E-commerce began in the 1940s but grew with the development of electronic data interchange (EDI) in the 1970s-1990s. EDI allowed structured transmission of documents between organizations via private networks but was expensive. The growth of the internet reduced costs and allowed e-commerce to develop further by enabling online ordering, marketing, and purchases. E-commerce provides benefits such as lower costs, increased market access, and customization but also poses challenges around security, technology changes, and business model innovation.

1. INTRODUCTION
E-Commerce stands for “Electronic Commerce”. It initially started during the Berlin Airlift, Germany in 1948 when big corporate
started taking order for goods electronically with the help of telephones and other private networks.
In earlier years, Electronic Data Interchange (EDI) was used to achieve e-commerce. As bigger organizations forced the small to
medium scale enterprises to use the expensive solution EDI for dealing with them; however it proved fatal to the growth of e-com.
EDI was expensive due to the high cost of private networks. EDI is considered as the structured transmission of electronic data and
documents by electronic means over any Value Added Network (VAN). Value Added Networks simplify the communication process
by reducing the number of parties that you have to communicate with. VANs insert themselves between trading partners. They
typically operate on a mailbox scenario where a company would send a transaction to a VAN and the VAN would then place the
transaction in the mailbox of the receiver. The receiver would then contact the VAN and pick up any transactions it might have and
then send anything it might need to send. It is very similar to email, but rather than being unstructured text, it is used for structured
standardized data. Example: EasyLink company operates a Value Added Network that provides this ‘mailboxing’ type of service and
transmits the data using the Internet. It is used to transfer electronic documents or business data from one computer system to another
computer system, i.e. from one trading partner to another trading partner without human intervention. EDI actually dealt more with
documents like contracts, product orders, acknowledgements, etc rather than monetary exchange. The important point to note here is
that EDI used to work without human intervention. EDI was developed to integrate information across larger parts of an organisation’s
value chain from design to maintenance so that manufacturers could share information with designers, maintenance and other partners
and stakeholders. EDI grew rapidly in 1970s to 1990s to give birth to the concept of e-com. It is the growth of Internet across the
globe that made e-com possible with its reduced communication cost, faster delivery of goods & services, online marketing and online
buying, etc.
Definition:
E-Commerce is a very vast field and can be applied in majority of applications and areas. Hence, there is no agreed upon definition of
it. Its definition may vary from context to context.
In Business@The Speed of Thought, Bill Gates defines it as “Commercial activity that takes place by digital processes over a
network”.
Electronic commerce or e-commerce refers to a wide range of online business activities for products and services. It also pertains to
“any form of business transaction in which the parties interact electronically rather than by physical exchanges or direct physical
contact”.
A more complete definition is: “E-commerce is the use of electronic communications and digital information processing technology
in business transactions to create, transform, and redefine relationships for value creation between or among organizations, and
between organizations and individuals”.
According to the editor-in-chief of International Journal of Electronic Commerce, Vladimir Zwass, “Electronic commerce is sharing
business information, maintaining business relationships and conducting business transactions by means of telecommunications
networks”.
Electronic Commerce (EC) is where business transactions take place via telecommunications networks, especially the Internet.
Electronic commerce describes the buying and selling of products, services, and information via computer networks including the
Internet.
Ravi Kalakota and Andrew B. Whinston propose definitions from multiple perspectives. They write1[1]: “Depending on whom you ask,
electronic commerce has different definitions”.
From a communications perspective, “electronic commerce is the delivery of information, products/services, or payments via
telephone lines, computer networks, or any other means”.
From a business process perspective, “electronic commerce is the application of technology toward the automation of business
transactions and workflows”.
From a service perspective, “electronic commerce is a tool that addresses the desire of firms, consumers, and management to cut
service costs while improving the quality of goods and increasing the speed of service delivery”.
From an online perspective, “electronic commerce provides the capability of buying and selling products and information on the
Internet and other online services”.
According to Zwass, electronic commerce has been re-defined by the dynamics of the Internet and traditional e-commerce is rapidly
moving to the Internet. With the advent of the Internet, the term e-commerce began to include:
• Electronic trading of physical goods and of intangibles such as information.
• All the steps involved in trade, such as on-line marketing, ordering payment and support for delivery.
• The electronic provision of services such as after sales support or on-line legal advice.
• Electronic support for collaboration between companies such as collaborative on-line design and engineering or virtual business
consultancy teams.
Since transactions go through the Internet and the Web, the terms I-commerce (Internet commerce), i-commerce and even Web-
commerce have been suggested but are now very rarely used. Other terms that are used for on-line retail selling include e-tailing,
virtual-stores or cyber stores. A collection of these virtual stores is sometimes gathered into a ‘virtual mall’ or ‘cybermall’.
What is E-Business?
1

2. Practically, e-business is same as e-commerce and can be used interchangeably. But technically speaking, both are different concepts.
In fact there is no one definitive meaning of e-commerce or e-business that is universally established. E-business has many definitions
like e-commerce:
“E-business is the conduct of business on the Internet, not only buying and selling but also servicing customers and collaborating with
business partners”.
“E-business includes customer service (e-service) and intra-business tasks”.
“E-business is the transformation of key business processes through the use of Internet technologies. An e-business is a company that
can adapt to constant and continual change”.
“The development of intranet and extranet is part of e-business”.
Three primary processes are enhanced in e-business:
• Production processes, which include procurement, ordering and replenishment of stocks; processing of payments; electronic links
with suppliers; and production control processes, among others;
• Customer-focused processes, which include promotional and marketing efforts, selling over the Internet, processing of customers’
purchase orders and payments, and customer support, among others; and
• Internal management processes, which include employee services, training, internal information-sharing, video-conferencing, and
recruiting. Electronic applications enhance information flow between production and sales forces to improve sales force productivity.
Workgroup communications and electronic publishing of internal business information are likewise made more efficient.
In different contexts, e-com and e-biz can be subsets of each other. But, according to International Journal of Electronic Commerce,
e-com is the bigger set and e-biz is the subset of e-com in context of academics. In e-commerce, Information and Communications
Technology (ICT) is used in inter-business or inter-organizational transactions (transactions between and among firms/organizations)
and in business-to-consumer transactions (transactions between firms/organizations and individuals). In e-business, on the other hand,
ICT is used to enhance one’s business. It includes any process that a business organization (either a for-profit, governmental or non-
profit entity) conducts over a computer-mediated network. These include direct business activities such as marketing, sales and human
resource management but also indirect activities such as business process re-engineering and change management, which impact on
the improvement in efficiency and integration of business processes and activities.
Key Drivers of E-Com
E-com is vastly popular in USA than Europe; and afterwards come the developing countries. There are some key factors which are
responsible for success or failure of e-com in every nation. The chief criteria’s are mentioned as follows:
• Technological factors – The degree of advancement of the telecommunications infrastructure which provides access to the new
technology for business and consumers. It includes telecommunication infrastructure, pricing of it, ISPs, access to new bandwidths,
range of available services, ownership (private or public).
• Political factors – including the role of government in creating government legislation, initiatives and funding to support the use
and development of e-commerce and information technology. These factors include number and type of govt. incentives, government
laws for & against it; and public policies for e-com growth.
• Social factors – incorporating the level and advancement in IT education and training which will enable both potential buyers and
the workforce to understand and use the new technology. It includes skills of workforce, no. of online users, penetration rate of PCs,
computer literacy & IT skills; and technophilia – a willingness and ability to adopt new technology (highest in Japan).
• Economic factors – including the general wealth and commercial health of the nation and the elements that contribute to it. The
chief contributors in it are economic growth (GDP), average income, cost of hardware & software, cost of access to telecom
infrastructure, banking infrastructure and innovative business models.
Some other key factors at organizational level are as below:
• Organizational culture – attitudes to research and development (R&D); its willingness to innovate and use technology to achieve
objectives.
• Commercial benefits – in terms of cost savings and improved efficiency that impact on the financial performance of the firm.
• Skilled and committed workforce – that understands, is willing and able to implement new technologies and processes.
• Requirements of customers and suppliers – in terms of product and service demand and supply.
• Competition – ensuring the organization stays ahead of or at least keeps up with competitors and industry leaders.
Key Factors for E-Commerce Environment
Impact of E-Commerce
E-com has proved a revolutionary idea that has changed the global era. It has made the manufacturing, processing, assembling,
marketing & advertising, ordering from suppliers, online purchasing and selling of goods & services, etc faster and better. It has made
strong bonding between manufacturer & supplier, wholesaler & retailer, retailer & customer, customer & customer. Now, traditional
markets have become international markets and due to cheap and better communication technologies, relative cost of products and
services has decreased drastically. The middle man or broker is eliminated and the buyers can directly communicate with the sellers.

