of retrieving a particular document is simple, retrieval in the electronic context can be quite complex and powerful. Simple retrieval of individual documents can be supported by allowing the user to specify the unique document identifier, and having the system use the basic index (or a non-indexed query on its data store) to retrieve the document. More flexible retrieval allows the user to specify partial search terms involving the document identifier and/or parts of the expected metadata. This would typically return a list of documents which match the user’s search terms. Some systems provide the capability to specify a Boolean expression containing multiple keywords or example phrases expected to exist within the documents’ contents. The retrieval for this kind of query may be supported by previously-built indexes, or may perform more time-consuming searches through the documents’ contents to return a list of the potentially relevant documents. See also Document retrieval.
Distribution Security: Document security is vital in many document management applications. Compliance requirements for certain documents can be quite complex depending on the type of documents. For instance the Health Insurance Portability and Accountability Act (HIPAA) requirements dictate that medical documents have certain security requirements. Some document management systems have a rights management module that allows an administrator to give access to documents based on type to only certain people or groups of people.
Workflow: Workflow is a complex problem and some document management systems have a built in workflow module. There are different types of workflow. Usage depends on the environment the EDMS is applied to. Manual workflow requires a user to view the document and decide who to send it to. Rules-based workflow allows an administrator to create a rule that dictates the flow of the document through an organization: for instance, an invoice passes through an approval process and then is routed to the accounts payable department. Dynamic rules allow for branches to be created in a workflow process. A simple example would be to enter an invoice amount and if the amount is lower than a certain set amount, it follows different routes through the organization.
Collaboration: Collaboration should be inherent in a EDMS. Documents should be capable of being retrieved by an authorized user and worked on.
Access should be blocked to other users while work is being performed on the document.
Versioning: Versioning is a process by which documents are checked in or out of the document management system, allowing users to retrieve previous versions and to continue work from a selected point. Versioning is useful for documents that change over time and require updating, but it may be necessary to go back to a previous copy.
Describe the various E-business Applications.
1. Business to Business Applications : Automated Ecommerce Transactions. It is a term also used in electronic commerce and to describe automated processes between trading partners.
The volume of B2B transactions is much higher than the volume of B2C transactions. One reason for this is that businesses have adopted electronic commerce technologies in greater numbers than have consumers. Also, in a typical supply chain there wili be many B2B transactions but only one B2C transaction, as the completed product is retailed to the end customer.
An example of a B2B transaction is a chicken feed company selling its product to a chicken farm, which is another company. An example of a B2C transaction is a grocery store selling grain-fed chickens to a consumer. B2B can also describe marketing activities between businesses, not just the final transactions that result from marketing, though the term can be used to identify sales transactions between businesses (also referred to as “institutional sales”). For example, a company selling photocopiers would more likely be a B2B sales organization than a B2C sales organization.
“Business-to-business” can also refer to all transactions made in an industry value chain before the finished product is sold to the end consumer.
What is B2B Marketing Communications? : B2B marketing communications is how businesses promote their products and services to other businesses using tactics other than direct sales. The purpose of B2B marketing communications is to support the marketer’s sales effort and improve company profitability. B2B marketing is generally considered to be more complex than B2C marketing, as there is often more than one decision-maker involved in a B2B sale on the buyer’s side.
B2B marketing communications tactics generally include advertising, public relations, direct mail, trade show support, sales collateral, branding, and interactive services such as website design and search engine optimization.
The Business Marketing Association is the trade organization that serves B2B marketing professionals. It was founded in 1922 and offers certification programs, research services, conferences, industry awards and training programs.
B2B Marketing Methodologies Positioning Statement : An important first step in business to business marketing is the development of your positioning statement. This is a statement of what you do and how you do it differently and better than your competitors.
Developing your messages: The next step is to develop your messages. There is usually a primary message that conveys more strongly to your customers what you do and the benefit it offers to them, supported by a number of secondary messages, each of which may have a number of supporting arguments, facts and figures.
Building a campaign plan: Whatever form your B2B marketing campaign will take, build a comprehensive plan up front to target resources where you believe they will deliver the best return on investment, and make sure you have all the infrastructure in place to support each stage of the marketing process – and that doesn’t just include developing the lead – make sure the entire organization is geared up to handle the inquiries appropriately.
