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Using Information Technology in E-commerce By, Ikhlaq Ikhlaq.

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1 Using Information Technology in E-commerce By, Ikhlaq Ikhlaq

2 Chapter Preview In this chapter, we will study: In this chapter, we will study: Importance and advantages of e-commerce. Importance and advantages of e-commerce. Understand integration of e-commerce in everyday businesses. Understand integration of e-commerce in everyday businesses. Forms and uses of business-to-consumer electronic commerce Forms and uses of business-to-consumer electronic commerce Technical and non-technical requirements needed to make EC work Technical and non-technical requirements needed to make EC work

3 History of e-commrce History History Began in the early 1970s (long before the Internet was open to commercial use) Began in the early 1970s (long before the Internet was open to commercial use) Limited to large businesses initially Limited to large businesses initially Electronic Fund Transfer (EFT) and Electronic Data Interchange (EDI) Electronic Fund Transfer (EFT) and Electronic Data Interchange (EDI) Scope Today Includes Scope Today Includes advertising advertising home banking home banking shopping in electronic stores and malls shopping in electronic stores and malls buying stocks buying stocks finding a job finding a job collaborating electronically with business partners around the globe collaborating electronically with business partners around the globe providing customer service providing customer service Virtual malls. Virtual malls.

4 Frame work of e-commerce

5 E-Commerce / E-Business Electronic Commerce: Buying and selling of products, services and information via computer networks, primarily the Internet Electronic Commerce: Buying and selling of products, services and information via computer networks, primarily the Internet Some people view this term of commerce as describing transactions conducted between business partners. Some people view this term of commerce as describing transactions conducted between business partners. Electronic Business: A broader definition that includes Electronic Business: A broader definition that includes buying and selling, plus buying and selling, plus servicing customers servicing customers collaborating with business partners collaborating with business partners conducting electronic transactions within an organization conducting electronic transactions within an organization

6 Types of E-Commerce Business-to-business EC (B2B) Business-to-business EC (B2B) In which two or more businesses make transactions or collaborate electronically In which two or more businesses make transactions or collaborate electronically Collaborative commerce (c-commerce) Collaborative commerce (c-commerce) In which business partners collaborate and this collaboration frequently occurs between and among the business partners along the supply chain. In which business partners collaborate and this collaboration frequently occurs between and among the business partners along the supply chain. Business-to-consumer EC (B2C) Business-to-consumer EC (B2C) In this case the sellers are organized, the buyers are individual. In this case the sellers are organized, the buyers are individual.

7 Cont….. Consumer-to-businesses (C2B) Consumer-to-businesses (C2B) In which the consumers make known a particular need for a product or service and organizations compete to provide the product or service to consumers. In which the consumers make known a particular need for a product or service and organizations compete to provide the product or service to consumers. For example priceline.com, where the customer name the price and suppliers try to fulfill it For example priceline.com, where the customer name the price and suppliers try to fulfill it Consumer-to-consumer (C2C) Consumer-to-consumer (C2C) In which an individual sells the products (services) to other individuals In which an individual sells the products (services) to other individuals Intrabusiness (intraorganizational) commerce Intrabusiness (intraorganizational) commerce In which an organization uses EC internally to improve its operations. An example known as business to employee EC In which an organization uses EC internally to improve its operations. An example known as business to employee EC

8 Cont…. Government-to-citizens (G2C) and others Government-to-citizens (G2C) and others In this case the govt. provides services to its citizens via EC technologies. In this case the govt. provides services to its citizens via EC technologies. Govt. can do business with other governments as well as with business Govt. can do business with other governments as well as with business Mobile commerce (m-commerce) Mobile commerce (m-commerce) When e-commerce is done in a wireless environment, such as using cell phones to access the internet, we call it m-commerce When e-commerce is done in a wireless environment, such as using cell phones to access the internet, we call it m-commerce

9 B2B Business-to-business targets sales and services primarily to other businesses. B2C Business-to-consumer targets sales and services primarily to consumers. B2E Business-to-employee provides services other companies can use to interface with employees (like retirement funds management, health care management, and other benefits management). B2G Business-to-government involves companies who sell the bulk of their goods and services to state, local, and national governments. C2C Consumer-to-consumer sites primarily offer goods and services to assist consumers to interact (e.g., auctions). Hybrid Combines B2B and B2C models. Forms of EC