3. E-com has provided the customer with loads of choices, price comparisons, faster delivery and superior services. Some major areas
that e-com has effected significantly are as follows:
• Marketing – issues of on-line advertising, marketing strategies and consumer behavior and cultures. One of the areas in which it
impacts particularly is direct marketing. In the past this was mainly door-to-door, home parties (like the Tupperware parties) and mail
order using catalogues or leaflets. This moved to telemarketing and TV selling with the advances in telephone and television
technology and finally developed into e-marketing spawning ‘eCRM’ (customer relationship management) data mining and the like by
creating new channels for direct sales and promotion.
• Computer sciences – development of different network and computing technologies and languages to support e-commerce and e-
business, for example linking front and back office legacy systems with the ‘web-based’ technology.
• Finance and accounting – on-line banking; issues of transaction costs; accounting and auditing implications where ‘intangible’
assets and human capital must be tangibly valued in an increasingly knowledge based economy.
• Economics – the impact of e-commerce on local and global economies; understanding the concepts of a digital and knowledge-
based economy and how this fits into economic theory.
• Production and operations management – the impact of on-line processing has led to reduced cycle times. It takes seconds to
deliver digitized products and services electronically; similarly the time for processing orders can be reduced by more than 90 per cent
from days to minutes. Production systems are integrated with finance marketing and other functional systems as well as with business
partners and customers.
• Production and operations management (manufacturing) – moving from mass production to demand-driven, mass customisation
customer pull rather than the manufacturer push of the past. Web-based Enterprise Resource Planning systems (ERP) can also be used
to forward orders directly to designers and/or production floor within seconds, thus cutting production cycle times by up to 50 per
cent, especially when manufacturing plants, engineers and designers are located in different countries. In sub-assembler companies,
where a product is assembled from a number of different components sourced from a number of manufacturers, communication,
collaboration and coordination are critical – so electronic bidding can yield cheaper components and having flexible and adaptable
procurement systems allows fast changes at a minimum cost so inventories can be minimized and money saved.
• Management information systems – analysis, design and implementation of e-business systems within an organization; issues of
integration of front-end and back-end systems.
• Human resource management – issues of on-line recruiting, home working and ‘intrapreneurs’ working on a project by project
basis replacing permanent employees.
• Business law and ethics – the different legal and ethical issues that have arisen as a result of a global ‘virtual’ market. Issues such
as copyright laws, privacy of customer information, legality of electronic contracts, etc.
Benefits of E-Commerce for Organizations
• International marketplace- What used to be a single physical marketplace located in a geographical area has now become a
borderless marketplace including national and international markets. By becoming e-commerce enabled, businesses now have access
to people all around the world. In effect all e-commerce businesses have become virtual multinational corporations.
• Operational cost savings- The cost of creating, processing, distributing, storing and retrieving paper-based information has
decreased.
• Mass customization- E-commerce has revolutionised the way consumers buy good and services. The pull-type processing allows
for products and services to be customised to the customer’s requirements. In the past when Ford first started making motor cars,
customers could have any color so long as it was black. Now customers can configure a car according to their specifications within
minutes on-line via the www.ford.com website.
• Enables reduced inventories and overheads by facilitating ‘pull’-type supply chain management – this is based on collecting
the customer order and then delivering through JIT (just-in-time) manufacturing. This is particularly beneficial for companies in the
high technology sector, where stocks of components held could quickly become obsolete within months. For example, companies like
Motorola (mobile phones), and Dell (computers) gather customer orders for a product, transmit them electronically to the
manufacturing plant where they are manufactured according to the customer’s specifications (like color and features) and then sent to
the customer within a few days.
• Lower telecommunications cost - The Internet is much cheaper than value added networks (VANs) which were based on leasing
telephone lines for the sole use of the organisation and its authorised partners. It is also cheaper to send a fax or e-mail via the Internet
than direct dialing.
• Digitization of products and processes - Particularly in the case of software and music/video products, which can be downloaded or
e-mailed directly to customers via the Internet in digital or electronic format.
• No more 24-hour-time constraints - Businesses can be contacted by or contact customers or suppliers at any time.
Benefits of e-commerce to consumers
• 24/7 access - Enables customers to shop or conduct other transactions 24 hours a day, all year round from almost any location. For
example: checking balances, making payments, obtaining travel and other information. In one case a pop star set up web cameras in
every room in his house, so that he could check the status of his home by logging onto the Internet when he was away from home on
tour.
• More choices - Customers not only have a whole range of products that they can choose from and customize, but also an
international selection of suppliers.

4. • Price comparisons - Customers can ‘shop’ around the world and conduct comparisons either directly by visiting different sites, or
by visiting a single site where prices are aggregated from a number of providers and compared (for example www.moneyextra.co.uk
for financial products and services).
• Improved delivery processes - This can range from the immediate delivery of digitised or electronic goods such as software or
audio-visual files by downloading via the Internet, to the on-line tracking of the progress of packages being delivered by mail or
courier.
• An environment of competition - where substantial discounts can be found or value added, as different retailers vie for customers. It
also allows many individual customers to aggregate their orders together into a single order presented to wholesalers or manufacturers
and obtain a more competitive price (aggregate buying), for example www.letsbuyit.com.
Benefits of e-commerce to society
• Enables more flexible working practices - which enhance the quality of life for a whole host of people in society, enabling them to
work from home. Not only is this more convenient and provides happier and less stressful working environments, it also potentially
reduces environmental pollution as fewer people have to travel to work regularly.
• Connects people - Enables people in developing countries and rural areas to enjoy and access products, services, information and
other people which otherwise would not be so easily available to them.
• Facilitates delivery of public services - For example, health services available over the Internet (on-line consultation with doctors or
nurses), filing taxes over the Internet through the Inland Revenue website.
LIMITATIONS OF E-COMMERCE
• Lack of sufficient system security, reliability, standards and communication protocols.
• Rapidly evolving and changing technology, so there is always a feeling of trying to ‘catch up’ and not be left behind.
• Under pressure to innovate and develop business models to exploit the new opportunities which sometimes leads to strategies
detrimental to the organisation.
• Facing increased competition from both national and international competitors often leads to price wars and subsequent
unsustainable losses for the organisation.
• Problems with compatibility of older and ‘newer’ technology - There are problems where older business systems cannot
communicate with web-based and Internet infrastructures, leading to some organisations running almost two independent systems
where data cannot be shared.
• Computing equipment is needed for individuals to participate in the new ‘digital’ economy, which means an initial capital cost to
customers.
• A basic technical knowledge is required of both computing equipment and navigation of the Internet and the World Wide Web.
• Cost of access to the Internet, whether dial-up or broadband tariffs.
• Cost of computing equipment - Not just the initial cost of buying equipment but making sure that the technology is updated
regularly to be compatible with the changing requirement of the Internet, websites and applications.
• Lack of security and privacy of personal data - There is no real control of data that is collected over the Web or Internet. Data
protection laws are not universal and so websites hosted in different countries may or may not have laws which protect privacy of
personal data.
• Physical contact and relationships are replaced by electronic processes - Customers are unable to touch and feel goods being sold
on-line or gauge voices and reactions of human beings.
• A lack of trust because they are interacting with faceless computers.
• Breakdown in human interaction - As people become more used to interacting electronically there could be an erosion of personal
and social skills which might eventually be detrimental to the world we live in where people are more comfortable interacting with a
screen than face to face.
• Social division - There is a potential danger that there will be an increase in the social divide between technical haves and have-nots
– so people who do not have technical skills become unable to secure better-paid jobs and could form an underclass with potentially
dangerous implications for social stability.
• Reliance on telecommunications infrastructure, power and IT skills - which in developing countries nullifies the benefits when
power, advanced telecommunications infrastructures and IT skills are unavailable or scarce or underdeveloped.
• Wasted resources - As new technology dates quickly how you do dispose of all the old computers, keyboards, monitors, speakers
and other hardware or software?
• Facilitates Just-In-Time manufacturing - This could potentially cripple an economy in times of crisis as stocks are kept to a
minimum and delivery patterns are based on pre-set levels of stock which last for days rather than weeks.
INTERNET & OTHER NOVELTIES

