E-commerce involves the exchange of goods and services using electronic means like the internet. It requires a product, a website to display and sell the product, marketing to drive traffic to the site, an ordering system to accept orders, a payment system like credit cards, fulfillment to ship products, support for returns and issues. The main product categories sold online include computers, books, music, financial services, and more. E-commerce provides advantages like access to worldwide markets but also challenges like no personal contact and costs of infrastructure. Setting up an online store requires elements like promotion, an online catalog, purchase and payment systems, delivery, and customer support.

1. E-COMMERCE
Introduction :
Commerce is, quite simply, the exchange of goods and services, usually for money.
We see commerce all around us in in millions of different forms. When you buy something at a grocery
store you are participating in commerce. In the same way, if you cart half of your possessions onto your
front lawn for a yard sale, you are participating in commerce from a different angle. If you go to work
each day for a company that produces a product, that is yet another link in the chain of commerce.
When you think about commerce in these different ways, you instinctively recognize several different
roles:
• Buyers - these are people with money who want to purchase a good or service.
• Sellers - these are the people who offer goods and services to buyers. Sellers are
generally recognized in two different forms: retailers who sell directly to consumers and
wholesalers or distributors who sell to retailers and other businesses.
• Producers - these are the people who create the products and services that sellers offer
to buyers. A producer is always, by necessity, a seller as well. The producer sells the
products produced to wholesalers, retailers or directly to the consumer
In an e-commerce sales channel you find all of the elements of commerce as well, but they change
slightly. You must have the following elements to conduct e-commerce:
• A product
• A place to sell the product - in the e-commerce case a web site displays the products in
some way and acts as the place
• A way to get people to come to your web site
• A way to accept orders - normally an on-line form of some sort.
• A way to accept money - normally a merchant account handling credit card payments.
This piece requires a secure ordering page and a connection to a bank. Or you may use
more traditional billing techniques either on-line or through the mail.
• A fulfillment facility to ship products to customers (often outsource-able). In the case of
software and information, however, fulfillment can occur over the Web through a file
download mechanism.
• A way to accept returns
• A way to handle warrantee claims
• A way to provide customer service (often through email, on-line forms, on-line
knowledge bases and FAQs, etc.)
In addition, there is often a strong desire to integrate other business functions or practices into the e-
commerce offering. An extremely simple example -- you might want to be able to show the customer the
exact status of an order.

2. The biggest product categories include:
• Computer products (hardware, software, accessories)
• Books
• Music
• Financial Services
• Entertainment
• Home Electronics
• Apparel
• Gifts and flowers
• Travel services
• Toys
• Tickets
• Information
EDI
Short for Electronic Data Interchange, the transfer of data between different companies using
networks, such as the Internet. As more and more companies get connected to the Internet, EDI is
becoming increasingly important as an easy mechanism for companies to buy, sell, and trade
information. EDI refers to the electronic exchange of business information between two companies
using a specific and structured format. The concept has been around since the 1970s and has
traditionally been used to automate buyer-seller transactions such as invoices and purchase orders. But
as more processes within a company become automated, EDI has expanded to areas such as inventory
management and product distribution.
How does EDI work?
EDI relies on standards, or common methods of defining classes of business data, which allow
computers to recognize what data belongs to what department in a company. In the early days of EDI,
many companies built in-house EDI standards, but as interest grew, industries started to agree on
common standards, administered by standards organizations. These standards, which allow computers
in different organizations to share information over privately built, closed networks known as value-
added networks, led to the use of EDI for corporate purchasing.
E-Commerce
E-commerce is a subset of business, where products and services are advertised, bought and sold over
the Internet. Many businesses have become extremely profitable through online sales. Dell Computers
is a prime example. Small companies and even individuals can also market their products or services on
a worldwide basis through eCommerce. Large companies can reduce sales and stocking costs by selling
online.