Briefing an agency: A standard briefing document is usually a good idea for briefing an agency. As well as focusing the agency on what’s important to you and your campaign, it serves as a checklist of all the important things to consider as part of your brief. Typical elements to an agency brief are: Your objectives, target market, target audience, product, campaign description, your product positioning, graphical considerations, corporate guidelines, and any other supporting material and distribution.
Measuring results: The real value in results measurement is in tying the marketing campaign back to business results. After all, you’re not in the business of developing marketing campaigns for marketing sake. So always put metrics in place to measure your campaigns, and if at all possible, measure your impact upon your desired objectives, be it Cost Per Acquisition, Cost per Lead or tangible changes in customer perception.
B2B standards: UN/EDIFACT is one of the most well-known and established B2B standards. ANSI ASC XI2 is a popular standard in North America. RosettaNet is an XML-based, emerging B2B standard in the high tech industry. An approach like UN/CEFACT’s Modeling Methodology (UMM) might be used to capture the collaborative space of B2B business processes.
E-Marketplaces: “E-” or “electronic” marketplaces in a business-to- business context are primarily large online platforms (B2B portals) or websites that facilitate interaction and/or transactions between buyers and suppliers at organizational or institutional rather than individual levels. Since the builders of such marketplaces primarily aim at facilitating buyer-seller interaction (in most cases without being a buyer or seller themselves), these are also referred to as “third-party” B2B marketplaces. These marketplaces can do one or more of the following—
- Flelp buyers find new suppliers and vice versa;
- Help reduce the time and cost of interaction for B2B transactions;
- Help increase trade between distant geographies;
- Help manage payments and track orders for B2B transactions.
Vertical e-Marketplace: A vertical e-marketplace spans up and down every segment of one specific industry. Each level of the industry has access to every other level, which greatly increases collaboration. Buyers and sellers in the industry are connected to increase operating efficiency and decrease supply chain costs, inventories and cycle times. This is possible because buying/ selling items in a single industry standardizes needs, thereby reducing the need for outsourcing many products.
Horizontal e-Marketplace: A horizontal e-marketplace connects buyers and sellers across many industries. The most common type of materials traded horizontally are MRO (maintenance, repair and operations) materials. Mainly business and consumer articles, these items are in demand because they are crucial to the daily running of a business, regardless of industry and level within that industry. Many corporations have MRO materials bought directly on-line by the maintenance team in order to relieve the purchasing department.
No-frills e-Marketplace: Developed in response to customers wanting to purchase products without service (or with very limited service), the no¬frills e-marketplace parallels the B2C offering of no-frills budget airlines. The subject of several Harvard and IMD articles/case-studies, no-frills B2B e-marketplaces enable the effective de-bundling of service from product via clear “business rules.” This provides the basis of differentiation from conventional B2B sales/purchasing channels.
Etymology: The term “business-to-business” was originally coined to describe the electronic communication relations between businesses or enterprises in order to distinguish it from the communications between businesses and consumers (B2C). It eventally came to be used in marketing as well, initally describing only industrial or capital goods marketing. However, today it is widely used to describe all products and services used by enterprises.
2. Business to Consumer: Business-to-consumer (B2C, sometimes also called Business-to-Customer) describes activities of E-businesses serving end consumers with products and/or services. It is often associated with electronic commerce but also encompasses financial institutions and other types of businesses. B2C relationships are often established and cultivated through some form of Internet marketing.
Classifications Of B2C E-Commerce :
Online intermediaries. Online intermediaries are companies that facilitate transactions between buyers and sellers and receive a percentage of the transaction’s value. These firms make up the largest group of B2C companies today. There are two types of online intermediaries: brokers and infomediaries.
An infomediaiy is a Web site that provides specialized information on behalf of producers of goods and services and their potential customers.
