SICS 3653: E-COMMERCE SICS 3653: E-COMMERCE AND E-BUSINESS AND E-BUSINESS Ebenezer Nortey Yebuah Ebenezer Nortey Yebuah (ETONY) (ETONY) outline outline  Introduction to E-Commerce Introduction to E-Commerce • Definition of E-Commerce and E-business Definition of E-Commerce and E-business • Major types of E-Commerce (briefly) Major types of E-Commerce (briefly) • History of E-Commerce History of E-Commerce • Benefits of E-Commerce to Benefits of E-Commerce to  Organizations Organizations  Consumers Consumers  society society • Limitations of E-Commerce Limitations of E-Commerce  The digital economy The digital economy • The new Business environment The new Business environment • Business pressures Business pressures • Organizational responses Organizational responses  E-Marketing E-Marketing • E-marketing issues E-marketing issues • Economics of E-marketing Economics of E-marketing • Effects of marketing on organizations Effects of marketing on organizations  E-Commerce technology/infrastructure E-Commerce technology/infrastructure  Communications network Communications network  Security and legal issues Security and legal issues • Need for E-Commerce security Need for E-Commerce security • Basic security issues Basic security issues • Types and treats and attacks Types and treats and attacks • Security risk management Security risk management • Securing E-Commerce communication Securing E-Commerce communication  Business models for E-Commerce Business models for E-Commerce  Implementation of E-business systems Implementation of E-business systems Definition of E-Commerce and Definition of E-Commerce and business business  E-Commerce E-Commerce : the process of buying, selling, or exchanging products, : the process of buying, selling, or exchanging products, services, and information through computer networks. services, and information through computer networks. • Communication Communication : the delivery of goods, services, information, or payment : the delivery of goods, services, information, or payment electronically electronically • Commercia Commercia l: the ability to buy and sell products, services, and information l: the ability to buy and sell products, services, and information electronically electronically • Business process Business process : completing business process electronically i.e. replacing : completing business process electronically i.e. replacing physical process with information physical process with information • Services Services : tool for improving the quality of customer services, and increasing : tool for improving the quality of customer services, and increasing the speed of service delivery whiles cutting cost the speed of service delivery whiles cutting cost • learning learning : enables online training and educations : enables online training and educations • Collaborative Collaborative : supports inter and intraorganizational collaboration : supports inter and intraorganizational collaboration • Community Community : provides a meeting place for members to learn and collaborate. : provides a meeting place for members to learn and collaborate. Definition of E-Commerce and Definition of E-Commerce and business business  Commerce Commerce : transactions between : transactions between business partners. (electronically=e- business partners. (electronically=e- commerce) commerce)  E-business E-business : the buying and selling : the buying and selling of goods and services and also of goods and services and also serving customers, collaboration with serving customers, collaboration with business partners, and conducting business partners, and conducting electronic transactions with an electronic transactions with an organization. organization. Definition of E-Commerce and Definition of E-Commerce and business business  Various forms of E-Commerce based on the level Various forms of E-Commerce based on the level of digitalization, of digitalization,  Of the products/services Of the products/services  The process The process  The delivery agent The delivery agent  Brick and mortar organization Brick and mortar organization : : zero digitalization i.e. zero digitalization i.e. pure physical organization. pure physical organization. • Conduct all their business activities on physically Conduct all their business activities on physically  Virtual organizations Virtual organizations : : digitalization of 1 i.e. (pure play) digitalization of 1 i.e. (pure play) • Does all business tractions inline. Does all business tractions inline.  Click and mortar Click and mortar : : partial digitalization i.e. click and mortar partial digitalization i.e. click and mortar • Has an online presence, but does basic business processes physically Has an online presence, but does basic business processes physically Types of E-Commerce Types of E-Commerce  The nature or transaction or interaction is mostly used to class The nature or transaction or interaction is mostly used to class the E-Commerce the E-Commerce • Business-to-business B2B Business-to-business B2B : transactions between business partners : transactions between business partners • Business-to-consumer C2C Business-to-consumer C2C : transactions between business : transactions between business organizations and individual shoppers organizations and individual shoppers • Consumer-to-business C2B Consumer-to-business C2B : transaction in which individuals sell : transaction in which individuals sell products and services to business products and services