This document discusses eCommerce and provides an overview of key topics such as the history and growth of eCommerce, types of eCommerce models, strategies for developing an eCommerce system, required technologies, and methodology considerations. It outlines the core components of an eCommerce architecture including web servers, databases, application servers and integration with backend systems. It also discusses other relevant technologies and factors to consider such as hosting, content management, and payment processing.

1. eCommerce & International
Information Systems
Unit 5
Management Information Systems
CSVTU, Bhilai, Chhattisgarh
(Naren Chintada)

2. Two topics in this Unit
Introduction to E-Commerce
● Business Intelligence
● E-commerce Strategy
● Electronic Data Interchange
● E-commerce Methodology
● E-commerce Technology
● Business Application Of The Internet
● Electronic Business Success
● Strategies
Managing International Information Systems
● IIS Architecture
● Global Business Drivers
● Challenges, Strategy
● Divide, Conquer, Appease, Cooptation,
● Business Organization
● Problems In Implementing Global
Information Systems
● Computer Crime
● Ethics & Social Issues.

3. Introduction to eCommerce
E-commerce refers to the use of the Internet and the Web to transact business. More
formally, e-commerce is about digitally enabled commercial transactions between and
among organizations and individuals. For the most part, this means transactions that
occur over the Internet and the Web. Commercial transactions involve the exchange of
value (e.g., money) across organizational or individual boundaries in return for
products and services.
Electronic commerce draws on technologies such as mobile commerce, electronic
funds transfer, supply chain management, Internet marketing, online transaction
processing ,etc.

4. eCommerce history
● In the year 1995, Netscape (Netscape navigator was the very first internet browser) put up advertisement
from major corporates on websites. This is the beginning of using internet a new medium for sales.
● Following years there was an exponential growth of retail sales on this new medium
● This lead speculation that retail eCommerce as a new technological innovation that has driven
investment markets soaring up in eCommerce technology companies ignoring traditional and proper
valuations of the stocks.
● This lead to ‘bubble like’ growth which got ‘burst’ and became known as ‘dot-com’ bubble. This means
many companies failed to deliver and money went down the drain.
● Notable exceptions were Amazon, eBay, Expedia, Google which thrived with soaring revenues
● By 2006, eCommerce became the fastest growing form of retail trade

5. eCommerce growth
● Primary reasons for the growth of eCommerce are its ubiquity and its global reach. Ubiquity means
unlike traditional physical store, products and services is available anywhere and anytime to order.
Second, the reach of market is entire online world population of more than 2 billion.
● First wave of eCommerce started with books, music and air travel. The breadth of eCommerce offerings
expanded to travel, entertainment, apparels, home furnishings, jewelry, movies, TV, real estate, online bill
payments, software, many more
● Small business and entrepreneurs riding the infrastructures created by industry giants like Amazon,
Google, Apple, Alibaba, etc.
● On technology front, Wi-Fi, 3G/4G/5G smartphones together with powerful smartphones, tablets,
podcasting, streaming laid technology foundation
● Social networking like facebook, twitter, linkedin, instagram, whatsapp became new platforms for
eCommerce, marketing and advertising
● New models of computing such as smartphone apps, cloud computing, software as service (SaaS)
● Online entertainment business like Youtube, Netflix, Prime, and many have made cable TV redundant
and formed new eCommerce models.

6. Types of eCommerce
eCommerce does not only mean retail sales that we are familiar. Three major categories of eCommerce are B2B
(business-to-business), B2C (business to consumer) and C2C (consumer to consumer).
B2B involves sales of goods and services among businesses. This could take a form of website hosted by a
manufacturing company for its registered customers or it can take a form of a marketplace where negotiations,
auctions and whole process purchasing can happen (Indiamart for example)
B2C involves retailing products and services to individual consumers. This is very commonly known category
of eCommerce
C2C involves consumers selling directly to consumers. Examples are eBay, OLX, Craigslist, etc.
For more insight - http://s1.q4cdn.com/199638165/files/doc_financials/Nielsen-Global-E-commerce-Report-August-2014.pdf

7. Internet business models
e-tailer Sells physical products directly to consumers Amazon
Transaction broker They are typically aggregators who make money Expedia, Makemytrip
Market creator Provides platform for buyers and sellers as B2B eBay
Content provider Provide digital content like news, music, photos, etc Yahoo, iTunes,
Gaana, Youtube
Community provider Provide online meeting place for people of similar
interest
Facebook, LinkedIn,
Twitter, Whatsapp
Portal Provides initial point of entry to the Web along with
services (search engines)
Yahoo, Bing, Google
Service provider Provide Web 2.0 applications such as photo sharing,
file sharing, online data storage
Google, Dropbox,
Wetransfer

8. Building an eCommerce system
Building a successful e-commerce presence requires a keen understanding of business,
technology, and social issues, as well as a systematic approach. Today, an e-commerce
presence is not just a corporate Web site, but also include a social network site on
Facebook, a Twitter company feed, and smartphone apps where customers can access
your services.
The two most important management challenges in building a successful e-commerce
presence are:
1. developing a clear understanding of your business objectives
2. knowing how to choose the right technology to achieve those objectives.

