B2B has been around almost over 30 years. It started on proprietary networks between companies. Recently there is sufficient technology to allow companies build up interorganizational networks over the Internet. B2C It bacame very popular after the Internet arrives. C2C is a relatively new concept. There are some internet sites which allow individuals to sell, to but or to exchange goods or services by paying a small transaction commission.
One of the first movers is American Hospital Supply. In 1980’s they realized there is a significant increase in efficiency of order processing. The system yielded reduced cost, just in time inventory management. And it allows locking in trading partners. EDI = Chrysler required its parts suppliers to participate its interchange data network Electronic Markets : Rather than having links only link existing trading partners in tightly coupled arrangements, electronic market could conceivably include large number of buyers and seller
The standard X12 EDI document format is also called a transaction set. There are substandards of X12 for certain types of transactions like : Pre-Order X12 840 (Quoting) Purchase Order X12 840 Materials Management (X12 856) Financial (Invoice, X12 810) There are also some industry specific subset of ANSI ASC X12
As you see an EDI system enables the the company’s information system to process the information it receives. About 70 thousand private sector companies in the United States currently use EDI.
As in the case of Chrysler High volume of data flow is available. It is fast and secure. Only large companies can afford it. Because it requires dedicated telephone lines or special wiring. Very expensive Restricts users to specific hardware and software platforms. IBM and General Electric offer VAN connections. Although the number of companies maybe hundred times more than the ones over VAN’s the $ amount is 20 times more than internet commerce.
This is more detailed diagram showing how an EDI system works. VAN
First for Business to Consumer, second for B2B E-commerce companies will shift from traditional electronic data interchange to more standard based, easier to implement Internet commerce solutions. According to many people, EdI will be still around. Because it’s faster, secure and most importantly over the years became very developed. Bugs are eliminated.
You do not have to have such an organization operating behind the brick walls any more. There are companies which operates solely on the Internet. Security is a big concern especially for B2B commerce.
Data leaves your computer begins its journey over the network, in this case over the Internet which is a public network. Someone can interrupt this flow and obtain your data. That might be the # of credit card or any personal information. SSL is developed by Netscape. It basically encrypts all data before transfering it. DC is a recognized standard for confirming a given website actually the identity of the SSL using partner. When transmitting or receiving data. SET to secure transmission of credit card information. Developed by Netscape, Microsoft , Master Card and Visa. PCT Private Communication Technology- Microsoft. This is an enhancement of SSL. Fire wall - A system that filters access to a protected network. Highly secure systems have multiple firewalls. Digital Signature is a code attached to every electroniuc message . Showing that the message has not been altered after it was sent. This code is called HASH code. Also shows the identity of the sender VPI- A company can create its own network based on the Internet using security software.
e-CommercePresented by Kerem SARIOGLU
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