The document provides a comprehensive overview of e-commerce, covering its definition, types (B2C, B2B, C2C), and the transaction processing systems that support it. It discusses the benefits and challenges of e-commerce, the implications for buyers and sellers, mobile commerce (m-commerce), and the technological infrastructure required to implement e-commerce systems. Additionally, it highlights security issues, electronic payment systems, and considerations for international markets.

1. E-Commerce
Dr. Kamal Gulati

2. Objectives
• Define e-commerce and understand its role as
a transaction processing system
• List the three types of e-commerce, and
explain how e-commerce supports the stages
of the buying process and methods of
marketing and selling
• Discuss several examples of e-commerce
applications and services
2

3. Objectives
• Define m-commerce, and describe several m-
commerce services
• List the components of an e-commerce
system, and explain how they function
together to provide e-commerce services
3

4. Chapter Content
• The Roots of E-Commerce
• Overview of Electronic Commerce
• E-Commerce Applications
• Mobile Commerce
• E-Commerce Implementation
4

5. Electronic Commerce
• Electronic commerce (e-commerce)
– Systems that support electronically executed
business transactions
– The fundamental purpose of e-commerce is to
execute transactions
5

6. Electronic Commerce
• Electronic commerce (e-commerce)
6

7. Electronic Commerce
7

8. E-Commerce History
• EDI
– Uses private communications networks (VANs) to
transmit standardized transaction data between
business partners and suppliers
• Automating transactions using EDI
– Drastically reduced the amount of paperwork and the
need for human intervention
• Internet
– Provided the ideal platform for conducting EDI
transactions
8

9. E-Commerce History
9

10. Transaction Processing
• Transaction
– An exchange involving goods or services
• Transaction processing system (TPS)
– Information system used to support and record transactions such as
paying for products or paying an employee (e.g. payroll system that calculates
an employee’s pay and cuts a check)
– transaction processing systems share a common set of activities called the transaction
processing cycle
• Batch processing
– Transactions are collected over time and processed together in batches
– useful in situations where transactions take place away from the computer
system
• Online transaction processing
– Takes place at the point of sale
– critical to time-sensitive transactions such as selling concert tickets and making flight
reservations
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11. The Transaction Processing Cycle
• Data collection
– The process of capturing transaction related data
• Data editing
– Checking the validity of data entered
• Data correction
– Implemented if an error is found in the entered
data
11

12. The Transaction Processing Cycle
• Data manipulation
– Processing transaction data
• Data storage
– Altering databases to reflect the transaction
• Data output
– Receipts, picking lists, and other documents
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13. The Transaction Processing Cycle
13

14. Different Transaction Processing for Different
Needs
• Order processing system
– Supports the sales of goods or services to
customers
– Arranges for shipment of products
• Purchasing system
– Supports the purchase of goods and raw materials
from suppliers
14

15. Different Transaction Processing for Different
Needs
15

16. Types of E-Commerce
• Business-to-consumer e-commerce (B2C)
– Connects individual consumers with sellers , cutting
out the middleman
– E.g. Amazon.com
• Business-to-business e-commerce (B2B)
– Supports business transactions on across private
networks, the Internet, and the Web
• Consumer-to-consumer e-commerce (C2C)
– Connects individual sellers with people shopping for
used items
– E.g. ebay.com
16

17. Types of E-Commerce
17

18. E-Commerce from the Buyer’s Perspective
• Process of buying or acquiring goods or
services
– Realizing a need
– Researching a product
– Selecting a vendor
– Providing payment
– Accepting delivery
– Using product support
18

19. E-Commerce from the Buyer’s Perspective
19

20. E-Commerce from the Seller’s Perspective
• Sellers business practices
– Market research to identify customer needs
– Manufacturing products or supplying services that
meet customer needs
– Marketing and advertising to make customers
aware of available products and services
20

21. E-Commerce from the Seller’s Perspective
• Sellers business practices
– Providing a method for acquiring payments
– Making arrangements for delivery of the product
– Providing after-sales support
• Supply chain management
– From the seller’s perspective, the process of
producing and selling goods
– Involves three areas of focus: demand planning,
supply planning, and demand fulfillment
• Demand fulfillment: process of getting the product or service to the
customer
21

