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E-Commerce 1. 2 E-commerce Describe E-CommerceDescribe E-Commerce Identify benefits and risks of E-CommerceIdentify benefits and risks of E-Commerce Describe.

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Presentation on theme: "E-Commerce 1. 2 E-commerce Describe E-CommerceDescribe E-Commerce Identify benefits and risks of E-CommerceIdentify benefits and risks of E-Commerce Describe."— Presentation transcript:

1 E-Commerce 1

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

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

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

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

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

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

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

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

10 10 The importance

11 11 E-Commerce Business Models B2C – Business-to-Consumer B2C – Business-to-Consumer B2B – Business-to-Business B2B – Business-to-Business C2C – Consumer-to-Consumer C2C – Consumer-to-Consumer B2G – Business-to-Government B2G – Business-to-Government

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

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

14 14 Order & Payment Processing E-Commerce Payment Models: E-Commerce Payment Models: CashCash CheckCheck CreditCredit Smart CardSmart Card MicropaymentsMicropayments

15 Credit Card Order Processing Flow

16 16 E-Commerce Storefront Solutions Instant Online Storefront Instant Online Storefront Yahoo!, Bigstep, Earthstores, FreeMerchantYahoo!, Bigstep, Earthstores, FreeMerchant Off-The-Shelf Shopping Cart Software Off-The-Shelf Shopping Cart Software Miva Merchant, MercantecMiva Merchant, Mercantec Custom Built Solution Custom Built Solution IBM's WebSphere Commerce Suite, Microsoft's Commerce ServerIBM's WebSphere Commerce Suite, Microsoft's Commerce Server Visual Studio.NET, Macromedia Dreamweaver MX, IBMs WebSphere Commerce StudioVisual Studio.NET, Macromedia Dreamweaver MX, IBMs WebSphere Commerce Studio Semi-Custom Built Solutions on a Budget Semi-Custom Built Solutions on a Budget E-Commerce add-ons for FrontPage and Dreamweaver E-Commerce add-ons for FrontPage and Dreamweaver Paypal order processing Paypal order processing Free shopping cart scripts Free shopping cart scripts

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

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

19 Hosting Solutions Mid-High Volume: Amazon Mid-High Volume: Amazon Other: Other: Servelink.com, CyberSharks.net, Hostek.com, LiquidWeb.com, Tikios.com(windows-based)Servelink.com, CyberSharks.net, Hostek.com, LiquidWeb.com, Tikios.com(windows-based) 19

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

21 21 Example e-Business Storefront model Storefront model Auction model Auction model Portal Model Portal Model Dynamic Pricing Models Dynamic Pricing Models B2B Exchanges B2B Exchanges B2B Service Providers B2B Service Providers e-Learning e-Learning

22 22 Storefront Model The storefront model combines transaction processing, security, online payment which allows merchants to sell their products to the customers on the Web. The storefront model combines transaction processing, security, online payment which allows merchants to sell their products to the customers on the Web. Many famous storefront model companies are Business-to-Consumer (B2C) companies. Many famous storefront model companies are Business-to-Consumer (B2C) companies. Sell tickets Sell tickets

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

24 24 Shopping Example Go shopping Shopping cart

25 Shopping Carts Templates for shopping carts in dreamweaver at ecommercetemplates.com (you host solution) Templates for shopping carts in dreamweaver at ecommercetemplates.com (you host solution) ecommercetemplates.com Many other providers (http://www.fortune3.com) Many other providers (http://www.fortune3.com) Managed Solutions Managed Solutions Make your own Make your own 25

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

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

28 Free Shopping Cart SW Do a search Do a search Check out Check out PHP: PHP: This does cart + product pagesThis does cart + product pages Install on a Web ServerInstall on a Web Server As part of install of SW must specify a MySQL database and give the admin name and a password to it.As part of install of SW must specify a MySQL database and give the admin name and a password to it. Finish install of OpenCart SW – will include creation the database tables to support OpenCartFinish install of OpenCart SW – will include creation the database tables to support OpenCart Using Interface of opencart: Setup categories of products, product info with images, etc.Using Interface of opencart: Setup categories of products, product info with images, etc. Java: Java: 28

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

30 30 Storefront Model Another model is online shopping mall which provides a wide selection of products and services. Another model is online shopping mall which provides a wide selection of products and services. Customers can purchase items from many stores in a single transaction. Customers can purchase items from many stores in a single transaction. Offer speed and add convenienceOffer speed and add convenience

31 31 Shopping Mall Example Different shops

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

33 33 Auction Model Example

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

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

36 36 Pricing model example

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

38 38 B2B Exchanges Define as buying, selling, partnering, bartering or trading conducted between two or more business (B2B). Define as buying, selling, partnering, bartering or trading conducted between two or more business (B2B). Allow Business to buy, sell, auction, barter and distribute products and services. Allow Business to buy, sell, auction, barter and distribute products and services. Examples: Examples: (Exchange employee)www.ework.com (Exchange employee)www.ework.com (Industry to Industry)www.itoi.com (Industry to Industry)www.itoi.com (Business to Business)www.biz2biz.com (Business to Business)www.biz2biz.com

39 39 B2B examples

40 40 B2B Service Providers B2B service providers make the B2B transactions easier. B2B service providers make the B2B transactions easier. These e-Businesses help other businesses improve their policies, procedures, services and general operations. These e-Businesses help other businesses improve their policies, procedures, services and general operations. Solutions include supply chain management, logistics, procurement. Solutions include supply chain management, logistics, procurement

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

42 42 Loan Online A growing segment of E-commerce. A growing segment of E-commerce. Loan online at a lower rate than other traditional channels. Loan online at a lower rate than other traditional channels. E-loan – E-loan – E-credit – E-credit – Clients – HP, Intel, other businessesClients – HP, Intel, other businesses Loan direct – Loan direct –

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

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

45 45 Recruitment / News

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

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

48 48 e-Learning e-Learning is growing rapidly as the number of Internet users increases. e-Learning is growing rapidly as the number of Internet users increases. Universities and other training companies offer HQ distance education over the Web. Universities and other training companies offer HQ distance education over the Web wwwtools.cityu.edu.hk wwwtools.cityu.edu.hk wwwtools.cityu.edu.hk E-books – E-books –

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

50 50 MasterCard & M-Commerce

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

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

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

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

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

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

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

58 58 Electronic Data Interchange (EDI) g/ g/ g/ g/

59 59 Get Paid How to you pay on the website? How to you pay on the website? Credit card transactionsCredit card transactions Cybercash: PayPal: Google CheckoutGoogle Checkout E-Wallets allows you to keep track your transactions, allows you to keep track your transactions, Digital Cash: store your money electricallyDigital Cash: store your money electrically More complex: B2B Transactions.More complex: B2B Transactions.

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

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

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

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

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

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

66 66 ASP Advantages

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

68 Portal Software

69 69 Choosing ASP Shared Server Shared Server with Application Isolation Systems Server Farm (Each company with its own server) Customer Cost LowLowHigh Initial Customer Investment LowLowHigh Maintainance cost LowModerateModerate Server Architecture Compl ex ModerateSimple Security Risk HighLowModerate

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

71 71 References


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