10 B2C Strategies for E-Commerce DIGITAL PRODUCTS: The products and services that can be delivered via internet. Eg songs, software,movies,chat etc. DIGITAL PRODUCTS: The products and services that can be delivered via internet. Eg songs, software,movies,chat etc. PHYSICAL PRODUCTS: The products and services that can not be delivered via internet, instead they must be transported to the consumer by some physical means. PHYSICAL PRODUCTS: The products and services that can not be delivered via internet, instead they must be transported to the consumer by some physical means. VIRTUAL SALE Vs HYBRID SALE: VIRTUAL SALE Vs HYBRID SALE: Virtual stores do not operate with the physical store fronts, they completely operate with transections made online. Whereas Hybrid sale operate with the both web based and physical store fronts where customer can enter and purchase the products. Virtual stores do not operate with the physical store fronts, they completely operate with transections made online. Whereas Hybrid sale operate with the both web based and physical store fronts where customer can enter and purchase the products.

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12 EC Benefits to Organizations Reduced cost of searching, purchasing and delivery. Reduced cost of searching, purchasing and delivery. Broaden markets that helps small businesses compete against large companies Broaden markets that helps small businesses compete against large companies Enables more individuals to work at home and to do less traveling and organizations have to bear less expenses. Enables more individuals to work at home and to do less traveling and organizations have to bear less expenses. Choice Choice Consumers can select from many vendors and many more products than they could locate otherwise Consumers can select from many vendors and many more products than they could locate otherwise Consumers can get customized products, from PCs to cars, at competitive or bargain prices Consumers can get customized products, from PCs to cars, at competitive or bargain prices Consumers can find unique products and collectors items through virtual auctions that might otherwise require them to travel long distances to a particular auction place at a specific time. Consumers can find unique products and collectors items through virtual auctions that might otherwise require them to travel long distances to a particular auction place at a specific time.

13 EC Benefits to Customers before,during and after sale Convenience Convenience Consumers can conduct online quick comparisons to find less expensive products and services Consumers can conduct online quick comparisons to find less expensive products and services Customers can shop or make other transactions 24 hours a day, year round, from almost any location Customers can shop or make other transactions 24 hours a day, year round, from almost any location Access to the Product information immediately available 24 hours a day, year round, from almost any location Access to the Product information immediately available 24 hours a day, year round, from almost any location Relationships with the suppliers and financial community Relationships with the suppliers and financial community Consumers can interact with other consumers in electronic communities and can exchange ideas as well as compare experiences Consumers can interact with other consumers in electronic communities and can exchange ideas as well as compare experiences

14 E-Commerce Constraints High Cost for deploying EC setup High Cost for deploying EC setup Security concerns: prevention,protection,detection and recovery. Security concerns: prevention,protection,detection and recovery. Ethical issues: false order placing, hacking,cracking, Web tracking, privacy, Ethical issues: false order placing, hacking,cracking, Web tracking, privacy, Immature or unavailable software Immature or unavailable software Legal issues like trade mark, Taxes and fees, Copyright, IPR and licensing Legal issues like trade mark, Taxes and fees, Copyright, IPR and licensing

15 The Internet History History Architecture Architecture Intranet Intranet Extranet Extranet Understanding URL Understanding URL Understanding IP Understanding IP What is web site, web page and Hyper text What is web site, web page and Hyper text Protocols Protocols

16 Figure 7.6 A sample journey of information from one Internet computer to another. Internet Architecture

17 Internet The largest computer network in the world (a network of networks), More than 200,000 networks are connected. The largest computer network in the world (a network of networks), More than 200,000 networks are connected. The Internet is a global, interconnected network of millions of computers (hosts). The Internet is a global, interconnected network of millions of computers (hosts). Began in 1969 with the US DODs ARPANET. Began in 1969 with the US DODs ARPANET. In 1985 NSF built NSFNET. In 1985 NSF built NSFNET. Began as one net work called ARPANET (Advance research projects agency) using packet switching Began as one net work called ARPANET (Advance research projects agency) using packet switching ARPA was the department of DARPA. ARPA was the department of DARPA. Which was composed of govt, military, academics and scientists. Which was composed of govt, military, academics and scientists. Milnet was also military based network. Milnet was also military based network. Goals of internet Goals of internet