5. Internet is the world wide network of computers that help one assist in sharing resources, instant messaging, emails,
videoconferencing, social networking, e-commerce applications, etc. Everyone knows about the internet and I don’t think there is any
need to explain the internet.
The Intranet
An intranet is a computer network that uses Internet Protocol technology to securely share any part of an organization's information or
network operating system within that organization. The term is used in contrast to internet, a network between organizations, and
instead refers to a network within an organization. Sometimes the term refers only to the organization's internal website, but may be a
more extensive part of the organization's information technology infrastructure. It may host multiple private websites and constitute an
important component and focal point of internal communication and collaboration. Any of the well known Internet protocols may be
found in an intranet, such as HTTP (web services), SMTP (e-mail), and FTP (file transfer protocol). Internet technologies are often
deployed to provide modern interfaces to legacy information systems hosting corporate data.
An intranet can be understood as a private analog of the Internet, or as a private extension of the Internet confined to an organization.
The first intranet websites and home pages began to appear in organizations in 1996-1997. Although not officially noted, the term
intranet first became common-place among early adopters, such as universities and technology corporations, in 1992.
Intranets have also contrasted with extranets. While intranets are generally restricted to employees of the organization, extranets may
also be accessed by customers, suppliers, or other approved parties. Extranets extend a private network onto the Internet with special
provisions for authentication, authorization and accounting (AAA protocol).
In many organizations, intranets are protected from unauthorized external access by means of a network gateway and firewall. For
smaller companies, intranets may be created simply by using private IP ranges, such as 192.168.*.*. In these cases, the intranet can
only be directly accessed from a computer in the local network; however, companies may provide access to off-site employees by
using a virtual private network. Other security measures may be used, such as user authentication and encryption. Alternatively, the
intranet domain may be publicly accessible, but users would need to log in before they could view most of the content.
Increasingly, intranets are being used to deliver tools and applications, e.g., collaboration (to facilitate working in groups and
teleconferencing) or sophisticated corporate directories, sales and customer relationship management tools, project management etc.,
to advance productivity. Intranets are also being used as corporate culture-change platforms. For example, large numbers of
employees discussing key issues in an intranet forum application could lead to new ideas in management, productivity, quality, and
other corporate issues.
In large intranets, website traffic is often similar to public website traffic and can be better understood by using web metrics software
to track overall activity. User surveys also improve intranet website effectiveness. Larger businesses allow users within their intranet
to access public internet through firewall servers. They have the ability to screen messages coming and going keeping security intact.
Because of the scope and variety of content and the number of system interfaces, intranets of many organizations are much more
complex than their respective public websites. Intranets and their use are growing rapidly.
Benefits of Intranet
• Workforce productivity: Intranets can help users to locate and view information faster and use applications relevant to their
roles and responsibilities. With the help of a web browser interface, users can access data held in any database the
organization wants to make available, anytime and - subject to security provisions - from anywhere within the company
workstations, increasing employees' ability to perform their jobs faster, more accurately, and with confidence that they have
the right information. It also helps to improve the services provided to the users.
• Time: Intranets allow organizations to distribute information to employees on an as-needed basis; Employees may link to
relevant information at their convenience, rather than being distracted indiscriminately by electronic mail.
• Communication: Intranets can serve as powerful tools for communication within an organization, vertically and horizontally.
From a communications standpoint, intranets are useful to communicate strategic initiatives that have a global reach
throughout the organization. The type of information that can easily be conveyed is the purpose of the initiative and what the
initiative is aiming to achieve, who is driving the initiative, results achieved to date, and who to speak to for more
information. By providing this information on the intranet, staff has the opportunity to keep up-to-date with the strategic
focus of the organization. Some examples of communication would be chat, email, and or blogs. A great real world example
of where an intranet helped a company communicate is when Nestle had a number of food processing plants in Scandinavia.
Their central support system had to deal with a number of queries every day. When Nestle decided to invest in an intranet,
they quickly realized the savings. McGovern says the savings from the reduction in query calls was substantially greater than
the investment in the intranet.
• Web publishing allows cumbersome corporate knowledge to be maintained and easily accessed throughout the company
using hypermedia and Web technologies. Examples include: employee manuals, benefits documents, company policies,
business standards, news feeds, and even training, can be accessed using common Internet standards (Acrobat files, Flash

6. files, CGI applications). Because each business unit can update the online copy of a document, the most recent version is
usually available to employees using the intranet.
• Business operations and management: Intranets are also being used as a platform for developing and deploying applications
to support business operations and decisions across the internetworked enterprise.
• Cost-effective: Users can view information and data via web-browser rather than maintaining physical documents such as
procedure manuals, internal phone list and requisition forms. This can potentially save the business money on printing,
duplicating documents, and the environment as well as document maintenance overhead. For example, Peoplesoft
organization derived significant cost savings by shifting HR processes to the intranet.
• Enhance collaboration: Information is easily accessible by all authorised users, which enables teamwork.
• Cross-platform capability: Standards-compliant web browsers are available for Windows, Mac, and UNIX.
• Built for one audience: Many companies dictate computer specifications which, in turn, may allow Intranet developers to
write applications that only have to work on one browser (no cross-browser compatibility issues). Being able to specifically
address your "viewer" is a great advantage. Since Intranets are user-specific (requiring database/network authentication prior
to access), you know exactly who you are interfacing with and can personalize your Intranet based on role (job title,
department) or individual ("Congratulations Jane, on your 3rd year with our company!").
• Promote common corporate culture: Every user has the ability to view the same information within the Intranet.
• Immediate updates: When dealing with the public in any capacity, laws, specifications, and parameters can change. Intranets
make it possible to provide your audience with "live" changes so they are kept up-to-date, which can limit a company's
liability.
• Supports a distributed computing architecture: The intranet can also be linked to a company’s management information
system, for example a time keeping system.
The Extranet
An extranet is a computer network that allows controlled access from the outside, for specific business or educational purposes. An
extranet can be viewed as an extension of a company's intranet that is extended to users outside the company, usually partners,
vendors, and suppliers. It has also been described as a "state of mind" in which the Internet is perceived as a way to do business with a
selected set of other companies (business-to-business, B2B), in isolation from all other Internet users. In contrast, business-to-
consumer (B2C) models involve known servers of one or more companies, communicating with previously unknown consumer users.
An extranet is like a DMZ in that it provides access to needed services for channel partners, without granting access to an
organization's entire network.
An extranet can be understood as an intranet mapped onto the public Internet or some other transmission system not accessible to the
general public, but managed by more than one company's administrator(s). For example, military networks of different security levels
may map onto a common military radio transmission system that never connects to the Internet. Any private network mapped onto a
public one is a virtual private network (VPN), often using special security protocols.
Advantages
• Exchange large volumes of data using Electronic Data Interchange (EDI)
• Share product catalogs exclusively with trade partners
• Collaborate with other companies on joint development efforts
• Jointly develop and use training programs with other companies
• Provide or access services provided by one company to a group of other companies, such as an online banking application managed
by one company on behalf of affiliated banks
Disadvantages
• Extranets can be expensive to implement and maintain within an organization (e.g., hardware, software, employee training costs), if
hosted internally rather than by an application service provider.
• Security of extranets can be a concern when hosting valuable or proprietary information.
MODEL FOR E-COMMERCE TRANSACTIONS
E-commerce transactions can be modeled by identifying the partners directly involved in the transaction. This is the most convenient
and useful way of building models for e-com transactions. Some significant models are as follows:
Business-to-Business e-Commerce (B2B)
It is companies buying from and selling to each other online. But there's more to it than purchasing. It's evolved to encompass supply
chain management as more companies outsource parts of their supply chain to their trading partners. Business- to- business commerce
includes a broad range of intercompany transactions, including wholesale trade as well as company purchases of services, resources,
technology, manufactured parts and components, and capital equipment. It also includes some types of financial transactions between
companies, such as insurance, commercial credit, bonds, securities and other financial assets. The popular phrase B2B e-commerce
refers to the substitution of computer data processing and Internet communications for labor services in the production of economic
transactions. Many companies engaged in B2B ecommerce are intermediaries between other companies that buy and sell goods and
services. Examples:

7. • Intel selling microprocessor to Dell.
• Heinz selling ketchup to McDonalds.
Expectations about productivity gains from B2B e-commerce can be usefully divided into f our areas: possible efficiencies from
automation of transactions, potential economic advantages of new market intermediaries, consolidation of demand and supply through
organized exchanges, and changes in the extent of vertical integration of companies.
Cost Efficiencies from Automation of Transactions
During the transaction, e-commerce can reduce the cost of communicating with counter parts in other companies regarding transaction
details. Transactions over computer networks avoid many of the associated costs of inter personal economic exchange, including the
costs of travel, time spent on communication, physical space for meetings, and processing paper documents. After the transaction,
electronic commerce allows companies to lower costs of communication, to monitor contractual performance, or to confirm delivery.
Economic Efficiency Gains from Intermediation in B2B E-Commerce
Intermediaries can reduce transaction costs relative to direct exchange, by reducing the costs of search, certifying product quality,
mitigating communication costs, and providing guarantees for buyer or seller commitments. Many business-to-business companies
hope to create additional intermediation services. Many B2B companies propose to design innovative procurement transactions
between a company and its many suppliers. Other firms are setting up markets that can provide novel types of transactions that
aggregate supply and demand.
Web-based B-to-B includes:
• Direct selling and support to business (as in the case of Cisco where customer companies can buy and also get technical support,
downloads, patches online).
• E-procurement (also known as industry portals) where a purchasing agent can shop for supplies from vendors, request proposals,
and, in some cases, bid to make a purchase at a desired price. For example the auto-parts wholesaler (reliableautomotive.com); and the
chemical B-to-B exchange (chemconnect.com).
• Information sites provide information about a particular industry for its companies and their employees. These include specialised
search sites and trade and industry standards organisation sites. E.g. newmarketmakers.com is a leading portal for B-to-B news.
Business-to-consumer (B-to-C)
It is defined as the exchange of products, information or services between business and consumers in a retailing relationship. Some of
the first examples of B-to-C e-commerce were amazon.com and dell.com in the USA and lastminute.com in the UK. In this case, the
‘C’ represents either consumer or customer. The B2C model involves transactions between business organizations and consumers. It
applies to any business organization that sells its products or services to consumers over the Internet. These sites display product
information in an online catalog and store it in a database. The B2C model also includes services online banking, travel services, and
health information.
It involves customers gathering information; purchasing physical goods (i.e., tangibles such as books or consumer products) or
information goods (or goods of electronic material or digitized content, such as software, or e-books); and, for information goods,
receiving products over an electronic network. The major benefits of B2C are as follows:
 B2C e-commerce reduces transactions costs.
 Model the cost of the product is reduced as we can eliminate the middle men.
 Major thing in B2c model is customer care.
Pre-Cautions of B2C E-commerce:
 Check for digital certificates of the site and it hacker free.
 Check for shipping price.
 See the previous service going through the reviews of the old customers
 Purchasing with the appropriate cards.
Business-to-Government (B-to-G)
It is the exchange of information, services and products between business organisations and government agencies on-line. It refers to
the use of the Internet for public procurement, licensing procedures, and other government-related operations. This may include:
• E-procurement services, in which businesses learn about the purchasing needs of agencies and provide services.
• A virtual workplace in which a business and a government agency could coordinate the work on a contracted project by
collaborating on-line to coordinate on-line meetings, review plans and manage progress.
• Rental of on-line applications and databases designed especially for use by government agencies.
This kind of e-commerce has two features: first, the public sector assumes a pilot/leading role in
establishing e-commerce; and second, it is assumed that the public sector has the greatest need for making its procurement system
more effective. Web-based purchasing policies increase the transparency of the procurement process and reduce the risk of

