1. Amity School of Business 1 Amity School of Business BBA, Semester - II E - Commerce Arpan Sinha

2. Amity School of Business 2 Module -4 Models of E-Commerce and Network

3. Amity School of Business 3 Topics e-Business vs e-Commerce vs Internet What makes e-Business different from business? E-Business Characteristics Model of B2B EC Electronic Data Interchange (EDI) The Network – Internet, Intranet and Extranet Use of virtual Private Network

4. Amity School of Business 4 E-Business Vs E-commerce E-Business: Improving business performance through low cost and open connectivity: New technologies in the value chainNew technologies in the value chain Connecting value chains across businessesConnecting value chains across businesses in order to : Improve service/reduce costsImprove service/reduce costs Open new channelsOpen new channels Transform competitive landscapesTransform competitive landscapes E-Commerce E-Commerce: marketing selling buying of products and services on the Internet E-Commerce E-Commerce: marketing selling buying of products and services on the Internet e-Business is more than selling and marketing online!

5. Amity School of Business 5 Implement OpportunityAnalysis Re-Assess Understand Electronic Business ImplementationPlanning e-Business vs Business Implement OpportunityAnalysis Re-Assess Understand Business ImplementationPlanning ‘Traditional’: ‘E-Business’: Definitions of the future are ‘fuzzy’ Permanent and unpredictable change in the business and technology environment Time to market and speed are major competitive factors Continuous learning & fast adaptation is required Characteristics of an “Electronic Business journey”: Definitions are clear No change in the business and technology environment High time pressure Continuous learning Traditional business organization ‘develop step by step’: E-Business is not a project - but rather a journey that requires vision and non-linear procedures

6. Amity School of Business 6 The Benefits of e-Business Generate additional Revenues New markets New products New customers Reduce Costs (Integration and ‘Collaboration’) Process efficiency Reduce IT variety and -complexity Synergies with other initiatives Customer Retention (‘Added Services’ and ‘Virtual Community’) Know more about your customers Integrated channel management Proactive and personalized offerings Improve Image / Position Brand Applying innovative technologies Leadership enterprise Address younger customer segments Not to miss the boat Keeping options open Acquire know-how Focused investments

7. Amity School of Business 7 E-Business Characteristics There are three characteristics which when combine with the Disruptive Technology can have major impact on marketplace –Reach Over 1 billion user globally Connect to millions on products –Richness Detailed product information on 20 billion + pages index by Google. Blogs, Videos… –Affiliation Partnerships are key in the network economy

8. Amity School of Business 8 Model of B2B EC What is B2B Ecommerce? –Historically, Business has always been about exchange. Back in the days of barter, A seller exchanged an item with buyer for a different item. –When money introduced to represent the economic value, it eliminates barter. –Supply chain have existed since business was organized to deliver goods and service to customer.

9. Amity School of Business 9 What is b2b E-commerce? There are reason for emerging events. –Today’s customer has become more cost conscious and value conscious and demand quality products in timely manner. –The maturation for information technology and networks makes it possible to design supply chain to meet customer demand –The global dimensions, involving distance, cost, time, variety, and uncertainty, makes it almost mandatory that the long supply chains be managed efficiently around the clock.

10. Amity School of Business 10 Defining B2B E-Commerce refers to alternative ways of executing transaction or activities between buyer and sellers. It is the exchange of products, services, or information between them. B2B implies that both sellers and buyers are business organizations. B2B involves complex procurement, manufacturing, and planning collaboration; complex payment term; and round-the-clock performance agreements. The goal is to improve a firm’s process by optimizing the transfer of goods, services, and information between buyers and suppliers in the value chain.

11. Amity School of Business 11 A proposed list of technologies that quality for satisfying B2B processing needs includes the following. –Messaging products for facilitating secure, reliable data movement between trading partners. –Work flow and process flow products for implementing conversational logic. –Trading partner management products for helping identity where the data need to go and how they should get there. –Directories for assisting businesses in locating other businesses that provide a particular service or product. Traditional B2B e-commerce involves negotiations and contractual commitments between long term trading partners (Suppliers, Manufacturers). The nature of commitment is clearly defined and highly repetitive.

12. Amity School of Business 12 The traditional approaches to communication (phone, fax, face to face, and mail) are being replace by Web based Models- Auctions and exchanges. With B2B e-commerce, supply chain participants are directly connected. –For example : marex.com, a marine exchange, like boat builders, dealers, and yacht brokers who buy and sell wholesale

13. Amity School of Business 13 Buying Company Selling Company JIT Deliverer Intermediating Service Providers ERP Focus on procurementFocus on marketing and sales Focus on ensuring order fulfillment Focus on just in time delivery of items when needed Back end technical support Key b2b entities Information flow

14. Amity School of Business 14 In the figure following specific elements of B2B 1.Buying company : Focus on procurement in terms of reduced purchase price and cycle time. The buying company announces a request for purchase of certain product on its website, and the participating suppliers in the B2B network send their bids. 2.Selling Company : Focus on marketing and sales. The seller attracts the buying organization to its website for business. Each seller has unique catalog, pricing, policy, and discount. 3.Intermediating service provider : Focus on ensuring order fulfillment. Such a service provider mediates between the buying company and the supplier usually for parts and unique products.

