1. E-Commerce: Business on the Internet James Vickers, Boston College http://www.jamesvickers.com/education jamie@boston.ac.uk

2. What is it? E-Commerce means “Electronic Commerce” E-commerce encompasses the following: Electronic trading Commercial presence Business to Business transactions Customer interaction Inter-Business electronic communications that improve productivity Companies that use electronic technology to perform business activities

3. Examples of Technological Developments Mass-market computing and networking Cost has decreased 24/7 Home dial-up connection for approx £15 pcm Usage increased source nua.ie (2001) It is no longer just Hypertext, it is Hypermedia World-Wide Web Digital music, images, text, etc. “Search” available with mass data processing “Strong” cryptography – secure systems available

4. Examples of Business Developments New ways to conduct old business New companies New capabilities for old companies Death of some old companies “Empowered consumers” ?? New types of business More differentiation More competitors – good for the consumer

5. Why trade online? E-commerce provides businesses with: 24/7 Access to customers Diverse customer base: Abilities (Motor, audible and speech) Disabilities are easier to overcome by the use of electronic systems (if systems are implemented correctly!) Provide facilities to remote customers Historically, remote and diverse communities have not had access to specialist services Now all communities, globally, can access specialist services

6. Why trade online? E-commerce means: Stock does not “have” to be available Companies can advertise, and deliver in 28 days Companies can act as a portal for other companies Staffing Conventional shops must be staffed – either by the owner, or employed staff Web sites may not – may just be one person, with a single computer at home Overheads Shops, electric, water, council rates, rent, etc. Technology has decreased in price, therefore, ecommerce is cheaper to create and operate. If developed correct, an ecommerce “presence” can be cheaper than the physical presence.

7. Typical Services The following are approximate services available to people in the U.K: Typical services for a rural village (approx 500 inhabitants):  E.g: Public House, Village Store Typical services for a rural village (approx 1500 inhabitants):  E.g: Public House, Village Store, Pharmacy, Butchers, Bakery, Fast Food outlet, Garage, Hairdressers. Typical Services for a rural town (approx 15,000 inhabitants):  E.g: Clothing, Electrical Goods, Supermarket, Restaurants, Home Improvements, Department Stores, Motor Vehicle Traders Typical Services for a city (approx 1,000,000 inhabitants):  E.g. Lighting Specialists, Designer Clothes Store, Aquatics Centre, Gift Shops, Multi-National Chain Stores.

8. So what does this mean? If you study at DMU, you will not have to worry about where to shop – the shops are on your doorstep If you studied at Boston College, would you be able to visit a “Next” or “Discovery” store? No – you would have to travel at least 35 miles. Does everybody have access to a local bank? No – but with online banking, you do.

9. The diversification Trading fall into 3 categories: Business to Business (B2B) E.g: Wholesalers listing current stock prices to traders, and allowing automated trading Business to Consumer (B2C) E.g: On-line customers purchasing items, allowing online purchasing Consumer to Consumer (C2C) E.g: Auction or peer-to-peer sales / adverts How has this improved business? Automation of sales, meaning realistic and small stock levels. Immediate sales, monies and delivery processed “at the click of a button”. Real-time prices, meaning cheaper prices

10. The possibilities... Take this scenario: John lives in a rural village, he has motor impairments that force him to be unable to drive, and public transport does not run near him. He could use a taxi, but it is £20 per trip to the nearest town. How can he manage? Ecommerce: Online banking Online shopping

11. The problems Security – can it be guaranteed Technology – you must have it! Technology – it is expensive! Telephony – you must have it too! Experience – It is far from a simple task to operate and use ecommerce systems

12. An example Lloyds: LloydsTsb is the banking arm of Lloyds International One of the only banks left with rural branches found in villages They can reach even more customers by using Internet Banking Improves customer relations, allows locus of control to user. Allows, and promotes the use and purchase of their goods and services. Provides automation in services, and communications. Removes necessity for permanent and over-use of branches Customers can do everything, and in some cases more than at a cash point or their local branch (especially if rural): Manage direct debits and standing orders Apply on-line for credit cards, loans, foreign currency View permanent and previous bank statements

13. An example Lloyds insurance recently announced an initiative to automate their insurance claims. This project would cost £23m However, they estimate the delay in claims, which is caused by lack of automation, costs £25m per year. Benefits to Lloyds by saving money, and increasing productivity Saves the customer months of waiting for paper based claims to be processed and transferred Is this then a “Win, Win” situation?

14. But... How can be information be made secure? What if someone gained control of your bank account? Usernames and passwords used – securely checked by application and posting first Memorable information – you have to set a second password Secure web site used – 128Bit SSL secured. Fraud Well publicised! Barclays bank – user logged on, everyone with the same surname had their details revealed to the one user LloydsTsb – emails sent randomly, pretending to be Lloydstsb, asking for the recipient to email their account and sort code back to the sender! “Security Code” – The three digit ID on the back of your debit / credit card – purpose is ensure that the user of the card in an ecommerce transaction can prove they have the card. Chip & Pin – the new way to protect. You will soon be asked for your PIN number when you purchase online.

15. Business Conflicts Privacy vs. efficiency Data protection act requires privacy, business requires efficiency and speed Anonymity vs. accountability Users want to anonymous, businesses do not want to pry, but there is a line where tracking and monitoring needs to take place Commerce vs. law enforcement Speed is the essence, but laws must be adhered to. The operator is responsible, and accountable. Standardization vs. innovation Standards protect technology, innovation leads and advances it. A fine line between leading, and breaking what we know and can support. Global technology vs. local expectations Does the service meet the local expectations – and if so, does that still support the global outlook. Examine printing something as simple as “Please enter your Christian name” – is this racist, or simply a cultural notation? What is the difference in the colour “Red” between China and the UK?

16. Challenges in E-commerce We need a three-tier architecture This is a three-tier failure system too This is a three-tier system of expertise This is a three-tier system of security vulnerabilities This is a three-tier system of expenditure This has become cheaper People have become more IT literature Through practice Through initiative - such as the government’s desires for the e-Government to save money by automation – they need an IT literate society Through training – free course in basic IT, such as BBC’s WebWise courses

17. Challenges in E-Commerce Some services suffer Congestion At some point value can decrease with expansion. e.g. America Online flat-rate fiasco We must take into consideration the scale of what we intend to do online. Gaining and retaining a customer base Via incentives: special recognition, bias, gifts, e-mail reminders Revenue Sales alone is often not enough Advertisement through traditional adverts or “click throughs” Free Speech? Relationship with advertisers & among users Relationship with suppliers and compatriots

18. Essential Reading Current Internet User Statistics: http://www.clickz.com/stats/ http://www.clickz.com/stats/big_picture/geographics/article.ph p/5911_151151 http://www.clickz.com/stats/big_picture/geographics/article.ph p/5911_151151 LloydsTsb facilities www.lloydstsb.com LloydsTsb security warnings ZDNet www.zdnet.com Computer Weekly Newspaper