22. E-Commerce from the Seller’s Perspective
22

23. Benefits and Challenges of E-Commerce
• Buyers enjoy the convenience of shopping from
their desktop
• B2C e-commerce
– Levels the playing field between large and small
businesses
• Challenges
– Established businesses must alter systems and
business practices
– Security, privacy, reliability: E-commerce can survive
only if all involved can trust the system
– Social concerns
23

24. Benefits and Challenges of E-Commerce
24

25. E-Commerce Applications
• E-Commerce
– Playing an increasingly important role in our
personal and professional lives
– Allows us to discover new and interesting
products
– Allows us to find better deals
– Used to monitor bank accounts and transfer
electronic funds
25

26. Retail E-Commerce: Shopping Online
• E-tailing provides customers with
– Product information
– The ability to comparison shop
• E-tailing options
– Set up an electronic storefront
– Lease space in a cybermall
• Web site that allows users to browse through a wide
variety of products offered by several different retailers
26

27. Retail E-Commerce: Shopping Online
27

28. Online Clearing Houses, Web Auctions,
and Marketplaces
• Provide a platform for businesses and
individuals to sell their products and
belongings
– www.ubid.com
• Provides a method for manufacturers to liquidate stock
and consumers to find a good deal
– eBay.com
• Most popular auction/marketplace
28

29. B2B Global Supply Management
and Electronic Exchanges
• Global supply management (GSM)
– Businesses can find the best deals for raw materials
and supplies needed to manufacture their products on
the global market
• Electronic exchange
– an industry-specific Web resource created to provide
a convenient centralized platform for B2B e-
commerce among manufacturers, suppliers, and
customers
– Promotes cooperation between competing companies
29

30. Marketing
• Web is used for
– Unsolicited advertising
• Banner: A rectangular area embedded in the Web page
content for advertising, often across the top of the page
– Access to product information through business Web
sites
• Get better deals and make informed decisions
– Market research
• Traditionally done by interviewing customers
• Market segmentation divides customer opinions based on
various criteria
• E-commerce allows market segmentation to take place on an
individual level
30

31. Marketing
31

32. Banking, Finance, and Investment
• Online banking provides
– Convenient access to bank balance information
– Ability to transfer funds, pay bills, and obtain
account histories
• Electronic funds transfer
– Popular for paying bills and receiving paychecks
• Online brokerages
– Able to execute trades fast, within seconds
32

33. Mobile Commerce (M- Commerce)
• A form of e-commerce
• Takes place over wireless mobile devices such
as
– Handheld computers and cell phones
– takes place in emerging technologies such as
dashtop computers embedded in automobile
dashboards
• Presents unique opportunities and challenges
33

34. Mobile Commerce

35. M-Commerce Technology
• Technologies and standards
– Wireless Application Protocol (WAP)
• a communication standard used by developers to create m-
commerce applications
– Wireless Markup Language (WML)
– Infrared or Bluetooth wireless networking technology
• Near Field Communications (NFC)
• Open Mobile Alliance (OMA)
– Hundreds of mobile operators, device and network
suppliers and companies have joined together to create
standards and interoperability between mobile devices
35

36. Types of M-Commerce Applications
• Methods for delivering m-commerce services
– Directly from cell phone service providers
– Via mobile Internet or Web applications
• Location-based m-commerce applications
– Using Short Message Service (SMS) text messaging
or Multimedia Messaging Service (MMS)
– Using short-range wireless technology, such as
infrared
• Proximity payment system
36

37. Types of M-Commerce Applications
37

38. E-Commerce Implementation
• Implementing e-commerce
– Requires large investment and expertise
• E-Commerce host
– A company that takes on some or all of the
responsibility of setting up and maintaining an e-
commerce system for a business or organization
38

39. Infrastructure
• E-Commerce requires significant infrastructure
changes
• Businesses must have employees who are
technically savvy
• B2C e-commerce
– Often connects manufacturers directly with
consumers, cutting out the middleman
– Requires shipping individual products directly to
consumers
39

40. Infrastructure
40

41. Hardware and Networking
• Underestimating the amount of Web traffic
– Leads to network stalls and long wait times
• Typical e-commerce Web site
– Employs one or more server computers and a
high-speed Internet connection
• Outsourcing to a Web hosting company
– Can operate 24 hours a day, 7 days a week
– Load-balancing
41