Advertising-based models: In an advertising-based system, businesses’ websites have an inventory, which they sell to interested parties. There are two guiding philosophies for this practice: high-traffic or niche. Advertisers take a high-traffic approach when attempting to reach a larger audience. These advertisers are willing to pay a premium for a site that can deliver high numbers, for example advertisements on Yahoo! or AOL. When advertisers are trying to reach a smaller group of buyers, they take a niche approach. These buyers are well-defined, clearly identified, and desirable. The niche approach focuses on quality, not quantity. For example, an advertisement on WSJ.com would chiefly be viewed by business people and executives.
Community-based models. In a community-based system, companies allow users worldwide access to interact with each other on the basis of similar areas of interest. These firms make money by accumulating loyal users and targeting them with advertising.
Example: Yahoo! Groups
Fee-based models: In a fee-based system, a firm charges a subscription fee to view its content. There are varying degrees of content restriction and subscription types ranging from flat-fees to pay-as-you-go.
Advantages of B2C e-commerce. B2C e-commerce has the following advantages –
Shopping can be faster and more convenient.
- Offerings and prices can change instantaneously.
- Call centers can be integrated with the website.
- Broadband telecommunications wi 11 enhance the buying experience.
Challenges Faced By B2C E-Commerce :
The two main challenges faced by B2C e-commerce are building traffic and sustaining customer loyalty. Due to the winner-take-all nature of the B2C structure, many smaller firms find it difficult to enter a market and remain competitive. In addition, online shoppers are very price-sensitive and are easily lured away, so acquiring and keeping new customers is difficult. A study of top B2C companies by McKinsey found that—
- Top performers had over three times as many unique visitors per month than the median. In addition, the top performer had 2,500 times more visitors than the worst performer.
- Top performers had an 18% conversion rate of new visitors, twice that of the median.
- Top performers had a revenue per transaction of 2.5 times the median.
- Top performers had an average gross margin three times the median.
- There was no significant difference in the number of transactions per customer and the visitor acquisition cost.
Essentially, these masters of B2C e-commerce (Amazon, etc.) remain at the top because of effective communication and value to the customer.
3. Business to Employee: Business-to-employee (B2E) electronic commerce uses an intrabusiness network which allows companies to provide products and/or services to their employees. Typically, companies use B2E networks to automate employee-related corporate processes,
Examples of B2E applications include –
- Online insurance policy management
- Corporate announcement dissemination
- Online supply requests
- Special employee offers
- Employee benefits reporting
- 401 (k) Management
4. Business-to-government. E-commerce (B2G) networks allow businesses to bid on government RFPs in a reverse auction fashion. Public sector organizations (PSO’s) post tenders in the form of RFP’s, RFI’s, RFQ’s etc. and suppliers respond to them.
There are two companies in Canada that offer B2G e-commerce.
5. Government-to-Business. G2B is the online non-commercial interaction between local and central government and the commercial business sector, rather than private individuals G2C. For example http://www.dti.gov.uk is a Government web site where businesses can get information and advice on e-business ‘best practice’.
6. Government-to-Government. G2G is the online non-commercial interaction between Government organisations, departments, and authorities and other Government organisations, departments, and authorities. It’s use is common in the UK, along with G2C, the online non-commercial interaction of local and central Government and private individuals, and G2B the online non-commercial interaction of local and central Government and the commercial business sector.
G2G systems generally come in one of two types –
Internal facing – joining up a single Governments departments, agencies, organisations and authorities – examples include the integration aspect of the Government Gateway, and the UK NHS Connecting for Health Data SPINE.
External facing – joining up multiple Governments IS systems – an example would include the integration aspect of the Schengen Information System (SIS), developed to meet the requirements ofthe Schengen Agreement.
7. Government-to-Citizen : G2C is the online non-commercial interaction between local and central Government and private individuals, rather than the commercial business sector G2B. For example Government sectors become visibly open to the public domain via a Web Portal. Thus making public services and information accessible to all. One such web portal is Government Gateway.
8. Consumer-to-consumer: C2C electronic commerce involves the electronically-facilitated transactions between consumers through some third party. A common example is the online auction, in which a consumer posts an item for sale and other consumers bid to purchase it; the third party generally charges a flat fee or commission. The sites are only intermediaries, just there to match consumers. They do not have to check quality of the products being offered.