Chapter 9 e-commerce systems- MIS- MBA-1st Trimester- MBS

1. Chapter - 9

2. eCommerce is
buying, selling, marketing & servicing
of products, services and information
over a variety of computer networks.

3. • e-Commerce is changing the shape of competition,
speed of action and streamlining of interactions,
products and payments from customers to
companies and companies to suppliers
• e-Commerce encompasses the entire online process of
developing, marketing, selling, delivering, servicing and
paying for goods and services transacted on the
internetworked, global marketplace of customers, with
the support of a worldwide network of business partners
Disappearing geophysical barriers
e-Commerce

4. • eCommerce supports every step of commercial process
– Advertising, Sales and Customer support on the web
– Internet Security for safe transaction & payment
– Assurance of delivery completion from dispatcher to
delivery
• Interactive marketing, ordering and payments
• eCommercealso includes eBusinessprocessessuch as
– Extranet access to inventory database by customers
– Intranet access to CRM by sales & customer service reps
– Customer collaboration in product development for
marketing & discovery via email exchanges and internal
newsgroups
e-Commerce

5. A range of business processes to support the electronic
buying and selling of goods and services

6. E-Commerce
Technologies
Hardware
Software
Data
Networking

7. Categories of e-Commerce
• Business-to-Consumer
– Business must develop attractive electronic
marketplace to sell to consumers
– Virtual storefronts, multimedia catalogs, interactive
order processing, electronic payment, online
customer support
– form of interactive media/electronic marketing that
allows customers to view and order merchandise
online
– customers can read about the history of the product,
browse through product offerings, and place orders,
all through a device

8. • Business-to-Business
– a commerce transaction between businesses
– E-business marketplaces and direct market links
between businesses
– Internet and Extranet e-commerce catalog
websites for business customers and suppliers
– E-commerce web portal for
auction
– EDI
– Fastenal, Office Max, Staples
Categories of e-Commerce

9. • Consumer-to-Consumer
– One consumer selling to another consumer online
– Usually facilitated by a third-party site that helps
take care of the details of the transaction
– Online auctions, posting to newspaper sites,
personal websites, e-commerce portals
– Free classified advertisement, auctions, forums,
and individual pages for start-up entrepreneurs
– eBay, Craigslist, Amazon, OLX, kaymu
Categories of e-Commerce

10. e-Commerce Process Architecture

11. Access Control and Security
• E-commerce processes must establish mutual trust
and secure access between parties by
– Authenticating users by using User names and Passwords
– Authorizing access
– Enforcing security & Encryption key
– Digital certificates and signatures
• Restricted access areas
– Other people’s accounts
– Restricted company data
– Webmaster administration areas
• Security processes protect the e-commerce
resources from threats and failures

12. Profiling and Personalizing
• ‘Electronic Profiling’ gathers data on you and your
website behavior and choices
– User registration
– Cookie files and tracking software
– User feedback
• Profiling is used for
– Personalized (one-to-one) marketing
– Authenticating identity
– Customer relationship management
– Marketing planning
– Website management

13. Search Management
• Search processes help customers find the
specific product or service they want
– E-commerce software packages often include
a website search engine
– A customized search engine may be acquired from
companies like Google or Requisite Technology
– Searches are often on content or by parameters

14. Content and Catalog Management
• Content Management Software
– Helps develop, generate, deliver, update, and archive
text and multimedia information at e-commerce
websites
• Catalog Management Software
– Helps generate and manage catalog content
– Ex. Grainger.com, industrial part distributer uses
CenterStage catalog management software suite
• Catalog and content management software works
with profiling tools to personalize content
– Includes product configuration and
mass customization

15. Workflow Management
• Manages and automates the business processes in
e-commerce applications with the help of workflow
software engine
• Workflow models express predefined
• Ensures proper transactions and work activities are
performed
• Ensures correct data and documents are routed to
the right employees, customers, suppliers and others
• Sets of business rules • Roles of stakeholders
• Authorization requirements • Routing alternative
• Databases used • Task sequences

16. Example of Workflow Management

17. Event Notification
• Most e-commerce applications are event
driven that responds to multitude of events
– Responds to such things as customer’s first
website visit and payments & delivery
– Monitors all e-commerce processes
– Records allrelevant events, also problem situations
– Notifies all involved stakeholders
– Works in conjunction with user-profiling software
and workflow management software

18. Collaboration and Trading
• Processes that support vital collaboration
arrangements and trading services
– Needed by customers, suppliers, and other
stakeholders
• Online communities of interest
– E-mail, chat, discussion groups
– Enhances customer service
– Builds loyalty

19. Electronic Payment Processes
• Complex processes
– Nearly anonymous electronic transactions
– Many security issues
– Wide variety of debit and credit alternatives
– Financial institutions may be part of the process

20. • Web Payment Processes
– Shopping cart process
– Credit card payment process
– Debit and other more complex processes
• Electronic Funds Transfer (EFT)
– Major payment system in banking, retail
– Variety of information technologies capture
and process money and credit card transfers
– Most point-of-sale terminals in retail stores
are networked to bank EFT systems
Electronic Payment Processes

