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1. Ch # 4
Electronic Commerce and the Digital Organization
Introduction
It is radically changing how people learn, work, play, enjoy and
consume. The center of revolution is browser technology. The
“technology” has moved from the “Back office” to the front line.
Increasingly, technology is shifting the firm’s relationships, with
its customers from “face to face” to “screen to face” interactions.
The impact of Internet on business is akin to previous
innovations that transformed not just one business sector but
every sector. The Internet concerns every sector of economy as it
changes the way business should sensibly organize its activities
and go to market. In this unit we will study the concept,
advantages-disadvantages and history of e-commerce.

2. Electronic Commerce
E-commerce is a selling and transfer process requiring several institutes. It is
systematic and organized network for the exchange of goods between produces
and consumers. The Net aims to establish the interconnections between
producers and consumers directly and in this, the Internet embraces all those
related activities which are indispensable for maintaining a continuous, free and
uninterrupted distribution and transfer of goods. The Website or portals may be
categorized into commercial and non-commercial.
Definition of Electronic Commerce:
1-“E-commerce denotes the use of electronic transmission media
(telecommunication) to engage in the exchange of products and services requiring
transportation either physically or digitally, from location to location”.
2-“E-commerce describes the process of buying and selling (or exchanging) of
products, services and information via computer networks including the internet”.
3-“E-commerce can be defined as the technology-mediated exchanges between
parties (individuals, organizations, or both) as well as the electronic based intra or
inter organizational activities that facilitate such exchanges”.

3. Digital Organization:
Given the wish of some designers to be able to digitally express form and to
integrate their expressions into a process of analysis, what then happens to
these design intentions in the context of office practice? One would expect
creative design practices to exploit emerging digital technologies in
imaginative ways that support the realization of their design visions.
Effective management of the design process is crucial for the success of the
project. If should involve:
 A lead manager
 The co-ordination of the consultants, including and interlocking matrix of
their appointment documents which should also bare a clear relationship
with the construction contract.
 A detailed check list of the design requirements in the appointment
documents of consultants. This should also be se out in the main context
documentation.
 Ensuring the client fully understands the design proposals.
 The use of Coordinated Project Information

4. Internet based Business Models
The last thing you want to do is throw up a Website or a Web page, include an
email address, and call it done! Regardless of the type of business, you have to
determine what you’re going to do behind the scenes and how your electronic
commerce efforts will fit in with your regular business processes.
There is no simple step-by-step list of things you need to do to establish an E-
commerce process, no “one size fits all” method. But remember these facts:
 It’s not cheap.
 It’s not easy.
 It’s not fast.
Some companies have spent millions of dollars only to fold up their E-commerce
operations because they just weren’t working. Some companies have built a
Website without thinking through the entire process; only to find out they have
seriously hurt their normal operations. Some companies have realized that E-
commerce was simply not the Holy Grail it was made out to be.

5. How Internet Business Models Work
While there are many e-commerce business models, most
depend on two fundamental building blocks: businesses (B) and
consumers (C). From this foundation, you can derive four basic
models: B2B, B2C, C2B, and C2C. Somehow, most businesses
(both online and off) fall into one or more of these categories,
although they use a wide variety of ways to link buyers, sellers,
and manufacturers.
A business might sell goods it has manufactured itself, resell
those made by another company, or simply act as a middleman,
connecting the buyer and seller. The revenue streams flowing
between these parties is potentially even more complex,
because one company might (and should!) have numerous
sources of revenue, ranging from product sales to affiliate
commissions and advertising income.

6. The various model of Internet business are:
Business-To-Consumer (B2C):
The business-to-consumer (B2C) business model is perhaps the most
familiar e-commerce model.
Vendors sell goods and services over the Web to connected
consumers.
Business-To-Business (B2B):
Business-to-business (B2B) commerce is less in the public eye than B2C
but is a rapidly growing segment of the Internet economy. In this
model, businesses offer goods and services to other businesses over
the Internet. For instance, Safetylogic.com provides corporations with
an easy way to distribute safety materials to satellite plants and fill out
OSHA reports online. We will discuss B2B in detail later in the unit.