3. Comparison with traditional commerce
Online commerce provides an additional method for buying or selling.
Traditional sales
In traditional sales, the buyer and/or the salesman is the active party. In one case, the buyer initiates the
purchase by either going to the store to buy or calling on the phone and making an order.
In another situation, the salesman goes to the home or place of business to make the sale, or he calls on
the phone to make the sale.
A third method combines action from both parties. The business' sales department mails a catalog or
other material, and the customer then makes a purchase from the catalog. These methods all apply to
business-to-person as well as business-to-business sales.
Online commerce
Online commerce adds a new method, similar to a mail order catalog.
The business' sales department posts a Web site with an online catalog. The buyer then selects items
from the online catalog and makes the purchase, either online or by phoning or mail order.
Although the buyer is really using an online catalog, the metaphor of browsing a store with a shopping
cart is most often used in eCommerce. This allows the customer to put items in the shopping cart to
hold until checkout or when the purchase is finally made.
Advantages and disadvantages of eCommerce
There are advantages and disadvantages for both the seller and buyer in online commerce
Seller
Advantages for the seller include:
= Access to worldwide markets
= Minimal sales costs
= Can compete with larger companies
= Can track purchases and use data to recommend other items to the customer
Disadvantages to the seller include:
= No personal contact
= Expense of getting popular-servers, etc.
= Must get people to know about and visit the site
Buyer
Advantages for the buyer include:
= Can find hard-to-get items from his or her chair
= Reduced cost
= Automated cost-comparison available
Disadvantages for the buyer include:
= Must pay for shipping and wait for delivery
= Cannot see or feel the product before making a decision
= Cannot easily return item or get support

4. Elements of eCommerce
Just as in tradition commerce, especially that done by mail order, there are certain elements required to
perform online business.
You must:
= Promote your Web site presence
= Have an online catalog or store
= Have the capability to receive payments
= Be able to deliver the item
= Provide after-the-sale support
Web site promotion
You need to advertise and promote your business, so that the customers will either come to your store,
read your catalog or view your Web site.
Online catalog or store
You need to have a store or catalog where customers can view and select goods or services. Customers
need to be able to easily get around your catalog to find things. The customer should be able to easily
browse the selection and mark products for later purchase. They also need to be able to get detail
information or see pictures of the items.
Finding items
The Web site should be easy for customers to find what they want. The customer must know what is in
the store, and the products must be organized in a logical manner.
The customer must be able to easily search for what he or she wants without the help of a sales clerk.
Selecting what to buy
Once the customer finds what he is looking for, he can put the selection in a "shopping cart" and search
for other items. This make it easier for the customer to purchase multiple items, as well as to buy things
he may not have been looking for.
Just as in a physical store, people often buy things they just happen to see. For example, stores place
some "impulse items" at the checkout stand.
Purchase
It should be easy for customers to purchase the items they want. You must have a way to receive online
payments, either using credit cards or other means of payment. For example, business-to-business sales
may simply involve a purchase order.
The purchase of the item can be complex, but it should be made as simple as possible for the customer.
1. The customer must give certain information about himself. Usually this is name, address and e-
mail
2. A mutually acceptable payment method must be chosen. Credit card or billing information must
be gathered.
3. The merchant must process the customer's payment information.
4. Finally, the customer must receive confirmation of the sale.

5. Security is a concern in credit card purchases and the ability to encrypt transfer of data is equally
important.
Delivery
You must have a good means of fulfilling the order and delivering the material to customers. Different
means of delivery depends on the type of item purchased.
The product may be access to special information on the Web site, it may be downloadable software, or
it may be items that must be physically delivered to the customer.
Support
The customer needs a way to voice problems. You also need a customer service system, consisting of
support to handle complaints or returns in the event of problems.
Setting up an online store
You can purchase one of the various ready-made software applications that set up your online business.
The problem there is the lack of ability to customize the application.
You can also have a Web programmer develop such a store. You may not get as sophisticated site, and it
may cost more in the long run if you start to re-invent the wheel.
The best bet is to look at both possibilities and pick a solution that is in-between.
E-COMMERCE MODELS
B2B(business-to-business)
On the Internet, B2B (business-to-business), also known as e-biz, is the exchange of products, services,
or information between businesses rather than between businesses and consumers.
Its 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.
B2B Web sites can be sorted into:
Company Web sites, since the target audience for many company Web sites is other companies and
their employees. Company sites can be thought of as round-the-clock mini-trade exhibits. Sometimes a
company Web site serves as the entrance to an exclusive extranet available only to customers or
registered site users. Some company Web sites sell directly from the site, effectively e-tailing to other
businesses.
Product supply and procurement exchanges, where a company purchasing agent can shop for supplies
from vendors, request proposals, and, in some cases, bid to make a purchase at a desired price.
Sometimes referred to as e-procurement sites, some serve a range of industries and others focus on a
niche market.
Specialized or vertical industry portals which provide a "SubWeb" of information, product listings,
discussion groups, and other features. These vertical portal sites have a broader purpose than the
procurement sites (although they may also support buying and selling).