21. Secure
electronic
payment
system

22. Securing Electronic Payments
• Network sniffers easily recognize credit card
formats
– Encrypt data between customer and merchant
– Encrypt data between customer and financial
institution
– Take sensitive information off-line

23. E-Commerce Application Trends

26. E-Commerce Success Factors
• On the internet, the barriers of time, distance and form
are broken down, and businesses are able to transact the
sale of goods and service 24 hours a day, 7 days a week,
365 days a year with customers all over the world
• It’s even possible to convert a physical goods like CDs,
packaged software, a newspaper to a virtual goods like
MP3 audio, downloadable software, information in HTML
format
• No site is close to its web customers and competitors are
one click away
– It’s vital to build customer satisfaction, loyalty and
relationships so they keep coming back to the web store

27. E-Commerce Success Factors
Selection and value
• Offer a good selection of attractive products and
services
• Competitive price
– Higher quality, satisfaction guarantee, top
customer support, top after sale service, buy-
back guarantee
– REI.com -> How to Choose & money-back
guarantee

28. E-Commerce Success Factors
Performance and service
– Fast and easy navigation while browsing, selecting
and paying in web store
– Efficient design for ease of access, shopping & buying
• Efficient server power and network capacity to
support web site traffic
– Friendly, helpful, quick and easy web shopping
experience and customer service
– Availability of goods in inventory
– Prompt Shipping

29. E-Commerce Success Factors
Look and Feel
– Attractive web storefront, shopping area and
multimedia product catalog
– Exciting shopping experience through
• Audio, Video and Animation & Graphics
• Simple and Comfortable look and feel
• Virtual Storefront experience
Browse
product
Section
Select
Products
Drop into
Virtual
Shopping
Cart
Go to
Virtual
Checkout
Station
Pay for the
Order

30. Advertising
• Traditional Media
• Targeted& personalizedBannerads& Webpage
• Email promotions
and Incentives
• Coupons, discounts, special offers
• vouchers for other web services and other e-tailers
• Being part of web banner advertising exchange
programs with thousands of other web retailers
E-Commerce Success Factors

31. Personal Attention
• E-Commerce software records details of site visits
and builds user profiles
• Website encourage or mandates to register
• Sites requires to fill out a personal interest profile
• Personalized shopping experience
– Welcomed by name
– Greeted with special offers
– Guided to parts of the sites of visitor’s interest profile
• One-to-One Marketing & Relationship Building
E-Commerce Success Factors

32. Community Relationships
• Giving like-minded online customers a feeling of
belongingness via website relationship & affinity
marketing programs
– Build & Promote Virtual community of customers
– Web-based collaboration tools
– Discussion forums, Newsgroups, Chat rooms
– Message board systems
– Facebook & Tweeter
– Github & Stackoverflow
– Amazon Grapevine & Amazon Giver
E-Commerce Success Factors

33. Security
• Customer must feel confident that credit card
transaction, personal information are secure
• Customer must feel the business, website and
products can be trusted as advertised
and Reliability
• Reliable service of shipping as soon as order is filled,
in the time frame promised
• Reliable customer support
E-Commerce Success Factors

34. Great Customer Communication
• The need for constant and informative
communicative channels
• Despite conveniences, customers still have questions
that needs to be answered by a human being
• ‘Old fashion’ way of handling customer query about
product information, order status or order
modification
E-Commerce Success Factors

35. Web store Requirements

36. Types of e-commerce marketplace
• One to Many
– Sell-side marketplaces
– One supplier dictates product offerings and prices
– Dell.com, Walmart.com
• Many to One
– Buy-side marketplaces
– Many suppliers bid for the business of a buyer
• Some to Many
– Distribution marketplaces
– Unites suppliers who combine their product catalogs
to attract a larger audience

37. Types of e-commerce marketplace
• Many to Some
– Procurement marketplaces
– Unites major buyers who combine purchasing
catalogs
– Attracts more competition and thus lower prices
– Auto industry
• Many to Many
– Auction marketplaces
– Dynamically optimizes prices
– eBay and Craiglists

38. Clicks And Bricks in e-Commerce
Clicks-and-bricks strategy
• Should the company integrate its e-commerce virtual
business operations with our traditional physical
business operations or keep them separate?
• Success will go to those who can integrate Internet
initiatives with traditional operations
– Merging operations has trade-offs

39. Clicks and Bricks Strategy

40. E-Commerce Integration
• The business case for merging e-commerce
with traditional business operations
– Move strategic capabilities in traditional
operations to the e-commerce business
– Integrate e-commerce into the traditional
business
• Sharing of established brands
• Sharing of key business information
• Joint buying power and distribution efficiencies

41. Other Clicks and Bricks Strategies
• Partial e-commerce integration
– Joint ventures and strategic partnerships
• Complete separation
– Spin-off of an independent e-commerce company
• Barnes and Noble’s experience
– Spun off independent e-commerce company
– Gained venture capital, entrepreneurial culture, and
flexibility
– Attracted quality management
– Accelerated decision making
– Failed to gain market share