18 World Wide Web An increasingly popular method of accessing the Internet. An increasingly popular method of accessing the Internet. Documents transmitted over the web are in HTML format (Hypertext Markup Language), or in any number of other compatible languages. Documents transmitted over the web are in HTML format (Hypertext Markup Language), or in any number of other compatible languages. HTML was created in 1989 by Tim Berners-Lee at CERN. HTML was created in 1989 by Tim Berners-Lee at CERN. Web browsers (Internet Explorer and Netscape,mozzila,opera,firefox) are commonly used tools for accessing the web. Web browsers (Internet Explorer and Netscape,mozzila,opera,firefox) are commonly used tools for accessing the web.

19 The Operation of the Internet (continued) New top-level domain zones: In November 2000, the first addition of a global top-level domains to the Internet since the 1980s occurred. New top-level domain zones: In November 2000, the first addition of a global top-level domains to the Internet since the 1980s occurred..aero (for the air-transport industry).aero (for the air-transport industry).biz (for businesses).biz (for businesses).coop (for cooperatives).coop (for cooperatives). Com. Com.mil.mil.edu.edu.net.net.org.org.info.info

20 Understanding URL http//:www.software.ibm.com/home/index.htm http//:www.software.ibm.com/home/index.htm Consists of multiple parts separated by dots. Consists of multiple parts separated by dots. Translated from right to left Translated from right to left = indicates protocol used or how document is transmitted = indicates protocol used or how document is transmitted www = world wide web service www = world wide web service Com=top-level specification or zone, domain name (not used for US based and international organizations Com=top-level specification or zone, domain name (not used for US based and international organizations

21 Ibm = name of company Ibm = name of company Software = name of particular machine Software = name of particular machine Home = directory name Home = directory name Index = file name of web document Index = file name of web document.html =indicates that document has been prepared in hyper text markup language.html =indicates that document has been prepared in hyper text markup language

22 More Nets Intranets, extranets, and virtual private networks (VPNs) are other networks that use web technology. Intranets, extranets, and virtual private networks (VPNs) are other networks that use web technology. Intranet looks like the Internet but is used only internally by an organization (university, business, etc.). Intranet looks like the Internet but is used only internally by an organization (university, business, etc.). Extranet is similar to an intranet but includes access available to partners, or customers. Extranet is similar to an intranet but includes access available to partners, or customers. VPNs are used to connect private data using the public telecommunications system. VPNs use tunneling. VPNs are used to connect private data using the public telecommunications system. VPNs use tunneling.

23 Includes , instant messaging, Voice over IP (VoIP), point-to-point file transfers (FTP), and groupware. Includes , instant messaging, Voice over IP (VoIP), point-to-point file transfers (FTP), and groupware. is still largest use in this area. is still largest use in this area. ISP (Internet Service Provider) connects the user to the Internet. ISP (Internet Service Provider) connects the user to the Internet.

24 Business Intelligence Business intelligence refers to the analysis performed by DSS, ES, EIS, data mining and intelligent systems. Business intelligence refers to the analysis performed by DSS, ES, EIS, data mining and intelligent systems. BI describes a verity of activities to pull together all the data required to make a sound business decision, regardless of where the data originate. BI describes a verity of activities to pull together all the data required to make a sound business decision, regardless of where the data originate. External databases: Commercial databases that provide information on virtually any subject. External databases: Commercial databases that provide information on virtually any subject. nes.com and are the examples. nes.com and are the examples. nes.comwww.gxs.com nes.comwww.gxs.com

25 Search Engines Search engines are used to index the contents of the Internet so that information about a specific topic can be located. Search engines are used to index the contents of the Internet so that information about a specific topic can be located. They are special computer programs having large databases that ask a user for a key word or a group of words to launch a search strategy to reach a web content in cyberspace. They are special computer programs having large databases that ask a user for a key word or a group of words to launch a search strategy to reach a web content in cyberspace. Managers should pay attention to search engines for two reasons: Managers should pay attention to search engines for two reasons: They provide useful and extensive access to information. They provide useful and extensive access to information. And, they can provide the visibility that becoming listed with them provides. And, they can provide the visibility that becoming listed with them provides. Google, founded in 1991 by two Stanford Ph.D. students, is the most popular search engine. Google, founded in 1991 by two Stanford Ph.D. students, is the most popular search engine. Other types of search engines include yahoo.com, excite.com, altavista.com, msn.com and askjeevs.com Other types of search engines include yahoo.com, excite.com, altavista.com, msn.com and askjeevs.com