6. Brokering sites, that act as an intermediary between someone wanting a product or service and
potential providers. Equipment leasing is an example.
Information sites (sometimes known as infomediary), which provide information about a particular
industry for its companies and their employees. These include specialized search sites and trade and
industry standards organization sites.
Many B2B sites may seem to fall into more than one of these groups. Models for B2B sites are still
evolving.
Benefits of B2B :
B2B e-commerce can save or make your company money.
Some ways companies have benefited from B2B ecommerce include:
• Managing inventory more efficiently
• Adjusting more quickly to customer demand
• Getting products to market faster
• Cutting the cost of paperwork
• Reigning in rogue purchases
• Obtaining lower prices on some supplies
B2B exchange :
At its most basic, a B2B exchange (also called a marketplace or hub) is a website where many companies
can buy from and sell to each other using a common technology platform.
Many exchanges also offer additional services, such as payment or logistics services that help members
complete a transaction.
Exchanges may also support community activities, like distributing industry news, sponsoring online
discussions and providing research on customer demand or industry forecasts for components and raw
materials.
Which business units should be involved in a B2B project?
Definitely the units that do purchasing. B2B e-commerce can drastically change how buyers do their
jobs, especially if your company is one that still places orders the old fashioned way.
Sales and customer service departments will need to be involved with projects that affect how you
receive and process orders from customers. And don't forget inventory. You may need to get other
departments involved, too, depending on the functionality you're building.
Also involve your suppliers, distributors and customers, and make sure there's something in the project
for them. B2B e-commerce doesn't only change how you do business internally, your partners have to
change too. And unless you're the 900-pound gorilla in your industry-and sometimes even if you are-you
can't force everyone to do things your way.
B2C (business-to-customer)
What is B2C e-commerce?
While the term e-commerce refers to all online transactions, B2C stands for "business-to-consumer"
and applies to any business or organization that sells its products or services to consumers over the
Internet for their own use.

7. Business-to-consumer, meaning that the primary focus is toward consumers not other businesses, even
though a B2C company may sell to resellers or other business as a small portion of their revenue.
Retailers are typically B2C companies while manufacturers and wholesalers are typically B2B companies.
When most people think of B2C e-commerce, they think of Amazon.com, the online bookseller that
launched its site in 1995 and quickly took on the nation's major retailers. However, in addition to online
retailers, B2C has grown to include services such as online banking, travel services, online auctions,
health information and real estate sites.
What is the difference between B2C and B2B e-commerce?
For one thing, the customers are different — B2B (business-to-business) customers are other companies
while B2C customers are individuals. Overall, B2B transactions are more complex and have higher
security needs.
Beyond that, there are two big distinctions:
Negotiation
Selling to another business involves haggling over prices, delivery and product specifications. Not so with
most consumer sales. That makes it easier for retailers to put a catalog online, and it's why the first B2B
applications were for buying finished goods or commodities that are simple to describe and price.
Integration
Retailers don't have to integrate with their customers' systems. Companies selling to other businesses,
however, need to make sure they can communicate without human intervention.
Major challenges of B2C e-commerce?
Getting browsers to buy things — Your e-commerce site cannot live on traffic alone. Getting visitors to
the site is only half the battle. Whether they buy something is what determines if you win. The so-called
conversion rate for B2C e-commerce sites is still fairly low. Some ways to boost your conversion rate
include improving navigation, simplifying checkout process (such as one-step checkout and easily
replaced passwords), and sending out e-mails with special offers.
Building customer loyalty : With so many sites out there, how can you build a strong relationship with
customers?
Here are some tips:
• Focus on personalization: A wide array of software packages are available to help e-
commerce sites create unique boutiques that target specific customers. For example,
American Airlines has personalized its website so that business fliers view it as a
business airline and leisure travelers see it as a vacation site.
• Create an easy-to-use customer service application. Providing just an e-mail address can
be frustrating to customers with questions. Live chat or, at the very least, a phone
number will help.
• Focus on making your site easy to use.