8. irregularities. To date, however, the size of the B2G ecommerce market as a component of total e-commerce is insignificant, as
government e-procurement systems remain undeveloped.
Consumer-to-Consumer (C-to-C)
In this category consumers interact directly with other consumers. C2C is simply commerce between private individuals or consumers.
They exchange information such as:
• Expert knowledge where one person asks a question about anything and gets an e-mail reply from the community of other
individuals, as in the case of the New York Times-affiliated abuzz.com website.
• Opinions about companies and products, for example epinions.com.
There is also an exchange of goods between people both with consumer auction sites such as e-bay and with more novel bartering sites
such as swapitshop.com, where individuals swap goods with each other without the exchange of money. This type of e-commerce is
characterized by the growth of electronic marketplaces and online auctions, particularly in vertical industries where firms/businesses
can bid for what they want from among multiple suppliers.
This type of e-commerce comes in at least three forms:
 Auctions facilitated at a portal, such as eBay, which allows online real-time bidding on items being sold in the Web.
 Peer-to-peer systems, such as the Napster model (a protocol for sharing files between users used by chat forums similar to IRC) and
other file exchange and later money exchange models.
 Classified ads at portal sites such as Excite Classifieds and eWanted (an interactive, online marketplace where buyers and sellers can
negotiate and which features “Buyer Leads & Want Ads”).
Consumer-to-Government (C2G) model
In this model, an individual consumer interacts with the government. For example, a consumer can pay his income tax or house tax
online. The transactions involved in this case are C2G transactions. Examples where consumers provide services to government have
yet to be implemented. It is not that popular approach and is quite rare. A possible example could be when a hacker is offering his
services to the government for defence against cyber terrorism.
Consumer-to-Business (C-to-B)
This is the exchange of products, information or services from individuals to business. A classic example of this would be individuals
selling their services to businesses. Consumer-to-business (C2B) transactions involve reverse auctions, which empower the consumer
to drive transactions. An example is when an expert is contracted or hired for a short span by a corporation for some special services
like when Sabeer Bhatia of India sold his hotmail to Microsoft Corporation Private Limited. He became a billionaire overnight with
that contract.
This kind of economic relationship is qualified as an inverted business model. The advent of the C2B scheme is due to major changes:
• Connecting a large group of people to a bidirectional network has made this sort of commercial relationship possible. The
large traditional media outlets are one direction relationship whereas the internet is bidirectional one.
• Decreased cost of technology: Individuals now have access to technologies that were once only available to large companies
(digital printing and acquisition technology, high performance computer, powerful software).
Online Advertising sites like Google Adsense, affiliation platforms like Commission Junction and affiliation programs
like Amazon are the best examples of C2B schemes. Individuals can display advertising banners, contextual text ads or any other
promotional items on their personal websites. Individuals are directly commissioned to provide an advertising/selling service to
companies.
Online surveys (GozingSurveys, Surveyscout, and Survey Monkey) are also typical C2B models. Individuals offer the service to reply
to the company’s survey and companies pay individual for this service. Blogs have paved the way for news C2B and C2C applications
by giving the opportunity and tools to anyone to express themselves easily and to communicate inexpensively.
E-Government
E-Government (short for electronic government, also known as e-gov, digital government, online government, or connected
government) is digital interactions between a government and citizens (G2C), government and businesses/Commerce (G2B),
government and employees, and also between government and governments /agencies (G2G). Essentially, the e-Government delivery
models can be briefly summed up as:
• G2C (Government to Citizens)
• G2B (Government to Businesses)
• G2E (Government to Employees)
• G2G (Government to Governments)
This digital interaction consists of governance, information and communication technology (ICT), business process re-engineering
(BPR), and e-citizen at all levels of government (city, state/province, national, and international). E-Government' (or Digital
Government) is defined as ‘The employment of the Internet and the world-wide-web for delivering government information and
services to the citizens. 'Electronic Government' (or in short 'e-Government') essentially refers to ‘The utilization of IT, ICTs, and
other web-based telecommunication technologies to improve and/or enhance on the efficiency and effectiveness of service delivery in
the public sector’.

9. E-government describes the use of technologies to facilitate the operation of government and the disbursement of government
information and services. E-government, short for electronic government, deals heavily with Internet and non-internet applications to
aid in governments. E-government includes the use of electronics in government as large-scale as the use of telephones and fax
machines, as well as surveillance systems, tracking systems such as RFID tags, and even the use of television and radios to provide
government-related information and services to the citizens.
Disadvantages of e-gov
The main disadvantages concerning e-government is the lack of equality in public access to the internet, reliability of information on
the web, and hidden agendas of government groups that could influence and bias public opinions, impacts on economic, social, and
political factors, vulnerability to cyber attacks, and disturbances to the status quo in these areas.
• Hyper-surveillance - Once e-government begins to develop and become more sophisticated, citizens will be forced to interact
electronically with the government on a larger scale. This could potentially lead to a lack of privacy for civilians as their government
obtains more and more information on them.
• Cost - Although “a prodigious amount of money has been spent” on the development and implementation of e-government, some
say it has yielded only a mediocre product.
• Digital divide - An e-government site that provides web access and support often does not offer the “potential to reach many users
including those who live in remote areas, are homebound, have low literacy levels, exist on poverty line incomes”. It is the division
between people having or not having communication technology.
• False sense of transparency and accountability - Opponents of e-government argue that online governmental transparency is
dubious because it is maintained by the governments themselves. Information can be added or removed from the public eye.
Advantages of e-gov
E-government allows for government transparency. Government transparency is important because it allows the public to be informed
about what the government is working on as well as the policies they are trying to implement. E-government helps simplify processes
and makes access to government information more easily accessible for public sector agencies and citizens. For example, the Indiana
Bureau of Motor Vehicles simplified the process of certifying driver records to be admitted in county court proceedings. The
anticipated benefits of e-government include efficiency, improved services, better accessibility of public services, and more
transparency and accountability.
• E-democracy - One goal of e-government will be greater citizen participation. Through the internet, people from all over the
country can interact with politicians or public servants and make their voices heard. Blogging and interactive surveys will allow
politicians or public servants to see the views of the people they represent on any given issue. Chat rooms can place citizens in real-
time contact with elected officials, their offices or provide them with the means to replace them by interacting directly with public
servants, allowing voters to have a direct impact and influence in their government.
• Paperless office - Proponents of e-government argue that online government services would lessen the need for hard copy forms.
• Speed, efficiency & convenience - E-government allows citizens to interact with computers to achieve objectives at any time and
any location, and eliminates the necessity for physical travel to government agents sitting behind desks and windows.
• e-participation - Recent trials of e-government have been met with acceptance and eagerness from the public. Citizens participate in
online discussions of political issues with increasing frequency, and young people, who traditionally display minimal interest in
government affairs, are drawn to e-voting procedures.
Government-to-Government (G2G) model
This model involves transactions between 2 governments. For example, if the American government wants to by oil from the Arabian
government, the transaction involved are categorized in the G2G model. It may also be defined as the electronic transactions between
two governments within a nation like centre & state govt. or state & state govt. It is mainly about information sharing, not commerce
in most of the occasions.
• Vertical Govt. Integration – e-commerce among govt. agencies up and down and local levels. Example: County Councils – dealing
with the Dept. of the Environment.
• Horizontal Govt. Integration – e-commerce among agencies within one level. Example: National Roads Authority dealing with the
Heritage council.
Government-to-Consumer (G2C) model
In this model, the government transacts with an individual consumer. For example, a government can enforce laws pertaining to tax
payments on individual consumers over the Internet by using the G2C model.
• Does not fit well at all within the traditional supply-and-demand e-commerce notion.
• Paying taxes, registering vehicles, grant applications, CAO applications, etc.
• Big drive to get all local government services on web.