42. Software
• Web Server Software
– Responds to requests for Web pages
• Web Server Utility Programs
– Provide statistical information about server usage
and Web site traffic patterns
• E-Commerce Software
– Supports e-commerce activities
– Includes catalog management, electronic
shopping cart, and payment software
42

43. Software
• Web Site Design Tools
– What-you-see-is-what-you-get (WYSIWYG)
applications or wizards
• Graphics Applications
– Design and create graphic elements of Web sites
• Web Site Development Tools
– Application programming interfaces (API’s)
• Allow software engineers to develop Web-driven
programs
43

44. Software
• Web services
– Programs that automate tasks by communicating
with each other over the Web
– Systems developers can provide tools for
automating trivial or repetitive tasks
– Important in transaction processing
44

45. Building Traffic
• The 3Cs Approach
– Content, community, and commerce
• Keywords and Search Engines
– Choose name and product names that best
describe business purpose and features
– Select descriptive domain names
– Business-related keywords can be listed in the
HTML meta tag
• Read by search engines and servers, but not displayed
on the page
45

46. Building Traffic
• Marketing
– Online advertising methods include banner ads,
pop-up ads, and e-mail
– market segmentation: customer opinions are
divided into demographic variables such as race,
gender, income, education, and age to determine
which segment a product appeals to most
– Offline advertising methods include magazines,
newspapers, radio, and television
46

47. Building Traffic
47

48. Electronic Payment System
• proximity payment system
– allows customers to transfer funds wirelessly between their mobile
device and a point-of-sale terminal
• Electronic cash (e-cash or digital cash)
– Provides a private and secure method of transferring funds from a
bank account or credit card to online vendors or individuals
– PayPal
• Best-known e-cash provider
• E-cash benefits
– Privacy - hides account information from vendors
– Convenient if seller cannot process a credit card
• Smartcards
– Credit cards with embedded microchips that can store and process data
and can be used as electronic wallets
48

49. Electronic Payment System
49

50. Electronic Payment System
50

51. International Markets
• Internet users of all nationalities will have access to
your products
• First consideration of a global e-commerce strategy
– Visitors of all nationalities and cultures should feel
comfortable while viewing your Web content
• Costly approach
– Create multiple versions of your Web site, each in a
different language
• Once the international market is won over, e-tailer
faces other challenges
– Foreign Currency, shipping, national taxes
51

52. E-Commerce Security Issues
• There are significant privacy and security
concerns
– Public network
– No buyer or seller identity verification
– Hacker attacks
52

53. E-Commerce Security Issues
• Digital certificate
– A type of electronic business card
– Attached to Internet transaction data
– Verifies the sender of the data
– Provided by certification authorities
– Encryption
• Uses high-level mathematical functions and computer
algorithms to transform data so that it is unintelligible
to all but the intended recipient
53

54. E-Commerce Security Issues
• Securing data in transit
– Secure Sockets Layer (SSL)
• Digital certificates combined allows for encrypted
communications to occur between Web browser and
Web server
– Transport Layer Security (TLS)
• A URL associated with this begins with https
• Allow for encrypted communication to occur between
browsers and servers
• Secures usernames, passwords, credit card information
54

55. E-Commerce Security Issues
55

56. Business Resumption Planning
• Great pains are taken to ensure that
transaction processing systems remain in
working order
• Business resumption planning (BRP)
– Takes into account every possible disaster and
provides courses of action to minimize negative
effects
– The goal is to protect data and keep key systems
operating until order is resumed
56

57. Summary
• E-Commerce
– Systems that support electronically executed
transactions
• Transaction processing system (TPS)
– Supports and records transactions
• Three main types of e-commerce
– Business-to-consumer (B2C)
– Business-to-business (B2B)
– Consumer-to-consumer (C2C)
57

58. Summary
• Retail Web sites
– Allow consumers to comparison shop
• Mobile commerce
– A form of e-commerce that takes place over wireless
mobile devices
• E-Commerce
– Requires investment in networking, hardware, and a
wide variety of software
– Requires changes in infrastructure
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