8. Fulfillment — E-commerce has increased the focus on customer satisfaction and delivery fulfillment.
One cautionary tale is Toys "R" Us' holiday debacle in 1999, when fulfillment problems caused some
Christmas orders to de delivered late. Since then, companies have spent billions to improve their
logistical systems in order to guarantee on-time delivery.
Providing instant gratification for customers still isn't easy, but successful B2C e-commerce operations
are finding that fulfillment headaches can be eased with increased focus and investment in supply chain
and logistical technologies.
C2C (customer-to-customer)
Person-to-person transactions are the oldest form of e-business. They’ve been there from the
beginning, long before there was any widespread use of the internet. They continue to be all over the
place, quite invisible to anyone thinking that all business is on a website. They can (in part) be supported
on large and visible websites. As in the case of the so called "auctions" that have been growing fast all
over the place – but they are only one of many ways of helping people to deal directly with each other
or to buy more conveniently from companies.
C2C (Consumer to Consumer) E-Commerce allows unknown, un-trusted parties to sell goods and
services to one-another.
An excellent example of this is found at EBay, where consumers sell their goods and services to other
consumers. To accommodate this activity, several technologies have emerged. Firstly, Ebay allows all
sellers and buyers to rate one another. In this manner, future prospective purchasers may see that a
particular seller has sold to more than 2,000 customers - all of whom rate the seller as excellent. In
another example, a prospective purchaser may see a seller who has previously sold only 4 times and all
4 rate the seller poorly. This type of information is helpful.
Another technology that has emerged to support C2C activities is that of the payment intermediary. Pay
Pal is a good example of this. Instead of purchasing items directly from an unknown, un-trusted seller,
the buyer can instead send the money to Pay Pal. From there, Pay Pal notifies the seller that they will
hold the money for them until the goods have been shipped and accepted by the buyer.
C2B (customer-to-business)
The most important activity in e-commerce isn’t selling. It’s buying. Quite often that doesn’t mean
buying online but checking, comparing, analyzing quality and price before baying in traditional stores or
services.
Customer empowerment isn’t a legend or a theory, It’s hard fact and it will grow as more people
become more aware of the tools they have to pick and choose – and negotiate. This could be the single
most important development in the new economy. Maybe scaring for some companies, but an
opportunity for all who know how to find the right clues. With or without the internet, in many
businesses the concept of marketing (even of market) will have to change radically. We are only at the
beginning of a development that can have vast and deep consequences.
(The tables come here)

9. Payment Gateway
One of the most important things that you must have in order to accept credit cards for your business is
a payment gateway. A payment gateway is basically the same thing as a physical point of sale terminal in
a retail store.
Payment gateways link the virtual terminal ("buy" page) to the merchant account and the credit card
organization securely. This protects the credit card data and any other personal information from being
exposed to computer hackers.
One good thing about most payment gateways is that they offer a virtual terminal (input information
screen). This is the software that allows the customer to input their credit card information.
Payment gateways offer many different services, some of which include:
• Authenticate credit card or electronic check transactions over the Internet
• Send/receive transactions over the wire using the secure socket layer (usually128-bit encryption
behind a firewall)
• Offers administrative support
• Promises complete privacy for all messages
E-Commerce
Revenue Streams
What is a revenue stream?
• The method a business uses to generate income
• A single Web site may use more than one method of generating revenue
Revenue generated with direct sales :
• You purchase a product or service
• The business arranges delivery
• Sales are made to both consumers and businesses
What is electronic software distribution (ESD)?
Sale of digital products such as software, music, movies, books, and photographs. A purchase entitles
you to download one copy of an item.
How is revenue generated with software rental?
Application service providers (ASPs) charge a rental fee before you can access and use Web application
software. Rental fee arrangements vary by vendor and application.
What is advertisement revenue?
Some Web sites contain advertisements and earn commissions from the advertising sponsors when
visitors make purchases as a result of clicking the advertisement
How is revenue generated with an informational Web site?
• Visitors are required to subscribe to a service.
• Usually provide some information at no cost, but require a subscription to access the
content of the entire site.
What is a Web hosting service?
• Assists people and companies in hosting their Web site.
• Provides the hardware, software, and communications required for a Web server
• Some provide services that include managing payments and tracking inventory