to business • Consumer-to-consumer C2C Consumer-to-consumer C2C : transactions between individual : transactions between individual consumers consumers  Interdisciplinary nature of E-Commerce: computer science, Interdisciplinary nature of E-Commerce: computer science, marketing, consumer behavior, finance, economics, management marketing, consumer behavior, finance, economics, management information systems, accounting, management, business, law, information systems, accounting, management, business, law, robotics, public administration and engineering. robotics, public administration and engineering. History History  Electronic funds transfer Electronic funds transfer (early 1970s) (early 1970s) “ “ It use was mostly limited to large organizations, financial It use was mostly limited to large organizations, financial institutions, and a few hardcore business” institutions, and a few hardcore business”  Electronic Data Interchange Electronic Data Interchange , , “ “ use to transfer routine documents, which expanded electronic use to transfer routine documents, which expanded electronic transfers from financial institutions to manufacturers, retailers, transfers from financial institutions to manufacturers, retailers, services industries etc” services industries etc”  Internet and the world wide web Internet and the world wide web : the : the commercialization of the internet, saw the coining of the commercialization of the internet, saw the coining of the term E-COMMERCE. term E-COMMERCE. E-Commerce applications quickly multiplied due to the rapid E-Commerce applications quickly multiplied due to the rapid development of new networks, protocols, and EC software, due to development of new networks, protocols, and EC software, due to increase in competition and other business pressures increase in competition and other business pressures  There has been many innovative applications, ranging from There has been many innovative applications, ranging from online direct sales to E-learning. online direct sales to E-learning. Benefits of E-Commerce Benefits of E-Commerce  The E-Commerce revolution is as profound as the The E-Commerce revolution is as profound as the change that accompanied the industrial revolution change that accompanied the industrial revolution (Clinton and Gore 1997) (Clinton and Gore 1997)  E-Commerce enormous potential benefits to E-Commerce enormous potential benefits to organizations, individuals and society, considering organizations, individuals and society, considering • The global nature of the technology The global nature of the technology • The opportunity to reach millions of people The opportunity to reach millions of people • Its interactive nature Its interactive nature • The variety of possibilities for its use The variety of possibilities for its use • The resourcefulness and rapid growth of its supporting The resourcefulness and rapid growth of its supporting infrastructure (especially the web) infrastructure (especially the web) Benefits of E-Commerce Benefits of E-Commerce  Organizational benefits Organizational benefits • Global reach Global reach : can easily and quickly locate the best suppliers, more customers : can easily and quickly locate the best suppliers, more customers and more suitable business partners. i.e. buy cheaper and sell more. and more suitable business partners. i.e. buy cheaper and sell more. • Cost reduction Cost reduction : EC decreases the cost of creating, processing, distribution, : EC decreases the cost of creating, processing, distribution, storing and retrieving paper-based information. storing and retrieving paper-based information. • Supply chain improvement Supply chain improvement : supply chain inefficiencies can be minimized e.g : supply chain inefficiencies can be minimized e.g Inventory and deliver delays Inventory and deliver delays • Extended hours:24/7/365 Extended hours:24/7/365 • Customization Customization : pull-type production (build-to-order) : pull-type production (build-to-order) • New business models New business models : tendering (reverse auction), name-your-own-price : tendering (reverse auction), name-your-own-price model, affiliate marketing, viral marketing etc. model, affiliate marketing, viral marketing etc. • Vendors’ specialization Vendors’ specialization : EC enables high degree of specialization : EC enables high degree of specialization • Lower communication cost: Lower communication cost: EC lowers telecommunications cost. EC lowers telecommunications cost. • Efficient procurement Efficient procurement : EC can reduce administrative cost, purchasing prices, and : EC can reduce administrative cost, purchasing prices, and reducing cycle time. reducing cycle time. • Improved customer relations Improved customer relations : EC enable close customer relations : EC enable close customer relations • Up-to-date company material Up-to-date company material : EC enables company information to be updated : EC enables company information to be updated by the minute by the minute • No city business permits and fees No city business permits and fees • etc etc Benefits of E-Commerce Benefits of E-Commerce  Consumer benefits Consumer benefits • ubiquity ubiquity : EC allows shopping 24/7/365 from almost any : EC allows shopping 24/7/365 from almost any location. location. • More products and services More products and services : EC gives more choices. : EC gives more choices. • Cheaper products and services Cheaper products and services : EC providers price variety : EC providers price variety for goods and services for goods and services • Instant delivery Instant delivery : e.g. digitized product : e.g. digitized product • Information availability: Information availability: relevant and detailed information relevant and detailed information in seconds in seconds • Participate in auctions: Participate in auctions: virtual auctions virtual auctions • Electronic communities Electronic communities : consumers can interact with other : consumers can interact with other consumers consumers • Get it you way Get it you way : customization and personalization of : customization and personalization of products and services products and services • No sales tax No sales tax : most online sales are tax free : most online sales are tax free [...]