10. Government-to-Business (G2B) model
This model involves transactions between a government and business organizations. For example, the government plans to build a fly
over. For this, the government requests for tenders from various contractors. Government can do this over the Internet by using the
G2B model.
• Not a large e-commerce market.
• Example – Govt selling research services through Universities and Institutes of Technology to SMEs (Small and Medium sized
Enterprises).
• Holding auctions and selling off used / confiscated items (most times, you must be a “business” to participate in these auctions).
• Ordinance Survey selling detailed survey data to businesses.
Business-to-Government (B2G) model
In this model, the business houses transact with the government over the Internet. For example, similar to an individual consumer,
business houses can also pay their taxes on the Internet.
• Lockheed Martin providing aviation products, satellites, naval systems, and services to US Dept of Defence (80% of its revenue).
• Fairly large e-commerce model in terms of revenue.
• Most U.S. government entities (for sure at the federal level) won’t do business with your business if you can’t do it electronically.
• In Europe – governments use e-tenders to get companies to supply goods and services.
• Part of govt. policies worldwide to automate the procurement of goods and services – cut costs.
M-commerce
Mobile commerce is the buying and selling of goods and services through wireless technology-i.e. handheld devices such as cellular
telephones and personal digital assistants (PDAs). Mobile Commerce is any transaction, involving the transfer of ownership or rights
to use goods and services, which is initiated and/or completed by using mobile access to computer-mediated networks with the help of
an electronic device.
 Mobile Ticketing – Tickets can be sent to mobile phones using a variety of technologies. Users are then able to use their tickets
immediately, by presenting their phones at the venue. Tickets can be booked and cancelled on the mobile device with the help of
simple application downloads, or by accessing the WAP portals of various travel agents or direct service providers. Example: People
getting movie tickets or getting boarding pass on mobiles.
 Mobile vouchers, coupons and loyalty cards - Mobile ticketing technology can also be used for the distribution of vouchers, coupons,
and loyalty cards. These items are represented by a virtual token that is sent to the mobile phone. A customer presenting a mobile
phone with one of these tokens at the point of sale receives the same benefits as if they had the traditional token. Stores may send
coupons to customers using location-based services to determine when the customer is nearby.
 Information Services – Example: Commuters getting PNR inquiry on mobiles by doing sms on 139. Another example is getting tram
arrival time on their mobile through sms. Examples of it are News, Stock quotes, sport scores, financial records, traffic reporting, etc.
 Mobile Banking – Banks and other financial institutions use mobile commerce to allow their customers to access account information
and make transactions, such as purchasing stocks, remitting money. This service is often referred to as Mobile Banking, or M-
Banking. Example: Account holders getting sms after every transaction from their banks on their mobile.
 Content purchase and delivery - Currently, mobile content purchase and delivery mainly consists of the sale of ring-tones, wallpapers,
and games for mobile phones. The convergence of mobile phones, portable audio players, and video players into a single device is
increasing the purchase and delivery of full-length music tracks and video. The download speeds available with 4G networks make it
possible to buy a movie on a mobile device in a couple of seconds.
 Mobile marketing and advertising - mobile marketing refers to marketing sent to mobile devices. Companies have reported that they
see better response from mobile marketing campaigns than from traditional campaigns. Mobile campaigns must be based on the global
Content Generationor what is called Generation C and four other 'C's: Creativity, Casual Collapse, Control, and Celebrity.
 Mobile Purchase - Catalog merchants can accept orders from customers electronically, via the customer's mobile device. In some cases,
the merchant may even deliver the catalog electronically, rather than mailing a paper catalog to the customer. Some merchants provide
mobile websites that are customized for the smaller screen and limited user interface of a mobile device.
ONLINE COMMERCE SOLUTIONS
In recent years, the number of online stores has exploded, making the Internet a very crowded – and competitive – marketplace.
Ecommerce websites are connecting businesses with customers in an unprecedented fashion. Chances are, you already know how
important it is to establish an online business, but aren't quite sure how to get started. Whether you're feeling the peer pressure to join
the burgeoning online arena, or you're simply excited by the prospect of a new business channel, there are five ecommerce solutions
for online stores that you should consider before you start.
 Domain Name - All online stores must have a unique web address, which makes registering a domain name an important ecommerce
solution. When you buy a domain name, you become the sole owner of that web address and your online business has a place to call
home. Your personal information will also be provided to the WHOIS database, where it will be available to the public. You can keep
this information private by electing Private Registration when you register your domain name.

11.  Ecommerce Shopping Cart Software - Ecommerce shopping cart software encompasses many aspects of online stores, including setting
up inventory, managing orders from customers, delivery of products, and customer service. Choosing an ecommerce solution is a
difficult process - many different options exist, including open source, licensed, and hosted solutions. Determine which ecommerce
solution is right for your business, instead of allowing the solution to determine your business model.
 Ecommerce Web Hosting- Professional Web hosting for online stores is an ecommerce solution that offers several benefits. When you
work with a web hosting company, you can choose an ecommerce Web hosting package that satisfies your individual needs for space,
bandwidth, merchandising and even design. Another benefit a Web hosting company should provide online stores: peace of mind that
comes from knowing customer support is available to assist you 24/7, should problems or questions arise regarding your online store.
 Professional Web Design - Looks may not be everything, but they are definitely something to consider when starting online stores.
Ecommerce websites can be created with easy-to-use web design templates or with the help of a professional web designer. Either
way, the rules for this ecommerce solution are the same: keep it simple and avoid overuse of flash and graphics. If you choose to hire
a professional, make sure they are focused on the user experience as well, instead of just the look of your new site.
 Merchant Account - No matter how impressive your site is in terms of design and usability, you may lose customers if you cannot
accept credit card payments. Online stores that cannot process credit card transactions are fighting an uphill battle, as the vast majority
of online shoppers favor credit card payments. In order to accept credit card payments online, ecommerce websites need a merchant
account to take money from the bank, and an online gateway to take the money from the merchant account.
Ecommerce websites continue to solidify their standing as a smart choice for business owners and customers alike. If you're ready to
start selling online, keep the five ecommerce solutions for online stores in mind as you plan for this exciting new venture. Also, don't
forget about the importance of having an SSL certificate if you are accepting payments online. SSL certificates give your customers
confidence that you are protecting their sensitive information and encourage them to complete their transactions. Some of the E-
Commerce solutions include:
 Online Payment Gateway integration like Citibank, Verisign, PayPal, WorldPay, etc
 Shipping Gateway integration like FedEx, DHL, UPS, etc
 Inventory Management
 Online Shopping carts
 Customer Order Tracking systems
 Mobile Commerce
 Secure Transactions
 Tailor made payment gateways
 Auctioning and Online Shop portals
Online Payment Gateway Integration
A payment gateway is an e-commerce application service provider service that authorizes payments for e-businesses, online retailers,
bricks and clicks, or traditional brick and mortar. It is the equivalent of a physical point of sale terminal located in most retail outlets.
Payment gateways protect credit card details by encrypting sensitive information, such as credit card numbers, to ensure that
information is passed securely between the customer and the merchant and also between merchant and the payment processor.
Payment Gateway is a part of an e-commerce service that empowers the payment mode for electronic-business. Payment Gateway
encrypts confidential information that transfers in a safe path between a customer and the respective merchant. A payment gateway
holds a soul of any e-commerce application. Some famous payment gateways are: PayPal, Google Checkout, Pay-Me-Now, iBill, etc.
Example: WorldPay (formerly RBS WorldPay) is a payment processing company. It provides payment services for mail order and
internet retailers, as well as point of sale transactions. Customers are a mix of multinational, multichannel retailers, with the majority
being small business merchants. WorldPay started as an electronic payment provider called Streamline in 1989 in the UK but has
extended into Mail Order/Telephone Order, "unattended" payments and handling secure payments over the internet through merger
and acquisition of several other companies.
Example: iPay provides integration with backend applications and eliminates the need for manual posting of transactions to each of
the departmental applications. iPay improves the speed of processing of payments at the cashier reducing the line-ups at the counters.
It automates the municipal payment processing to a large degree and improves the staff productivity while providing 24 x 7
conveniences to citizens.
Shipping Gateway Integration
Shipping gateway integration includes organizations that are responsible for shipping. Example: FedEx Corporation originally known
as FDX Corporation, is a logistics services company, based in the United States with headquarters in Memphis, Tennessee. The name
"FedEx" is a syllabic abbreviation of the name of the company's original air division, Federal Express, which was used from 1973
until 2000.
DHL Express is a division of Deutsche Post providing international express mail services. Originally founded in 1969 to deliver
documents between San Francisco and Honolulu, the company expanded its service throughout the world by the late 1970s. The
company was primarily interested in offshore and inter-continental deliveries, but the success of FedEx prompted their own intra-US
expansion starting in 1983. DHL aggressively expanded to countries that could not be served by any other delivery service, including
the Eastern Bloc, Vietnam and the People's Republic of China.
Inventory Management