10. What is an online storage service?
• Provides data storage to computer users
• Often used to store backup copies of data and information
How is revenue generated with Internet access?
• Some sites provide Internet access
• Many have become portals offering many other services
E-Retailing
E-retail occurs when retailers use the Web to sell their products and services. Also called e-tail.
The E-Retailing Market Sector
What is an electronic storefront?
• The Web site where an e-retailer displays its products.
• Also called an online catalog.
• Contains descriptions, graphics, and sometimes product reviews.
What is a shopping cart?
• A software component on the Web that allows the customer to collect purchases.
• Items can be added, deleted, or saved for a future visit.
What is a secure checkout?
• Web site where the customer enters personal and financial data.
• The transaction and financial data automatically are verified at a banking Web site.
Other E-Commerce Market Sectors on the Web
Online Banking:
• Allows you to pay bills from your computer
• Transfer money electronically from your account to a payee’s account
• Download monthly banking transactions
Online Trading :
• You can invest in stocks, options, bonds, treasuries, CDs, money markets, annuities, and mutual
funds without using a broker
• Transaction fee usually less than when trading through a broker
Entertainment and media :
• Music, videos, news, sporting events, and 3-D multiplayer games
• News and live radio broadcasting
• Streaming audio
Travel Services :
• Driving directions and maps
• Airline, hotel, and car reservations
Shopping Bot :
• A Web site that searches the Internet for the best price on a product or service in which you are
interested
• Also called a shopbot
Health Services :
• Provide up-to-date medical, fitness, nutrition, or exercise information
• Some maintain databases of doctors and dentists

11. • Pharmacies allow customers to refill prescriptions and ask questions
Building an E-commerce Site
The things you need to keep in mind when thinking about building an e-commerce site include:
• Suppliers - this is no different from the concern that any normal store or mail order
company has. Without good suppliers you cannot offer products.
• Your price point - a big part of e-commerce is the fact that price comparisons are
extremely easy for the consumer. Your price point is important in a transparent market.
• Customer relations - E-commerce offers a variety of different ways to relate to your
customer. E-mail, FAQs, knowledge bases, forums, chat rooms... Integrating these
features into your e-commerce offering helps you differentiate yourself from the
competition.
• The back end: fulfillment, returns, customer service - These processes make or break
any retail establishment. They define, in a big way, your relationship with your
customer.
When you think about e-commerce, you may also want to consider these other desirable capabilities:
• Gift-sending
• Affiliate programs
• Special Discounts
• Repeat buyer programs
• Seasonal or periodic sales
The reason why you want to keep these things in mind is because they are all difficult unless your e-
commerce software supports them. If the software does support them, they are trivial.
Implementing an E-commerce Site
Let's say that you would like to create an e-commerce site. There are three general ways to implement
the site with all sorts of variations in between. The three general ways are:
• Enterprise computing
• Virtual hosting services
• Simplified e-commerce
These are in order of decreasing flexibility and increasing simplicity.
Enterprise computing means that you purchase hardware and software and hire a staff of developers to
create your e-commerce web site. Amazon, Dell and all of the other big players participate in e-
commerce at the enterprise level. You might need to consider enterprise computing solutions if:
• You have immensely high traffic - millions of visitors per month
• You have a large database that holds your catalog of products (especially if the catalog is
changing constantly)
• You have a complicated sales cycle that requires lots of customized forms, pricing tables,
etc.

12. • You have other business processes already in place and you want your e-commerce
offering to integrate into them.
• Virtual hosting services give you some of the flexibility of enterprise computing, but what you
get depends on the vendor. In general the vendor maintains the equipment and software and
sells them in standardized packages. Part of the package includes security, and almost always a
merchant account is also an option. Database access is sometimes a part of the package. You
provide the web designers and developers to create and maintain your site.
• Simplified e-commerce is what most small businesses and individuals are using to get into e-
commerce. In this option the vendor provides a simplified system for creating your store. The
system usually involves a set of forms that you fill out online. The vendor's software then
generates all of the web pages for the store for you. Two good examples of this sort of offering
include Yahoo Stores and Verio Stores.
Creating an Online Store
What decisions should be made to create an online store?
• Building a storefront
• Managing payment
• Managing product delivery
• Designing a site that attracts customers and keeps them returning
• Managing the site
• Promoting the site
Options available for building a storefront :
• E-retailers must select software and hardware to build a storefront
• Can develop and maintain the site in house
• Can outsource all or part of the system
• Often e-retailers hire an expert in Web design and development to assist in implementing a site
E-commerce software :
• Allows a merchant to set up a storefront with a product database, combined with a shopping
cart
• Should provide a secure environment to process order transactions
• Some include statistical tracking features and capability of integrating with a business' other
systems
Web host :
• An outside company that provides the hardware, software, and communications required for a
Web server
• Charges a monthly fee or a percentage of the sales income
• Web server also called an e-commerce server or commerce server
Secure server :
• Prevents access to the system by unauthorized users
• Often used for transaction services where credit card information is entered
Web site development service :
• Assists in the process of creating a storefront