... and firms conducting financial transaction digitally through digital currencies or financial tokens that are carried via network computers and mobile devices • Microprocessors and networking capabilities embedded in physical goods such as home appliances and automobiles Digital Economy  Digital economy: the convergence of computing and communications technology on the internet and other networks and. .. universally accepted standards for quality, security, and reliability • Telecommunication bandwidth is insufficient (mostly for m-commerce) • Software development tools are still evolving • Difficulties in integrating the internet and EC software applications and databases • Special web servers are needed in addition to the network servers (added cost) • Internet accessibility is still expensive and/ or inconvenient... digital technologies, including digital communications networks, computers, software, and other related information technologies  Digital networking and communications infrastructures provides the global platform over which people and other organizations interact, communicate,, collaborate and search for information  Choi and whinston says this platform is characterized by • A vast array of digital products:...Benefits of E-Commerce  Societal benefits • Telecommuting: more people work and shop at home • Higher standard of living: competitive prices allow lower income earners to shop more • Hope for the poor: great opportunity for the poor to sell, buy and learn new skills • Availability of public services: health care, education, and distribution of government social services... resulting flow of information and technology that is stimulating e-commerce and vast organizational changes  This convergence is enabling all types of information (data, audio, video, etc) to be stored, processed, and transmitted over networks to many destinations worldwide  The digital economy is creating a digital revolution, evidence by unprecedented economy performance and the longest period of uninterrupted... Small fixed cost Cost=value Electronic marketplaces  Electronic marketplace: a space in which sellers and buyers exchange goods and services for money (or for other goods and services) electronically  Functions of markets: • matching buyers and sellers • Facilitating exchanges of goods/services and payments associated with market transactions • Provide institutional infrastructure Electronic marketplaces... E.g order aggregation and fulfillment, inventory management, purchasing from suppliers, payment processing, packaging and delivery  Intermediaries: create and manage online markets Match buyers and sellers, provide some infrastructure services to and help buyers/sellers to institute and complete transaction (mostly operate as computerized systems)  Other business partners: includes business collaboration... goods to auction sites • Pay of rents or auction sites, advertisement and payment of auctioneers and employees add to cost E-Auctions  Electronic auctions (e-auctions): auctions conducted online • Dynamic pricing: change in price due to demand and supply relationships at any given time   Dynamic pricing has several forms (bargaining and negotiations) There are 4 major forms of dynamic pricing depending... expansion in certain parts of the world  Web-based E-Commerce systems are accelerating the digital revolution by providing competitive advantage to organizations The new business environment  Highly competitive (due to economic, societal, legal and technological factors)  Quick and sometimes unpredictable change  The need for more production, faster and with fewer resources The new business environment... of large-scale B2C requires special automated warehouses Limitations  Non-technological • Security and privacy concerns deter some customer from buying • Lack of trust in EC and in unknown sellers hinder buying • Many legal and public policy issues, including taxations, remain unresolved • National and international government regulations sometimes get in the way • Difficulty in measuring some benefits . E-Commerce Introduction to E-Commerce • Definition of E-Commerce and E-business Definition of E-Commerce and E-business • Major types of E-Commerce (briefly) Major types of E-Commerce (briefly) • History of E-Commerce History. (electronically=e- commerce) commerce)  E-business E-business : the buying and selling : the buying and selling of goods and services and also of goods and services and also serving customers, collaboration. SICS 3653: E-COMMERCE SICS 3653: E-COMMERCE AND E-BUSINESS AND E-BUSINESS Ebenezer Nortey Yebuah Ebenezer Nortey Yebuah (ETONY) (ETONY) outline outline  Introduction to E-Commerce Introduction