9. eCommerce Strategy
The ability to sell online has become a critical part of most business strategies. Before starting online presence
for commerce, business strategy :
1. Identify goals and objectives
2. Mission statement and Value proposition
3. Target the right customers
4. Conduct situational Analysis of current products, distribution network, competition analysis, current
financial condition and external forces.
5. Develop a pricing and product positioning strategy (marketing strategy)
6. Optimize distribution channels for fulfilment plan
7. Create cross channel promotion strategy
8. Explore partnerships
9. Strategy to increase orders & referral strategy
10. Outline financial projections

10. Strategy checklist
1. Business Issues:
a. What will be the business model
b. What kind of resources are needed
c. What will be the demographic focus
d. What expertise is available
e. Taxes
2. Technology Issues:
a. Website Security
b. Payment models
c. Pricing model
d. Shipping & logistics
e. User experience design
f. Channels (mobile, tablet, web)
g. SEO
h. Web Analytics

11. eCommerce system objectives & functionality
Business Objective System Functionality Information Requirements
Display products Product catalog Organized product catalog by categories and images
Product details Product database Part codes, datasheets, description, inventory levels
Transaction Shopping cart & payment Secure payment, multiple options
Customer info Customer database Customer details and online registration
Personalize/customiz
e product
Customer on-site
tracking
Mine data on customer behaviour and use this to
recommend products
Provide after sale
support
Sales database Provide shipment tracking, payment and update order
status to customer
Provide prod/supplier Inventory management Inventory levels, order quantity data by product

12. Business processes involved in eCommerce
● Selling Process:
○ Marketing
○ Transaction processing (Order receipt, Order selection, Billing & payment)
○ Service & Support (Order scheduling, fulfilment delivery, customer service and support)
● Buying Process:
○ Product discovery and product evaluation
○ Terms negotiation, quotation and contract
○ Order placement
○ Order tracking
○ Order payment
○ Product receipt
○ Service

13. USER
Browser
IT Architecture for b2b eCommerce
*RFQ - request for quote
RFQ
*
firewall
Web server farm
DB
server
Application
server
Backend ERP
systemStorage area network
Confirmation

14. eCommerce Technology requirements
As illustrated in the architecture diagram above, a typical eCommerce systems uses
following technologies:
1. Firewall to protect production servers from external malicious client requests
2. Web server or server farm to accept http request and authenticate & authorise
user
3. Database server where orders and requests status is maintained
4. Storage areas network is a network database servers where transactions are logged
5. Interface to backend ERP system where actual manufacturing production
happens
6. Application server where ecommerce application processes and responds to the
user

15. Other peripheral technologies of eCommerce system
In addition the core eCommerce architecture there are several other technologies are
used. To name a few:
1. Email for email campaigns and acknowledgements to the user
2. Content management systems (CMS) where product description and other useful
information in the form of text, images and videos
3. Barcode readers
4. Electronic Data Interchange (EDI)
5. Web Analytics tools
6. Access control and security
7. Payment gateways integration
8. Profiling and personalization tools

16. eCommerce Methodology
There are many choices for building an ecommerce site. Choices range from
outsourcing entire website development to an external vendor or to building
everything in-house. Once built, hosting can again be out-sourced or maintained in-
house.

17. Building in-house
Building from scratch amounts to wasting time and reinventing the wheel. Since it has
many complexities, it will have risk of failure and delay. Instead one can use pre-built
templates to create our own eCommerce website. There are whole platforms available
which provide all the features required eCommerce such as SAP’s Hybris, IBM’s
Commerce server, etc.
Even customizing and building a decent eCommerce website using these platforms is
a considerable exercise that requires highly skilled and motivated team to map the
requirements to build a fully functional eCommerce solution. Since these platforms
are well tested, there will less chances of failure and within reasonable time companies
can Go-Live

18. Hosting decision
Most business choose to outsource hosting and pay. Hosting company is responsible
for ensuring the site is ‘live’ 24 hours and 365 days. The vendor providing the hosting
service may not concern themselves with technical aspects of setting up and
maintaining web server, telecommunication links, etc. The vendor only provides
application management services and enters service level agreement to ensure highest
availability of the system from functional and performance perspective by
continuously monitoring all the servers 24x7 and taking appropriate and timely
actions when incidents take place in order to satisfy SLAs.
These days with PaaS (platform as service), applications can be hosted on cloud
system providers such as Azure or Amazon