13. • Allows small businesses and individuals to participate in the e-commerce arena with a minimum
investment
Steps in accepting customer payments using a credit card
Obtain a merchant account
• Establishes a relationship between the e-retailer and a bank
• Allows the e-retailer to accept credit card payments
Provide a secure order form
• Used to collect orders and credit card information from the customer
Use a payment-processing service
• Provides software to manage the transaction between the e-retailer and the bank
Fulfillment & Customer Satisfaction
Fulfillment :
• Managing and storing inventory
• Packaging and shipping products
• Maintaining records of all transactions
As a result of e-retail for delivery services traditional delivery services such as Federal Express and
UPS will have increased business due to e-retail sales.
Fulfillment companies
• Outsourcing services that provide warehousing and inventory management, product
assembly, order processing, packing, shipping, return processing,and online reporting
• also called logistics companies.
CUSTOMER SATISFACTION:
What factors lead to customer loyalty?
• Successful sites attract customers and keep them returning to the site
• Te best storefronts plan for convenience, are efficient, and easy to use
• Customers who must wait more than eight to ten seconds for a page to download usually will
click to another site
Electronic Customer Relationship Management(eCRM)?
• Used to provide service after a sale
• Combines a personalized touch and customized service to customers
• Uses automatic e-mail to confirm orders, display a list of frequently asked questions (FAQ), and
send surveys for feedback.
E-mail publishing :
• The process of sending newsletters via e-mail messages to a large group of people with similar
interests
• Can be used as follow up after a sale to generate return business and recommendations
Site management :
• Monitoring Web site use
• Collecting data and using it to improve the Web site
Submission service :

14. • A Web-based business in which you typically pay a fee to register with hundreds of search
engines
Online advertising :
• Often called banner ads
• Advertisements are linked to the advertiser's Web site
• Advertiser usually pays based on the number of click-throughs
Occurs when a visitor clicks an advertisement to move to the advertiser’s Web page
Spam :
• Unsolicited e-mail messages or newsgroup postings
• Internet junk mail
• Usually generates antagonism instead of sales
E-governance
Governance refers to the exercise of political, economic and administrative authority in the
management of a country’s affairs, including citizens’ articulation of their interests and exercise of their
legal rights and obligations.
A Definition of eGovernance
E-Governance advocates often mean electronic delivery of government services; paying fees and fines,
ordering services, finding information, submitting tenders, applications, permits and licenses.
E-Governance may include very broad range of services for almost all segments of society.
The most common areas of E-Governance applications are:
• Electronic commerce and business regulations
• Taxation and revenue
• Law enforcement and courts
• Digital democracy
• Agriculture
• Education
• Health
• Transport
Government transactions:
G2C: Government to Citizen Interface.
This involves Governance processes involving significant citizen interface. For example, Utility bill
payment, Issue of driving license, Birth/Death registration, Property Tax etc
G2B: Government to Business Transactions.
This involves interactions between Government & Business. For example, E-Procurement, E-payments,
Company Registrations, Trade Licenses/Permits etc.
G2G: Government to Government.
This involves Internal Government processes (intra and inter-departmental). For example, Workflow
Automations of internal Administrative functions (Employee Information System, accounting, payroll
etc), Project Monitoring, Repository of Parliament Questions & Answers etc.
Significant benefits from E-Governance