7. Consumer-To-Business (C2B):
Consumer-to-business (C2B) describes a system where consumers
use an online agent to look for a product or service that suits their
needs. Priceline.com is a prime example of the C2B model.
Consumer-To-Consumer (C2C):
Consumer-to-consumer (C2C) businesses act as agents between
consumers with goods and services to sell. Online auction site eBay
is perhaps the most prominent online C2C company.
Peer-To-Peer (P2P):
Peer-to-peer (P2P) is a relatively new e-commerce model. Not
unlike C2B and C2C, online agents assist in P2P transactions. P2P
businesses transact exchanges of information (such as files or dollar
amounts) between PCs or hand-held computing devices.

8. Intranets:
An intranet is a private network that is contained within an enterprise. This is a
network that is not available to the world outside of the Intranet. If the
Intranet network is connected to the Internet, the Intranet will reside behind a
firewall and, if it allows access from the Internet, will be an Extranet. The
firewall helps to control access between the Intranet and Internet to permit
access to the Intranet only to people who are members of the same company
or organization.
In its simplest form, an Intranet can be set up on a networked PC without any
PC on the network having access via the Intranet network to the Internet.
How Intranets Support Electronic Business:
Intranet can help the organizations create a richer, more responsive
information environment. Intranet corporate applications bases on the Web
page model can be made interactive using a variety of media, text, audio, and
video. A principal use of intranets has been to create on-line repositories of
information that can be updated as often as required. Product catalogs,
employee handbooks, telephone directories, or benefits information can be
revised immediately as changes occur.

9. Intranet Applications for Electronic Business :
Intranets are springing up in all the major functional areas of the
business, allowing the organization to manage more of its business
processes electronically.

10. Finance and Accounting:
Many organization have extensive TPS that collect operational data on
financial activities, but their traditional management reporting systems,
such as general ledger systems and spreadsheets, often cannot bring this
detailed information together for decision making and performance
measurement. Intranets can be very valuable for financial and accounting
information on-line in an easy-to-use format.
Human Resources:
Human resource can use intranets for on-line publishing of corporate
policy manuals, job postings and internal job transfers, company
telephone directories, and training classes. Employee can use an intranet
to enroll in healthcare, employee saving, and other benefit plans if it is
linked to the firm’s human resources or benefits system to take on-line
competency test.

11. Sales and Marketing:
One of the most popular applications for corporate intranets is to oversee
and coordinate the activities of the sales force. Sales staff can dial in for
updates on pricing, promotions, rebates, or customer or to obtain
information about competitors. They can access presentations and sales
documents and customize them for customers.
Manufacturing and Production:
In manufacturing, information-management issues are highly complex,
involving massive inventories, capturing and integrating real-time production
data flows, changing relationships with suppliers, and volatile costs. The
manufacturing function typically uses multiple types of data, including
graphics as well as text, which are scattered in many disparate systems.
Manufacturing information is often very time sensitive and difficult to
retrieve, because files must be continuously updated.

12. Purposes of an Intranet:
There are four fundamental purposes of an intranet:
 Content
 Communication
 Collaboration
 Activity
Historically, intranets have focused on content and communication, providing a platform
for corporate information and news. To be successful, however, there needs to be a
balanced focused on all four elements.
Roles of Intranet in Organization:
The internet is to the internal system of the organization what the internet is to its
external environment. That is it links internal data networks of the company but prevents
access to other outside the company. It also facilitates data gathering from with the
company. For example surveys can be easily conducted through the intranet to assess
employee moral or popularity of benefit packages. The intranet can be creatively put to
use.

13. INTERNET:
The Internet is a ‘network of networks’ that links computer systems around the world. It
allows communication across networks, i.e., communication can take place between one
network and another. This allows people to have access to information anytime and from
anywhere. It virtually makes accessible a sea of information and a nearly worldwide
audience at the click of a button.
Important Features of internet:
Some of the facilities that are available on the Internet are as follows:
World Wide Web: The Internet application that is currently drawing maximum attention is
the World Wide Web. It has dramatically influenced the online world and continues to grow
in popularity.
Direct Communication: Through e-mail (electronic mail), messages can be sent to or
received from any part of the world within a few minutes.
Shareware Software: The Internet is also a great medium for downloading free software.
You can get a truckload of free games, utilities and trial versions of software through the
Internet

14. Round-the-Clock Availability: Information on the Internet is available to users 24 hours a
day.
Central Repository of Data: The Internet is like a huge central warehouse of data that
people from all over the world can access.
Search Engines: These are like directories which help get any kind of information from the
world over within a few seconds.
Advertisement: A company can advertise its products/services through the Internet.
E-Commerce: The Internet is increasingly being used for conducting monetary transactions.
Through the Internet, you can shop and pay through your credit card or ask your bank to
transfer your money to a different account, without even leaving your desk.
Distance Learning: Several online distance learning courses are now being offered by
Pakistan and foreign universities on the Internet.
BBS and New Services: The Internet is perhaps the cheapest medium for online help. BBS
services are available on the Internet through which you can ask questions and get
immediate troubleshooting assistance.
Wide Area Networks: Using the Internet, organizations can collect and compile
information from offices spread over large geographical areas.