26 What is IOS An IOS is a system in which all firms establish electronic linkage,so that all of the firms work together as a coordinated unit, achieving benefits that each could not achieve alone. An IOS is a system in which all firms establish electronic linkage,so that all of the firms work together as a coordinated unit, achieving benefits that each could not achieve alone. The participating firms are called trading partners, business partners or business alliances. The participating firms are called trading partners, business partners or business alliances. Proactive (Usually this approach is taken by IOS sponsors) and reactive business partners (Participant responds are using reactive approach): Proactive (Usually this approach is taken by IOS sponsors) and reactive business partners (Participant responds are using reactive approach): A frequently used term with IOS is EDI. A frequently used term with IOS is EDI. EDI (Electronic Data Interchange) is one of the oldest forms of e-business. EDI (Electronic Data Interchange) is one of the oldest forms of e-business. EDI is the direct computer to computer transfer of business information, using a standard format. EDI is the direct computer to computer transfer of business information, using a standard format. Software programs on different systems can exchange information without human intervention. Software programs on different systems can exchange information without human intervention. Quote requests, order forms, etc. Quote requests, order forms, etc. The communication lines, communication hardware and support services are generally provided by the telecommunication companies eg AT&T. The communication lines, communication hardware and support services are generally provided by the telecommunication companies eg AT&T.

27 Benefits of IOS Comparative efficiency: By joining IOS firms can produce services and goods with greater efficiency than of other firms. Comparative efficiency: By joining IOS firms can produce services and goods with greater efficiency than of other firms. Comparative efficiency may be in the terms of internal efficiency and inter-organizational efficiency. Comparative efficiency may be in the terms of internal efficiency and inter-organizational efficiency. Bargaining power: The ability of the firm to resolve disagreements with the suppliers and the customers to its own advantage is known as bargaining power. Bargaining power: The ability of the firm to resolve disagreements with the suppliers and the customers to its own advantage is known as bargaining power. This power is derived from the following bacis areas. This power is derived from the following bacis areas.

28 Cont…. Unique product feature: IOS enables firms to offer a USP to take competitive advantage. Unique product feature: IOS enables firms to offer a USP to take competitive advantage. Reduced search–related cost: Belonging to IOS firm can reduce cost for searching supplier, searching the product at low price. Reduced search–related cost: Belonging to IOS firm can reduce cost for searching supplier, searching the product at low price. Increased Switching cost: By using IOS firm deters its customers to switch to a competitor. An IOS achieves this benefit by providing customer with such an information, hardware, software and data communication channels that would have to replaced if the product were purchased from another firm. Increased Switching cost: By using IOS firm deters its customers to switch to a competitor. An IOS achieves this benefit by providing customer with such an information, hardware, software and data communication channels that would have to replaced if the product were purchased from another firm. Vendor stock replenishment: A special IOS in that the customer trusts the supplier enough to allow the supplier to access its computer–based inventory system. Vendor stock replenishment: A special IOS in that the customer trusts the supplier enough to allow the supplier to access its computer–based inventory system.

29 Cont….. Increased operational efficiency both internal and inter-organizational Increased operational efficiency both internal and inter-organizational Increased ability to compete. In terms of reduces cost of product manufacture Increased ability to compete. In terms of reduces cost of product manufacture Improved relationships with the trading partners. Improved relationships with the trading partners. Improved customer services. Improved customer services.

30 Mobile Commerce As PDAs, cell phones, and tablet computers converge; people will ultimately be able to connect to any business every place they go.

31 Cyberspace and information super highway A lucid /imaginary space that exists behind the computer screen where mind absorbed sensory experiences take place and people interact with this space while using different physical means. A lucid /imaginary space that exists behind the computer screen where mind absorbed sensory experiences take place and people interact with this space while using different physical means. Information super highway is used in the same context, but there is no complete agreement concerning its eventual impact on society. Information super highway is used in the same context, but there is no complete agreement concerning its eventual impact on society.


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