12. Inventory means a list compiled for some formal purpose, such as the details of an estate going to probate, or the contents of a house
let furnished. Inventory management is primarily about specifying the shape and percentage of stocked goods. It is required at
different locations within a facility or within many locations of a supply network to proceed the regular and planned course of
production and stock of materials.
The scope of inventory management concerns the fine lines between replenishment lead time, carrying costs of inventory, asset
management, inventory forecasting, inventory valuation, inventory visibility, future inventory price forecasting, physical inventory,
available physical space for inventory, quality management, replenishment, returns and defective goods and demand forecasting.
Balancing these competing requirements leads to optimal inventory levels, which is an on-going process as the business needs shift
and react to the wider environment.
Inventory management involves a retailer seeking to acquire and maintain a proper merchandise assortment while ordering, shipping,
handling, and related costs are kept in check. It also involves systems and processes that identify inventory requirements, set targets,
provide replenishment techniques, report actual and projected inventory status and handles all functions related to the tracking and
management of material. This would include the monitoring of material moved into and out of stockroom locations and the
reconciling of the inventory balances. Also may include ABC analysis, lot tracking, cycle counting support etc. Management of the
inventories, with the primary objective of determining/controlling stock levels within the physical distribution function to balance the
need for product availability against the need for minimizing stock holding and handling costs.
Online Shopping carts
Shopping cart software is software used in e-commerce to assist people making purchases online, analogous to the American English
term 'shopping cart'. In British English it is generally known as a shopping basket, almost exclusively shortened on websites to
'basket'. The software allows online shopping customers to accumulate a list of items for purchase, described metaphorically as
"placing items in the shopping cart". Upon checkout, the software typically calculates a total for the order, including shipping and
handling (i.e. postage and packing) charges and the associated taxes, as applicable.
Online shopping carts refer to the facility provided by the e-com websites to purchase and add multiple items at the same time. Here,
the customer just needs to pick and add items that he/she want to buy into the online shopping cart by just a click of mouse. It is
similar to the shopping carts in shopping malls.
Shopping cart software can be generally categorized into two main categories:
• Licensed software: The software is downloaded and then installed on a Web server. This is most often associated with a one-time
fee, although there are many free products available as well. The main advantages of this option are that the merchant owns a license
and therefore can host it on any Web server that meets the server requirements, and that the source code can often be accessed and
edited to customize the application.
• Hosted service: The software is never downloaded, but rather is provided by a hosted service provider and is generally paid for on a
monthly/annual basis; also known as the application service provider (ASP) software model. Some of these services also charge a
percentage of sales in addition to the monthly fee. This model often has predefined templates that a user can choose from to customize
their look and feel. Predefined templates limit how much users can modify or customize the software with the advantage of having the
vendor continuously keep the software up to date for security patches as well as adding new features.
Customer Order Tracking systems
Order Tracking Software is build to improve customer service levels making management of inquiries / orders more easy and reliable.
With Order Tracking Software you can track your inquiries / orders online. You can easily search old orders and get the latest updated
status on it.
Features of Order Tracking Software are:
Easy management of daily inquiries /orders
Up-to-date information on each and every inquiry
User friendly Graphical User Interface
Search any inquiry anytime and from anywhere
Find old inquiries in milliseconds
Reminder scheduler helps remember follow ups
No paperwork involved
Restricted number of intended users like User, Management and Administrator
Secured login and password for every user
Different features for different users
Follow up conversations can be logged
E-mail notifications
No additional software required

13. Faster access to information online
Tailor Made Payment Gateway
A payment gateway is an e-commerce application service provider service that authorizes payments for e-businesses, online retailers,
bricks and clicks, or traditional brick and mortar. It is the equivalent of a physical point of sale terminal located in most retail outlets.
Payment gateways protect credit card details by encrypting sensitive information, such as credit card numbers, to ensure that
information is passed securely between the customer and the merchant and also between merchant and the payment processor. Some
organizations offer tailor made payment gateways designed according to customer needs. This customization is helpful in product
acceptance and popularity by users.
Security features of payment gateways:
• Since the customer is usually required to enter personal details, the entire communication of 'Submit Order' page (i.e. customer -
payment gateway) is often carried out through HTTPS protocol.
• To validate the request of the payment page result, signed request is often used - which is the result of the hash function in which
the parameters of an application confirmed by a «secret word», known only to the merchant and payment gateway.
• To validate the request of the payment page result, sometimes IP of the requesting server has to be verified.
• There is a growing support by acquirers, issuers and subsequently by payment gateways for Virtual Payer Authentication (VPA),
implemented as 3-D Secure protocol - branded as Verified by VISA, MasterCard SecureCode and J/Secure by JCB, which adds
additional layer of security for online payments. 3-D Secure promises to alleviate some of the problems facing online merchants, like
the inherent distance between the seller and the buyer, and the inability of the first to easily confirm the identity of the second.
Secure Transactions
Secure Electronic Transaction (SET) was a standard protocol for securing credit card transactions over insecure networks, specifically,
the Internet. Secure Electronic Transactions (SET) is an open protocol which has the potential to emerge as a dominant force in the
securing of electronic transactions. Jointly developed by Visa and MasterCard, in conjunction with leading computer vendors such as
IBM, SET is an open standard for protecting the privacy, and ensuring the authenticity, of electronic transactions. This is critical to the
success of electronic commerce over the Internet; without privacy, consumer protection cannot be guaranteed, and without
authentication, neither the merchant nor the consumer can be sure that valid transactions are being made.
SET was not itself a payment system, but rather a set of security protocols and formats that enable users to employ the existing credit
card payment infrastructure on an open network in a secure fashion. However, it failed to gain traction. VISA now promotes the 3-D
secure scheme. Secure Electronic Transactions (SET) relies on the science of cryptography – the art of encoding and decoding
messages.
Key features to meet the business requirements, SET incorporates the following features:
• Confidentiality of information
• Integrity of data
• Cardholder account authentication
• Merchant authentication
Auctioning and Online Shop portals
Online Auctions portal is your portal to online auctions. Would you like to shop for better price on millions of products? From laptops
at Computer Auctions, books at Antiques Auctions, new software for your computer at software Auctions, gemstones for you
girlfriend at Jewelry Auctions and much more. Millions of similar products are auctioned at online auctions everyday.
The most popular auctioning and online shop portal is e-bay. Other top 6 places to sell online are as follows:
• Overstock - Why it’s good: Big traffic numbers and a Verified Registered User policy that has prevented fraud from Day 1 (are you
listening eBay?). Fees are value for money and the site fosters a tight community. We also liked the fact that payment options are
more varied. Goodbye Paypal tyranny! Google Checkout and O-Auctions Checkout are two of the additional options available here.
Interestingly, jewelry sells especially well on Overstock. The bad news? This gem is only available to US residents, although a UK
version is set to be released sometime soon.
• eBid - eBid has consistently kept its place as one of the top alternatives to eBay since its launch in 1999. Available in 14 countries,
traffic does vary between sites, but in general, traffic is high and continuing to go up. The biggest attraction for eBid sellers is the no
listing fees policy. This makes a huge difference to your profit margins so you simply don’t need to sell as much as on eBay to get the
same return. Other cool features include the ability to open up to 5 eBid stores at once(great for sellers in several different niches),
and the ability to list using barcodes and prefilled information for books, DVDs, CDs and video games, which makes for super-quick
bulk listing.
• BlueJay - BlueJay is extremely popular with sellers and buyers for very good reason. It’s 100% free and submits all listings to
Google shopping, from which the majority of buyers come. It’s well designed and very user-friendly, coming complete with free
online stores for all sellers.

14. • eCrater - We had difficulty deciding who was better out of BlueJay and eCrater. BlueJay won because of its superior design,
however we strongly encourage you to try both. Like BlueJay, eCrater is also free and submits to Google Shopping. Although the
design leaves a bit to be desired, many sellers swear they get more sales from eCrater than any other auction site because of its great
placement in Google searches.
• Online Auction - Online Auction has one low monthly fee with no listing or final value fees. However, as part of the latest site
upgrade, sellers can page $10 to get their auctions “featured” on Google shopping. In general, liquidation items and low-end stuff
seems to sell better here than high-end designer items.
• CQOut - CQOut is very big in the UK and saw it’s listings grow by 100% in 2007. CQOut’s fees are significantly lower than eBay
and if you don’t make a sale, you don’t need to pay anything. Where the site falls down in our opinion is in the lack of community and
the somewhat harsh feedback policy of ‘3 strikes and you’re out’. Ouch!

