Electronic commerce refers to business activities conducted using electronic data transmission via the Internet and the World Wide Web. E-commerce is broader and encompasses many more business activities than just Web shopping. The standard formats used in EDI contain the same information that businesses have always included in their standard paper invoices, purchase orders, and shipping documents.
Copyright:
Attribution Non-Commercial (BY-NC)
Available Formats
Download as PPT, PDF, TXT or read online from Scribd
Electronic commerce refers to business activities conducted using electronic data transmission via the Internet and the World Wide Web. E-commerce is broader and encompasses many more business activities than just Web shopping. The standard formats used in EDI contain the same information that businesses have always included in their standard paper invoices, purchase orders, and shipping documents.
Electronic commerce refers to business activities conducted using electronic data transmission via the Internet and the World Wide Web. E-commerce is broader and encompasses many more business activities than just Web shopping. The standard formats used in EDI contain the same information that businesses have always included in their standard paper invoices, purchase orders, and shipping documents.
Copyright:
Attribution Non-Commercial (BY-NC)
Available Formats
Download as PPT, PDF, TXT or read online from Scribd
Electronic commerce refers to business activities conducted using electronic data transmission via the Internet and the World Wide Web. E-commerce is broader and encompasses many more business activities than just Web shopping. The standard formats used in EDI contain the same information that businesses have always included in their standard paper invoices, purchase orders, and shipping documents.
Copyright:
Attribution Non-Commercial (BY-NC)
Available Formats
Download as PPT, PDF, TXT or read online from Scribd
Download as ppt, pdf, or txt
You are on page 1/ 33
Traditional Commerce and Electronic Commerce
To many people, the term electronic commerce means shopping on the part of the Internet called the World Wide Web. Although consumer shopping on the Web was running about $130 billion per year in 2002 and is expected to exceed $500 billion by 2004, electronic commerce is much broader and encompasses many more business activities than just Web shopping.
Traditional Commerce and Electronic Commerce
Electronic commerce refers to business activities conducted using electronic data transmission via the Internet and the World Wide Web. The three main elements of e-commerce are: Business-to-consumer Business-to-business The transactions and business processes that support selling and purchasing activities on the Web
Other categories include: consumer-to-consumer and consumer-to-government.
Definitions and Content of Field (cont.)
A global networked environment is known as the Internet A counterpart within organizations, is called an intranet An extranet extends intranets so that they can be accessed by business partners.
Pure Vs. Partial Electronic Commerce
Three dimensions the product (service) sold [physical / digital]; the process [physical / digital] the delivery agent (or intermediary) [physical / digital]
Traditional commerce all dimensions are physical
Pure EC all dimensions are digital
Partial EC all other possibilities include a mix of digital and physical dimensions
The Dimensions of Electronic Commerce
Virtual product Electronic commerce areas The core of electronic commerce
Digital Product Physical Product Traditional commerce
Virtual process Digital process Physical process Physical agent Digital agent
Virtual delivery agent
Electronic Commerce Electronic Funds Transfers (EFTs) have been used by banks for many years. Electronic Data Interchange (EDI) occurs when one business transmits computerreadable data in a standard format to another business.
Electronic Commerce Businesses who engage in EDI with each other are called trading partners. The standard formats used in EDI contain the same information that businesses have always included in their standard paper invoices, purchase orders, and shipping documents. Firms, such as General Electric and Wal-Mart, have been pioneers in using EDI to improve their purchasing process.
Value Added Network (VAN)
A value added network is an independent firm that offers connection and EDI transaction forwarding services to buyers and sellers engaged in EDI. VANs are responsible for ensuring the security of transmitted data.
VANs charge a fixed monthly fee plus a pertransaction charge to subscribers.