15. Amity School of Business 15 4.JIT deliverer : Focus on just in time delivery. This phase of B2B is critical because ensuring delivery of items just when they are needed means savings in time and money. 5.Web-based platform : Focus on the Internet, Intranets, and extranets. An intranet connect islands of information on separate computer within the firm. An extranet is a dedicated network between business partners on the Internet. 6.B2B Tools : Focus on EDI (Electronic Data Interchange) and software agents. EDI is the electronic data exchange of business documents like bills, orders, and shipping notice between business partners. EDI is designed to convert proprietary data into a format that can be transmitted electronically

16. Amity School of Business 16 5.Back-end technical support : Focus on enterprise resource planning (ERP). Integrated B2B with technical infrastructure such as ERP, database management systems, and intranet data flow means keeping most information traffic on the supplier’s servers.

17. Amity School of Business 17 B2B Model Several Model have been established for B2B e-commerce based in who controls the marketplace : buyer, supplier, or intermediary. –Buyer-Oriented B2B –Supplied-Oriented B2B –Electronic-Auctions –Intermediary-Orientated B2B

18. Amity School of Business 18 B2B Model Buyer-Oriented B2B: In this B2B model, a buyer like General Motors that normally purchases hundreds of thousands products each month uses the internet by opening a marketplace on its own server and opening the window for suppliers to do the bidding. Buyer Market Supplier

19. Amity School of Business 19 B2B Models Supplier-Oriented B2B: The Supplier-oriented B2B model is closed in design to the B2C model. A manufacturer or a supplier invites individual customers as well as business customers to order products via its electronic store. For Example Dell and Cisco Supplier Market Business buyer Individual Customer

20. Amity School of Business 20 Electronic Auctions One of the internet’s unique features is bringing together people with narrow interests who are geographically dispersed. Web auctions can cater to such groups by providing an auction site. In an Auctions Seller offers a product or an item for sale. This is called “putting an item for bid” because the seller does not put a price on the item. A unique version of Supplier-Oriented architecture is the electronic auction. The internet is booming with all kinds of auction form eBay to hundreds of smaller imitators with questionable reputations. Electronic Auctions can be of three basic types: –Forward Auctions –Reverse Auctions –Internet Exchange Auctions

21. Amity School of Business 21 Electronic Auctions cont.. Forward Auctions : A forward auction generally is used to liquidate merchandise. One seller entertains bids from many buyers. This seller controlled model allows the seller to post products or services it want to sell via its auction Website. Surplus Seller Buyer 1 Buyer 2 Buyer 3 Buyer 4 Buyer 5 Buyer 6

22. Amity School of Business 22 Reverse Auctions : A reverse auction generally is used to solicit bids, and the lowest bidder wins. It is buyer controlled : buyer post the goods they want to buy, and sellers compete to provide them. The buyer pits suppliers against one another in a bidding war. The buyer review the bids and considers factors such as the location of the seller, cost of delivery and whether the seller can deliver on time. When the auction expires, the lowest bidder is selected. The buyer produces the money, and the seller ship the goods. Electronic Auctions cont.. Buyer Seller 1 Seller 2 Seller 3 Seller 4 Seller 5 Seller 6

23. Amity School of Business 23 Internet Exchange Auctions : An Internet Exchange auction involves many buyers and sellers who trade bids and offers until an agreement is reached to exchange product for payment. A third party operates exchange. All kinds of companies, trading products from airplanes to livestock, are included. A company first places a bid to buy or sell a product. Buyers and sellers work interactively with the bids and offers. When a deal is made, it is a match between a buyer and a seller on variables such as price, volume, and delivery costs. Electronic Auctions cont.. Buyer Seller 1 Seller 2 Seller 3 Seller 4 Seller 5 Seller 6

24. Amity School of Business 24 B2B Model cont…. Intermediary- Oriented B2B : The intermediary- oriented B2B setup revolves around an electronic intermediary company that establishes an exchange market where buyer and sellers can make deals. INTERMEDIARY Supplier Business Buyer