15. • The citizen benefits because there is transparency, efficiency and integrity in his dealings with
the government; furthermore, there is easy information access.
• The government benefits because it reduces redundancy and duplication. The processes of data
collection, analysis and audit are made much easier. Decision making gets expedited. And there
can be tremendous improvements in specialized areas such as criminal justice, transport etc.
• The business community benefits because E-Governance can become a catalyst and a channel
for e-business, and in fact it has been so in places like the US, UK, Canada, Australia and
Singapore. Furthermore a web-based government will enable tax paying online and
reduce corruption and bending of laws.
Benefits of Electronic Governance
e-Governance sees the people in government, business and citizens working together for the benefit of
all. Some of its obvious benefits are:
Integrated Information:
e-Governance targets to use a government-wide electronic information infrastructure to simplify service
delivery, reduce duplication, and improve the level and speed of service to clients at a lower cost. It
recommends creating, managing, and prudently sharing information electronically among the various
government departments and the different services offered by them. That is, information will be
captured once, as close to the source as possible, then shared and re-used by all authorized users. This
will avoid manual transcription and re-entering of the same information repeatedly whenever a citizen
goes to a new government department for some services.
Integrated Services:
The integrated information approach automatically lends itself to offering integrated services. Different
types of services offered by different government departments like collecting taxes, granting licenses,
administering regulations, paying grants and benefits, can be availed at one place. This greatly facilitates
the citizens by allowing them to perceive the government as a single body to interact with instead of a
number of unrelated entities, operating at different locations in different government buildings.
Anywhere Services:
Provision of fully interactive on-line services by e-Governance gives public access to government services
with quicker responses at convenient times. This on-line accessibility of stored information from remote
locations allows government officials to serve any citizen from a government office located in any part
of the state or country.
Anywhere, Anytime Information:
Delivery of services may require interaction between government officials and citizens, but delivery of
public-domain information to citizens can be done without any such interaction. Citizens can obtain
information related to government processes and procedures through an on-line system without
interacting with any government official. In fact, e-Governance can give the average citizen quick,
interactive access to a vast array of information, through computers at home or work or through kiosks
in convenient public locations, because this access to information can be available at many different
locations and at all hours, there is no pressure on individuals to physically visit a Government Office.
Improved Overall Productivity:

16. e-Governance will significantly contribute to improved overall productivity of both the government
officials and the citizens, as it ensures faster interaction among them by electronic mail instead of
moving paper files and letters, and in streamlining the workflow of internal government administrative
processes such as procurement, recruitment, evaluation, budgeting, planning. On the other hand,
improved productivity of citizens results because of the facility of anytime, anywhere services and
information.
Better Decision Making and Planning:
The integrated information base of e-Governance helps planners and decision makers to perform
extensive analysis of stored data to provide answers to the queries of the administrative cadre. This
facilitates taking well informed policy decisions for citizen facilitation and accessing their impact over
the intended section of the population. This in turn helps them to formulate more effective strategies
and policies for citizen facilitation.
Better Security and Protection of Information:
e-Governance uses the integrated information approach for keeping all information at one place in
electronic form. Thus, keeping the information secure against theft or leakage. Proper backup
mechanisms also help in protecting the valuable information from getting lost due to natural calamities
such as fires, earthquakes, and floods.
E-Governance - Issues and Challenges
Achieving the benefits of e-Governance may not be easy and goes far beyond mere computerization of
government processes. Its successful implementation not only poses technical challenges but also
requires a fundamental change in the manner in which the government operates today.
In fact, the challenges the Governments are likely to face would be, how to cope with re-engineering the
government processes and functions and related issues of new responsibilities for civil servants,
businesses and citizens.
E-Governance - Issues and Challenges…..

17. Creating the Integrated Information Base:
Gathering and integrating information is the first basic requirement of e-Governance. This requires
building of various types of data entry systems that can operate as close as possible to the source of
data and can capture the different types of data to be kept in the integrated information base.
Considerable effort needs to be made to the task of deciding what data to keep, how to capture the
identified data, and how to integrate information from multiple sources to create the integrated
information base.
Even universal, easy-to-use access is of little use if the information is fragmented, contradictory, out-of-
date, poorly indexed, or simply not of interest or use.
Accessing of Information:
To make the best use of data stored in the integrated information base, they should be universally and
easily accessible by the end users. This requires design and installation of easy to operate access devices
such as kiosks, push-button telephones and access terminals at all locations from where access is
desired. This also requires wide-area networking of all these equipment and the integrated information
base. Moreover, essential software that will allow different categories of users to visualize the data in a
form useful and understandable to them will also be required.
Finding the Right Information:
The integrated information base contains all types of data that is of interest to many different types of
users. Hence, quickly finding and accessing a desired piece of information from this large ocean of
information may not be easy for a user. To enable this, the system must have the necessary tools to
properly structure the data and quickly search for the desired information.
Security and Privacy of Information:
While e-Governance allows information to be gathered, stored, and shared more readily than ever
before, it also raises important issues of protecting information from unauthorized changes and
safeguarding personal privacy. Proper user authentication and access control mechanisms need to be
implemented to ensure that only authorized users can access a particular piece of information.
Additionally, encryption techniques will be required to safeguard tampering of information by
unauthorized users when critical information flows on communication channels or networks.
Customer service and service quality evaluation (SERVQUAL)
The SERVQUAL method from Valarie A Zeithami, A.Parasuraman and Leonard L Berry is a technique
that can be used for performing a gap analysis of an organization’s service quality performance against
customer service quality needs.
• Empirically derived method that may be used by a services organization to improve service
quality.
• The method involves the development of an understanding of the perceived service needs of
target customers.
• These measured perceptions of service quality for the organization in question, are then
compared against an organization that is “excellent”.
• The resulting gap analysis may then be used as a driver for service quality improvement.
• Takes into account the perceptions of customers of the relative importance of service
attributes.

