e-Commerce• Definition• Types of e-Commerce• History• Electronic Data Interchange (EDI)• The choice of the technology: the Internet• Challenges & Difficulties• e-Commerce strategies• The change in business practice• Future trends of the e-Commerce
e-Commerce Definition • Conducting of business communication and transactions over networks and through computers. • Electronic commerce is the buying and selling of goods and services, and the transfer of funds, through digital communications. • EC also includes all inter-company and “intra-company functions” (such as marketing, finance, manufacturing, selling, and negotiation)
e-Commerce Types of e-Commerce • Business to Business Over 30 years • Business to Consumer • Consumer to Consumer
e-Commerce History • Exchange of data across network. • Interorganizational data exchange. • Electronic Data Interchange EDI • Increasing standardization of EDI • Electronic Markets (Nasdaq) • Public Protocols, public network infrastructures: Value Added Networks VAN, Internet • Internet Commerce
e-Commerce EDI - Electronic Data Interchange Definition: “A series of standards which provide computer to computer exchange of business documents over interorganizational or intraorganizational networks” • Purchase orders • Shipping documents • Invoices • Invoice payments
e-Commerce EDI • Motives: – To increase efficiency in order processing – To reduce costs (just in time) – Greater ability to customize products and services – Competitive advantage (In 1980’s) Sabre airline booking system • Early adoptions are very proprietary: – Private Networks are very limited and close systems – Put into place by dominant firms – Only very large firms can afford it.
e-Commerce EDI Standard Formats • ANSI ASC X12 – American National Standards Committee • Accredited Standards Committee (1979) • UN/EDIFACT – International Standards settings under the United Nations.
e-Commerce Example of EDI System 2. The sale info is distributed to the Main Office Local Store Main Office 3. Main office’ 1. A Sale transaction information IS finds out the is stored into a local store need of inven- information system tory of each store 5. Suppliers fill the 4. Main office IS sends order, sending a purchase order to directly to the store the suppliers’ IS Suppliers
e-Commerce Connection ? • Exchange business documents Customized with one or two trading partners: Network Solutions • To be connected to an electronic Value Added market via a VAN Networks VAN VAN:A privately owned network that provides a specific service, such as legal research or access to a specialised database, for a fee.
e-Commerce The Choice of Technology: The Internet WHY? Other Choices • VAN’s (IBM Global Network) • Dial Up Connections (Teletel-France)
e-Commerce The Choice of Technology: The Internet Why? • Global connectivity at very low cost • Reduced transaction costs and delivery time • Easy data collection • Easy and fast customer support • Allow bypassing intermediaries
e-Commerce Difficulties & Challenges • Management Challenges – Organizational Changes – The applicability of a business model on the Internet for the company – Centralization or Decentralization • Technical Challenges – Security – Speed
e-Commerce Security Solutions – SSL - Secure Socket Layer – DC - Digital Certificate – SET - Secure Electronic Transaction – PCT - Private Communication Technology – Firewall – Digital Signature – For B2B e-commerce VPI - Virtual Private Internet
e-Commerce The Needs to Conduct e-Commerce on the Internet • A product to offer • A web site – Professional look – Rich content – Build it – Buy it – Borrow it – Buddy-up (Partner) – User friendly – Speedy download – Integrated with off-line business
e-Commerce Needs to conduct e-Commerce on the Internet (Cont’d) • An internet service provider (ISP) • A Domain name • A Web host • Web tools – Software – A professional e-mail program – Auto responders – A text editor , A macro program – Graphic Programs & Html editor – Shopping cart System & secure purchase with credit card – Search engine submission software – Web position analyzer software
e-Commerce Surviving Marketing Strategies in e-Commerce • The Magnet Effect The new way of selling; Build an audience and then look for something to sell. • Spiral Marketing To keep the audience attraction: – Use passive media – Use the Web site – Use e-mail • Domino Effect A way to predict when technology trends will impact your business
e-Commerce The Future Trends of the e-Commerce • Faster Access • High Security • More Customization • Extranet