25. Amity School of Business 25 B2B Tools - EDI Most B2B traffic is handled by a communication tool called electronic data interchange (EDI). EDI allows one computer system to communicate with another computer system using a standardized electronic form. It is a computer to computer transfer of business information among businesses that use a specific standard format. The information exchange could be transaction data, request for quotes (RFQ), order acknowledgement, shipping status or scheduled, and so on. EDI has four Components. –Interbusiness –Computer-to-Computer –Standard Transaction –Standard format

26. Amity School of Business 26 Advantages and Drawbacks:- EDI has three tangible benefits Advantages 1.Cost Reduction and time Savings 2.Improved B2B problem resolution 3.Accuracy with integrity Drawbacks 1.EDI has yet to catch on as the perfect solution to information or for doing business. 2.EDI is point to point. Every contact requires special hardware and software. 3.EDI require expensive VAN networking to operate a peach efficiency. Only high volume, large trading partners can afford this investment. 4.As a system EDI is not easy to use, learn, or implement.

27. Amity School of Business EDI Justifying EDI : Under what conditions could a business justify implementing EDI? We know that EDI is a candidate if the business situation is paper intensive, people intensive, and requires fast information processing or delivery of goods. 1.Volume of data : Companies that handle a large volume of data on regular basis find EDI a welcome relief. 2.Frequency of document transmission and reception : because of high installation and maintenance expense, EDI is justified when document are sent and received frequently. 3.Content sensitivity : Information contained in documents involving international contracts or orders make the content highly sensitive for accuracy. 4.Time Sensitivity : EDI can ensure quick delivery, provide the firm’s internal information processing procedures are also quick and accurate, 27

28. Amity School of Business The Network Internet : Network of network are called Internet. (public network) Intranet : Network within an organization for smooth communication with full security. (Private network) Extranet : The Intranet Network accessed by Outsider/business Partner with the permission of organization are called Extranet. (Protected Network) 28

29. Amity School of Business What is VPN ?  Virtual Private Network is a type of private network that uses public telecommunication, such as the Internet, instead of leased lines to communicate.  Became popular as more employees worked in remote locations.  A virtual private network (VPN) extends a private network across a public network, such as the Internet. It enables a computer or network-enabled device to send and receive data across shared or public networks as if it were directly connected to the private network, while benefiting from the functionality, security and management policies of the public network. 29

30. Amity School of Business VPN VPN is a network that is constructed by using public wires — usually the Internet — to connect to a private network, such as a company's internal network. There are a number of systems that enable you to create networks using the Internet as the medium for transporting data. These systems use encryption and other security mechanisms to ensure that only authorized users can access the network and that the data cannot be intercepted. A VPN is created by establishing a virtual point-to- point connection through the use of dedicated connections, virtual tunneling protocols, or traffic encryption. 30

31. Amity School of Business Virtual Private Network  Employees can access the network (Intranet) from remote locations.  Secured networks.  The Internet is used as the backbone for VPNs  Saves cost tremendously from reduction of equipment and maintenance costs.  Scalability 31

32. Amity School of Business Remote Access Virtual Private Network 32

33. Amity School of Business Brief Overview how VPN works Two connections – one is made to the Internet and the second is made to the VPN. Datagrams – contains data, destination and source information. Firewalls – VPNs allow authorized users to pass through the firewalls. Protocols – protocols create the VPN tunnels. 33

34. Amity School of Business Four Critical Functions  Authentication – validates that the data was sent from the sender.  Access control – limiting unauthorized users from accessing the network.  Confidentiality – preventing the data to be read or copied as the data is being transported.  Data Integrity – ensuring that the data has not been altered 34

35. Amity School of Business Use of VPN Boost internet security and browse the web anonymously using a VPN. A VPN is a virtual private network and it has several uses. It prevent people spying on you when you use the internet. This is useful if you travel with a laptop, smartphone or tablet and access Wi-Fi hotspots in public places. 35

36. Amity School of Business Use of VPN in Industries Healthcare: enables the transferring of confidential patient information within the medical facilities & health care provider Manufacturing: allow suppliers to view inventory & allow clients to purchase online safely Retail: able to securely transfer sales data or customer info between stores & the headquarters Banking/Financial: enables account information to be transferred safely within departments & branches General Business: communication between remote employees can be securely exchanged 36

37. Amity School of Business Advantages Of VPN Advantages : Cost Saving –Eliminating the need for expensive long-distance leased lines –Reducing the long-distance telephone charges for remote access. –Transferring the support burden to the service providers –Operational costs Advantages : Scalability –Flexibility of growth –Efficiency with broadband technology 37

38. Amity School of Business Disadvantages of VPN VPNs require an in-depth understanding of public network security issues and proper deployment of precautions Availability and performance depends on factors largely outside of their control Immature standards VPNs need to accommodate protocols other than IP and existing internal network technology 38

39. Amity School of Business 39 Thank you