15. Unit-4
Online Analysis and Processing (OLAP)
In computing, online analytical processing, or OLAP is an approach to swiftly answer multi-dimensional analytical (MDA) queries.
OLAP is part of the broader category of business intelligence, which also encompasses relational reporting and data mining. Typical
applications of OLAP include business reporting for sales, marketing, management reporting, business process management (BPM),
budgeting and forecasting, financial reporting and similar areas, with new applications coming up, such as agriculture. The term
OLAP was created as a slight modification of the traditional database term OLTP (Online Transaction Processing).
OLAP tools enable users to interactively analyze multidimensional data from multiple perspectives. OLAP consists of three basic
analytical operations: consolidation, drill-down, and slicing and dicing. Consolidation involves the aggregation of data that can be
accumulated and computed in one or more dimensions. For example, all sales offices are rolled up to the sales department or sales
division to anticipate sales trends. In contrast, the drill-down is a technique that allows users to navigate through the details. For
instance, users can access to the sales by individual products that make up a region’s sales. Slicing and dicing is a feature whereby
users can take out (slicing) a specific set of data of the cube and view (dicing) the slices from different viewpoints.
Databases configured for OLAP use a multidimensional data model, allowing for complex analytical and ad-hoc queries with a rapid
execution time. They borrow aspects of navigational databases, hierarchical databases and relational databases.
The core of any OLAP system is an OLAP cube (also called a 'multidimensional cube' or a hypercube). It consists of numeric facts
called measures which are categorized by dimensions. The cube metadata is typically created from a star schema or snowflake
schema of tables in a relational database. Measures are derived from the records in the fact table and dimensions are derived from
the dimension tables.
Each measure can be thought of as having a set of labels, or meta-data associated with it. A dimension is what describes these
labels; it provides information about the measure. A simple example would be a cube that contains a store's sales as a measure, and
Date/Time as a dimension. Each Sale has a Date/Time label that describes more about that sale.
Any number of dimensions can be added to the structure such as Store, Cashier, or Customer by adding a foreign key column to the
fact table. This allows an analyst to view the measures along any combination of the dimensions.
Multidimensional databases - Multidimensional structure is defined as “a variation of the relational model that uses
multidimensional structures to organize data and express the relationships between data”. The structure is broken into cubes and
the cubes are able to store and access data within the confines of each cube. “Each cell within a multidimensional structure contains
aggregated data related to elements along each of its dimensions”. Even when data is manipulated it remains easy to access and
continues to constitute a compact database format. The data still remains interrelated. Multidimensional structure is quite popular
for analytical databases that use online analytical processing (OLAP) applications. Analytical databases use these databases because
of their ability to deliver answers to complex business queries swiftly. Data can be viewed from different angles, which gives a
broader perspective of a problem unlike other models.
Aggregations - It has been claimed that for complex queries OLAP cubes can produce an answer in around 0.1% of the time required
for the same query on OLTP relational data. The most important mechanism in OLAP which allows it to achieve such performance is
the use of aggregations. Aggregations are built from the fact table by changing the granularity on specific dimensions and
aggregating up data along these dimensions. The number of possible aggregations is determined by every possible combination of
dimension granularities.
The combination of all possible aggregations and the base data contains the answers to every query which can be answered from
the data.
Because usually there are many aggregations that can be calculated, often only a predetermined number are fully calculated; the
remainder is solved on demand. The problem of deciding which aggregations (views) to calculate is known as the view selection
problem. View selection can be constrained by the total size of the selected set of aggregations, the time to update them from
changes in the base data, or both. The objective of view selection is typically to minimize the average time to answer OLAP queries,
although some studies also minimize the update time. View selection is NP-Complete. Many approaches to the problem have been
explored, including greedy algorithms, randomized search, genetic algorithms and A* search algorithm.
Types of OLAP -OLAP systems have been traditionally categorized using the following taxonomy.
• MOLAP - MOLAP is the 'classic' form of OLAP and is sometimes referred to as just OLAP. MOLAP stores this data in optimized
multi-dimensional array storage, rather than in a relational database. Therefore it requires the pre-computation and storage of
information in the cube - the operation known as processing.

16. • Relational - ROLAP works directly with relational databases. The base data and the dimension tables are stored as relational tables
and new tables are created to hold the aggregated information. Depends on a specialized schema design. This methodology relies on
manipulating the data stored in the relational database to give the appearance of traditional OLAP's slicing and dicing functionality.
In essence, each action of slicing and dicing is equivalent to adding a "WHERE" clause in the SQL statement.
• Hybrid - There is no clear agreement across the industry as to what constitutes "Hybrid OLAP", except that a database will divide
data between relational and specialized storage. For example, for some vendors, a HOLAP database will use relational tables to hold
the larger quantities of detailed data, and use specialized storage for at least some aspects of the smaller quantities of more-
aggregate or less-detailed data.
Comparison of OLAP types: Each type has certain benefits, although there is disagreement about the specifics of the benefits
between providers. These are:-
• Some MOLAP implementations are prone to database explosion, a phenomenon causing vast amounts of storage space to be used
by MOLAP databases when certain common conditions are met: high number of dimensions, pre-calculated results and sparse
multidimensional data.
• MOLAP generally delivers better performance due to specialized indexing and storage optimizations. MOLAP also needs less
storage space compared to ROLAP because the specialized storage typically includes compression techniques.
• ROLAP is generally more scalable. However, large volume pre-processing is difficult to implement efficiently so it is frequently
skipped. ROLAP query performance can therefore suffer tremendously.
• Since ROLAP relies more on the database to perform calculations, it has more limitations in the specialized functions it can use.
• HOLAP encompasses a range of solutions that attempt to mix the best of ROLAP and MOLAP. It can generally pre-process swiftly,
scale well, and offer good function support.

17. Managing Information Systems (MIS)
A management information system (MIS) provides information needed to manage organizations efficiently and effectively.
Management information systems involve three primary resources: technology, information, and, most important, people.
Management information systems are distinct from regular information systems in that they are used to analyze operational
activities in the organization. Academically, the term is commonly used to refer to the group of information management methods
tied to the automation or support of human decision making, e.g. decision support systems, expert systems, and executive
information systems.
For centuries, information management system was not given much attention and this has led to the liquidation of many
organizations. However, awareness of information technology in the present age has made information system more accessible,
thus integrating organizational structures for the achievement of goals and objectives in within a relatively short period. The
emergence of the new technology science of electronic data processing has provided the impetus for study into the development of
management information and a new approach in the study of control, feedback system and communication.
The introduction of electronic technology into the information management has made the information system more
effective and efficient. But that is not to conclude that all organizations or managers have effective managerial capability to manage
information system. It is evident that as organizations expand, the problem associated with data collection, recording, information
retrieval and effective communication increase in proportion to the size of the organization. These are major areas where
organizations or managers have to be more effective in managing information as this may have nothing to do with the number of
technology acquired or money invested.
Early business computers were used for simple operations such as tracking sales or payroll data, with little detail or structure. Over
time, these computer applications became more complex, hardware storage capacities grew, and technologies improved for
connecting previously isolated applications. As more and more data was stored and linked, managers sought greater detail as well as
greater abstraction with the aim of creating entire management reports from the raw, stored data. The term "MIS" arose to describe
such applications providing managers with information about sales, inventories, and other data that would help in managing the
enterprise. Today, the term is used broadly in a number of contexts and includes (but is not limited to): decision support systems,
resource and people management applications, enterprise resource planning (ERP), enterprise performance management (EPM),
supply chain management (SCM), customer relationship management (CRM), project management and database retrieval
applications.
The successful MIS supports a business's long range plans, providing reports based upon performance analysis in areas
critical to those plans, with feedback loops that allow for titivation of every aspect of the enterprise, including recruitment and
training regimens. MIS not only indicate how things are going, but why and where performance is failing to meet the plan. These
reports include near-real-time performance of cost centers and projects with detail sufficient for individual accountability.
Decision Support System (DSS)
A Decision Support System (DSS) is a collection of integrated software applications and hardware that form the backbone of an
organization’s decision making process. Companies across all industries rely on decision support tools, techniques, and models to
help them assess and resolve everyday business questions. The decision support system is data-driven, as the entire process feeds
off of the collection and availability of data to analyze. Business Intelligence (BI) reporting tools, processes, and methodologies are
key components to any decision support system and provide end users with rich reporting, monitoring, and data analysis.
High-level Decision Support System Requirements:
 Data collection from multiple sources (sales data, inventory data, supplier data, market research data. etc.)
 Data formatting and collation
 A suitable database location and format built for decision support -based reporting and analysis
 Robust tools and applications to report, monitor, and analyze the data
Decision support systems have become critical and ubiquitous across all types of business. In today’s global marketplace, it is
imperative that companies respond quickly to market changes. Companies with comprehensive decision support systems have a
significant competitive advantage.
Decision Support Systems delivered by MicroStrategy Business Intelligence - Business Intelligence (BI) reporting tools, processes,
and methodologies are key components to any decision support system and provide end users with rich reporting, monitoring, and
data analysis. MicroStrategy provides companies with a unified reporting, analytical, and monitoring platform that forms the core of
any Decision Support System. The software exemplifies all of the important characteristics of an ideal Decision Support System:
 Supports individual and group decision making: MicroStrategy provides a single platform that allows all users to access the same
information and access the same version of truth, while providing autonomy to individual users and development groups to design
reporting content locally.
 Easy to Develop and Deploy: MicroStrategy delivers an interactive, scalable platform for rapidly developing and deploying projects.
Multiple projects can be created within a single shared metadata. Within each project, development teams create a wide variety of