18. • This allows an organization to prioritize. And to use its resources to improve the most critical
service attributes.
• The data are collected via surveys of a sample of customers.
• In these surveys, these customers respond to a series of questions based around a number of
key service dimensions.
The methodology was originally based around 5 key dimensions :
1. Tangibles. Appearance of physical facilities, equipment, personnel and communication
materials.
2. Reliability. Ability to perform the promised service dependably and accurately.
3. Responsiveness. Willingness to help customers and provide prompt service.
4. Assurance. Knowledge and courtesy of employees and their ability to convey trust and
confidence.
5. Empathy. The firm provides care and individualized attention to its customers.
This has been adapted later by some to cover 10 dimensions:
1. Tangibles. Appearance of physical facilities, equipment, personnel and communication
materials.
2. Reliability. Ability to perform the promised service dependably and accurately.
3. Responsiveness. Willingness to help customers and provide prompt service.
4. Competence. Possession of required skill and knowledge to perform service.
5. Courtesy. Politeness, respect, consideration and friendliness of contact personnel.
6. Credibility. Trustworthiness, believability, honesty of the service provider.
7. Feel secure. Freedom from danger, risk or doubt.
8. Access. Approachable and easy of contact.
9. Communication. Listens to its customers and acknowledges their comments. Keeps customers
informed. In a language which they can understand.
10. Understanding the customer. Making the effort to know customers and their needs.
ORIGIN OF SERVQUAL HISTORY
The authors conducted a qualitative study, from which they concluded that customers ranked the
importance of two SERVQUAL dimensions consistently. Regardless of service industry.
• Reliability is the most important contributing factor to service quality
• Tangibles is the least important.
USAGE OF SERVQUAL APPLICATIONS
• SERVQUAL is widely used within service industries to understand the perceptions of target
customers regarding their service needs. And to provide a measurement of the service quality of
the organization.
• SERVQUAL may also be applied internally to understand employees’ perceptions of service
quality. With the objective of achieving service improvement.
STEPS IN SERVQUAL PROCESS

19. • The method essentially involves conducting a sample survey of customers so that their
perceived service needs are understood. And for measuring their perceptions of service quality
for the organization in question.
Customers are asked to answer numerous questions within each dimension that determines:
• The relative importance of each attribute.
• A measurement of performance expectations that would relate to an “excellent”
company.
• A measurement of performance for the company in question.
This provides an assessment of the gap between desired and actual performance, together with a
ranking of the importance of service criteria. This allows an organization to focus its resources. To
maximize service quality whilst costs are controlled.
STRENGTHS OF SERVQUAL BENEFITS.
Most users would agree that a comprehensive and thorough examination of service needs and service
quality provides an invaluable approach to improving service quality. SERVQUAL provides detailed
information about :
• Customer perceptions of service (a benchmark established by your own customers)
• Performance levels as perceived by customers
• Customer comments and suggestions
• Impressions from employees with respect to customers expectations and satisfaction.
LIMITATIONS OF SERVQUAL DISADVANTAGES
• There have been a number of studies that doubt the validity of the 5 dimensions. And of the
uniform applicability of the method for all service sectors.
• According to an analysis by Thomas P Van Dyke, Victor R Prybutok and Leon A Kappelman, it
appears that the use of difference scores in calculating SERVQUAL contributes to problems with
the reliability, discriminant validity, convergent validity and predictive validity of the
measurement.
• These findings suggest that caution should be exercised in the use of SERVQUAL scores and that
further work is needed in the development of measures for assessing the quality of information
services.
ASSUMPTIONS OF SERVQUAL CONDITIONS
• The results of market surveys are accurate. The validity of the model is based around the results
of empirical studies. A number of academics have since performed further empirical studies that
appear to contradict some of the original findings.
• Customer needs can be documented and captured, and they remain stable during the whole
process.