15. INTERNET APPLICATIONS:
The railroad industry is an important driver of a country’s economic growth. An
efficient rail network means transportation of goods and people at low cost and
in time and, thereby, it facilitates economic growth. However, the size and
complexity of problems which the railways face are also unique. Let us, for
instance, consider Indian Railways, which is one of the largest rail networks in
the world.
Airlines:
The air travel industry is one of the biggest users of information technology. There
is hardly any aspect of the airline business in which computer systems have not
been deployed for increasing revenues, reducing costs and enhancing customer
satisfaction.
 Online ticket reservation through Internet
 Flight and seats availability
 Last minute deals and auctions

16. Banking:
In the 1960s and 1970s, the banking industry was losing the battle of providing
good customer services because of impossibly heavy workloads. All major banks
already had branches in most major locations and they simply had to recruit more
and more staff to cope with the increasing number of customers.
 Back office computerization
 Front office computerization
 Automated teller machines (ATMs)
 Internet banking
 Credit card operations
Insurance:
Like banking, the insurance sector has also to contend with a lot of routine paper
work insurance policies, filed claims, survey or investigation reports, payment
receipts, etc. It is a perfect opportunity to use IT to reduce costs and processing
times.

17. Financial Accounting:
Financial accounting was one of the first business functions for which
software applications were developed. The importance of financial
accounting and management for any business cannot be
overemphasized, but the scale of transactions, the repetitive and
structured nature of the data and the sheer volumes involved in the
case of large corporates make for an ideal case for computerization.
Inventory Control:
For any manufacturing firm, managing inventory is crucial. High
inventory results in money being locked up unnecessarily, thereby
reducing liquidity and indirectly profitability (if you offer immediate
payment, most suppliers would be willing to offer you better rates).
 Bar coding system
 Hand-held terminals (HHTs)

18. Hotel Management:
The hotel industry is an integral part of the tourism industry, which is a vital source of
revenue and foreign exchange for a country’s economy. A vibrant hotel industry means
greater employment generation. However, since this industry relies on easy and quick
availability of information, the role of IT in its development and growth cannot be
overstressed.
Education:
Teaching has traditionally been associated with classroom instructions on a blackboard
with the instructor dependent almost entirely on his or her oratory and presentation skills
for holding the attention of the class. From a student’s perspective, she had to keep pace
with the instructor’s pace, which meant that the slower (though not necessarily less
intelligent) student was at a natural disadvantage. Similarly, some students were more
interested in a more in-depth study than the others.
 Computer-based training
 Internet
 Distance learning
 Computerization of administrative tasks

19. LAN, MAN AND WAN:
Earlier, a computer network consisted of mainframes in an enclosure.
One could see an input in the form of a punch card. These were read by
card readers and the output was in the form of printed results via local
printers. Local terminals were mostly used for control and programming
input.
Local Area Network (LAN):
LAN technology connects people and machines within a site. A LAN is a
network that is restricted to a relatively small area. LANs can be defined
as privately owned networks offering reliable-high-speed communication
channels that are optimized to connect information processing
equipment in a small and restricted geographical area, namely, an office,
a building, a complex of buildings, a school or a campus.

20. Metropolitan Area Network (MAN):
A MAN covers large geographic areas such as towns, cities or districts. By linking or
interconnecting smaller networks within a large geographic area, information is
conveniently distributed throughout the network. Local libraries and government
agencies often use a MAN to establish a link with private industries and citizens. A
MAN may also connect many MANs together within an area that is than that
covered by a LAN. The geographical limit of a MAN may span a city. MAN may be
available within a city.
Wide Area Network (WAN):
This technology connects sites that exist in diverse locations. WANs connect larger
geographic areas, with other parts of the world. The geographical limit of a WAN is
unlimited. Dedicated transoceanic cabling or satellite uplinks may be used to
connect this type of network. Hence, a WAN may be defined as a data
communications network covering a relatively broad geographical area to connect
LANs together between different cities with the help of transmission facilities
provided by such common carriers as telephone companies.