18. re-usable metadata objects. As decision support system deployment expands within an organization, the MicroStrategy platform
effortlessly supports an increasing concurrent user base.
 Comprehensive Data Access: MicroStrategy software allows users to access data from different sources concurrently, leaving
organizations the freedom to choose the data warehouse that best suits their unique requirements and preferences.
 Integrated software: MicroStrategy’s integrated platform enables administrators and IT professionals to develop data models,
perform sophisticated analysis, generate analytical reports, and deliver these reports to end users via different channels (Web,
email, file, print and mobile devices). This eliminates the need for companies to spend countless effort purchasing and integrating
disparate software products in an attempt to deliver a consistent user experience.
 Flexibility: MicroStrategy SDK (Software Development Kit) exposes its vast functionality through an extensive library of APIs.
MicroStrategy customers can choose to leverage the power of the software’s flexible APIs to design and deploy solutions tailored to
their unique business needs.
Three fundamental components of a DSS architecture are:
 Database (or knowledge base),
 The model (i.e., the decision context and user criteria), and
 User interface.
The users themselves are also important components of the architecture.
Development Frameworks - DSS systems are not entirely different from other systems and require a structured approach. Such a
framework includes people, technology, and the development approach.
DSS technology levels (of hardware and software) may include:
 The actual application that will be used by the user. This is the part of the application that allows the decision maker to make
decisions in a particular problem area. The user can act upon that particular problem.
 Generator contains Hardware/software environment that allows people to easily develop specific DSS applications. This level makes
use of case tools or systems such as Crystal, AIMMS, and iThink.
 Tools include lower level hardware/software. DSS generators including special languages, function libraries and linking modules
An iterative developmental approach allows for the DSS to be changed and redesigned at various intervals. Once the system is
designed, it will need to be tested and revised for the desired outcome.
Executive Information System (EIS)
An executive information system (EIS) is a type of management information system intended to facilitate and support the
information and decision-making needs of senior executives by providing easy access to both internal and external information
relevant to meeting the strategic goals of the organization. It is commonly considered as a specialized form of decision support
system (DSS).
The emphasis of EIS is on graphical displays and easy-to-use user interfaces. They offer strong reporting and drill-down capabilities.
In general, EIS are enterprise-wide DSS that help top-level executives analyze, compare, and highlight trends in important variables
so that they can monitor performance and identify opportunities and problems. EIS and data warehousing technologies are
converging in the marketplace.
Executive Information Systems (EIS) provide high level views of an organisation by aggregating data from various sources
from within the organisation and also external sources. Ad hoc enquiries provide performance data and trend analysis for top level
management. Ease of use is an important feature so that enquiries can be made without a detailed knowledge of the underlying
data structures. Graphical interfaces (GUI) make it possible to request reports and queries without resorting to programming.
The knowledge bases for EIS are:
 Executive Information Systems tools (DWIC) - These tools provide extremely easy to use means to query and analyze certain
information. Generally they are designed for the user who needs to 'get at' the data but wants to spend little time understanding
how to use the tool. The EIS tools let system developers puts business context around diverse information.
 The Use of Executive Information Systems in Sweden (Björn Thodenius) - This paper describes research done in the field of Executive
Information Systems (EIS) or Executive Support Systems. The main reasons for implementing EIS were: a need for more rapid
reporting, a need for better availability of information and a need for more consistent and standardized information.
In recent years, the term EIS has lost popularity in favor of business intelligence (with the sub areas of reporting, analytics, and
digital dashboards, v.gr. MicroStrategy).
Just-in-Time Manufacturing (JIT)
`Just-in-time' is a management philosophy and not a technique.
It originally referred to the production of goods to meet customer demand exactly, in time, quality and quantity, whether the
`customer' is the final purchaser of the product or another process further along the production line.
It has now come to mean producing with minimum waste. "Waste" is taken in its most general sense and includes time and
resources as well as materials. Elements of JIT include:
 Continuous improvement:-
• Attacking fundamental problems - anything that does not add value to the product.

19. • Devising systems to identify problems.
• Striving for simplicity - simpler systems may be easier to understand, easier to manage and less likely to go wrong.
• A product oriented layout - produces less time spent moving of materials and parts.
• Quality control at source - each worker is responsible for the quality of their own output.
• Poka-yoke - `foolproof' tools, methods, jigs etc. prevent mistakes
• Preventative maintenance, Total productive maintenance - ensuring machinery and equipment functions perfectly when it
is required, and continually improving it.
 Eliminating waste. There are seven types of waste:
• waste from overproduction.
• waste of waiting time.
• transportation waste.
• processing waste.
• inventory waste.
• waste of motion.
• waste from product defects.
 Good housekeeping - workplace cleanliness and organisation.
 Set-up time reduction - increases flexibility and allows smaller batches. Ideal batch size is 1item. Multi-process handling - a multi-
skilled workforce has greater productivity, flexibility and job satisfaction.
 Levelled / mixed production - to smooth the flow of products through the factory.
 Kanbans - simple tools to `pull' products and components through the process.
 Jidoka (Autonomation) - providing machines with the autonomous capability to use judgement, so workers can do more useful things
than standing watching them work.
 Andon (trouble lights) - to signal problems to initiate corrective action.
JIT - Background and History
JIT is a Japanese management philosophy which has been applied in practice since the early 1970s in many Japanese manufacturing
organisations. It was first developed and perfected within the Toyota manufacturing plants by Taiichi Ohno as a means of meeting
consumer demands with minimum delays . Taiichi Ohno is frequently referred to as the father of JIT.
Toyota was able to meet the increasing challenges for survival through an approach that focused on people, plants and
systems. Toyota realised that JIT would only be successful if every individual within the organisation was involved and committed to
it, if the plant and processes were arranged for maximum output and efficiency, and if quality and production programs were
scheduled to meet demands exactly.
JIT manufacturing has the capacity, when properly adapted to the organisation, to strengthen the organisation's
competitiveness in the marketplace substantially by reducing wastes and improving product quality and efficiency of production.
There are strong cultural aspects associated with the emergence of JIT in Japan. The Japanese work ethic involves the
following concepts.
• Workers are highly motivated to seek constant improvement upon that which already exists. Although high standards are
currently being met, there exist even higher standards to achieve.
• Companies focus on group effort which involves the combining of talents and sharing knowledge, problem-solving skills,
ideas and the achievement of a common goal.
• Work itself takes precedence over leisure. It is not unusual for a Japanese employee to work 14-hour days.
• Employees tend to remain with one company throughout the course of their career span. This allows the opportunity for
them to hone their skills and abilities at a constant rate while offering numerous benefits to the company.
These benefits manifest themselves in employee loyalty, low turnover costs and fulfillment of company goals.
Information and Communications Technology
Information and communications technology or information and communication technology, usually abbreviated as ICT, is often
used as an extended synonym for information technology (IT), but is usually a more general term that stresses the role of unified
communications and the integration of telecommunications(telephone lines and wireless signals), computers, middleware as well as
necessary software, storage- and audio-visual systems, which enable users to create, access, store, transmit, and manipulate
information. In other words, ICT consists of IT as well as telecommunication, broadcast media, all types of audio and video
processing and transmission and network based control and monitoring functions. The expression was first used in 1997 in a report
by Dennis Stevenson to the UK government and promoted by the new National Curriculum documents for the UK in 2000.
The term ICT is now also used to refer to the merging (convergence) of audio-visual and telephone networks with computer
networks through a single cabling or link system. There are large economic incentives (huge cost savings due to elimination of the
telephone network) to merge the audio-visual, building management and telephone network with the computer network system

20. using a single unified system of cabling, signal distribution and management. This in turn has spurred the growth of organizations
with the term ICT in their names to indicate their specialization in the process of merging the different network systems.
Some of the dangers of ICTs include cyberbullying, phishing as well as masquerading.
Trends and new concepts in the ICT roadmap - ICT is often used in the context of "ICT roadmap" to indicate the path that an
organization will take with their ICT needs.
• Cloud computing - In an increasingly interconnected world, the interactions among devices, systems, and people are
growing rapidly. Businesses need to meet the demands of their employees and customers to allow for greater access to
systems and information. All of these communications needs must be delivered in a unified way. By offering a scalable
infrastructure, cloud computing models enable companies to work smarter through more agile and cost-effective access to
technology and information. This unified platform reduces costs and boosts productivity across a business and beyond. Part
of an information and communications technology roadmap should involve consolidating infrastructures, while providing
added benefits to users in collaboration, messaging, calendaring, instant messaging, audio, video, and Web conferencing.
Cloud computing is driving more efficient IT consumption and delivery and taking ICT to the next level.
• Standards - Standards are very important for ICT, since they define the language that enables the technologies to
understand each other. This is especially relevant because the key idea behind ICT is that information storage devices can
communicate in media-frictionless manner with communication networks and computing systems. Open standards play a
special role, as well as standard institutes such as ETSI in Europe.
• Campaigns and Projects - Recently, Many Companies are coming up with Campaigns to promote ICT and how it can be used
to benefit the nature....Wipro was a leading company who organized Earthian, wherein students came up with ideas to use
technology to benefit humans.it is very important in every field.