Activities as Business Processes
Business processes refer to the group of logical, related, and sequential activities and transactions in which businesses engage, including: Transferring funds Placing orders Sending invoices Shipping goods to customers
Electronic Commerce Applications Stocks Jobs On-line banking Procurement and purchasing Malls On-line marketing and advertising Home shopping Auctions Travel On-line publishing
People: Buyers, sellers, intermediaries, services, IS people, and management
Public policy, legal, and privacy issues
Technical standards for documents, security, and network protocols payment
Organizations: Partners, competitors, associations, government services
Infrastructure (1) Common business services infrastructure (security smart cards/authentication electronic payment, directories/catalogs) (2) Messaging and information distribution infrastructure (EDI, e-mail, Hyper Text Transfer Protocol) (3) (4) Multimedia content Network infrastructure and network (Telecom, cable TV publishing infrastructure wireless, Internet) (HTML, JAVA, World (VAN, WAN, LAN, Wide Web, VRML) Intranet, Extranet) (5) Interfacing infrastructure (The databases, customers, and applications)
Prentice Hall, 2000
A Framework for Electronic Commerce
Management
Electronic Markets A market is a network of interactions and relationships where information, products, services, and payments are exchanged. The market handles all the necessary transactions. An electronic market is a place where shoppers and sellers meet electronically. In electronic markets, sellers and buyers negotiate, submit bids, agree on an order, and finish the execution on- or off-line.
Response to information request Purchase acknowledgment Shipping notice Purchase/service delivery (if online) Payment acknowledgment
Response to fulfillment request Shipping notice
Payment remittance notice Electronic transfer of funds
Payment approval Electronic transfer of funds
Electronic transfer of funds
Shopper/Purchasers Bank
Transaction Handlers Bank (Automated Clearing House)
Seller/Suppliers Bank
Electronic Markets Prentice Hall, 2000 11
Interorganization Information Systems
An interorganizational information system (IOS) involves information flow among two or more organizations. Its major objective is efficient routine transaction processing, such as transmitting orders, bills, and payments using EDI or extranets. Scope: An IOS is a unified system encompassing two or several business partners. A typical IOS includes a company and its suppliers and and/or customers.
Types of Interorganizational Systems
Electronic data interchange (EDI) Extranets Electronic funds transfer (EFT) Integrated messaging systems Shared databases Electronically-supported supply chain management
Advantages of Electronic Commerce
Electronic commerce can increase sales and decrease costs. Web advertising reaches a large amount of potential customers throughout the world. The Web creates virtual communities for specific products or services.
Advantages of Electronic Commerce
A business can reduce its costs by using electronic commerce in its sales support and order-taking processes. Electronic commerce increases sale opportunities for the seller. Electronic commerce increases purchasing opportunities for the buyer.
The Benefits of Electronic Commerce
Benefits to Organizations Expands the marketplace to national and international markets Decreases the cost of creating, processing, distributing, storing and retrieving paper-based information Allows reduced inventories and overhead by facilitating pull type supply chain management The pull type processing allows for customization of products and services which provides competitive advantage to its implementers
Benefits to Organizations (cont.)
Reduces the time between the outlay of capital and the receipt of products and services Supports business processes reengineering (BPR) efforts Lowers telecommunications cost - the Internet is much cheaper than value added networks (VANs)
Benefits to Customers Enables customers to shop or do other transactions 24 hours a day, all year round from almost any location Provides customers with more choices Provides customers with less expensive products and services by allowing them to shop in many places and conduct quick comparisons Allows quick delivery of products and services in some cases, especially with digitized products
Benefits to Customers (cont.)
Customers can receive relevant and detailed information in seconds, rather than in days or weeks Makes it possible to participate in virtual auctions Allows customers to interact with other customers in electronic communities and exchange ideas as well as compare experiences Electronic commerce facilitates competition, which results in substantial discounts.
Benefits to Society Enables more individuals to work at home, and to do less traveling for shopping, resulting in less traffic on the roads, and lower air pollution Allows some merchandise to be sold at lower prices benefiting the poor ones Enables people in Third World countries and rural areas to enjoy products and services which otherwise are not available to them Facilitates delivery of public services at a reduced cost,increases effectiveness, and/or improves quality
Disadvantages of Electronic Commerce
Some business processes are difficult to be implemented through electronic commerce. Return-on-investment is difficult to apply to electronic commerce. Businesses face cultural and legal obstacles to conducting electronic commerce.
Technical Limitations of Electronic Commerce (cont.)
The need for special Web servers and other infrastructures, in addition to the network servers (additional cost) Possible problems of interoperability, meaning that some EC software does not fit with some hardware, or is incompatible with some operating systems or other components
Non-Technical Limitations Cost and justification (35% of the respondents) The cost of developing an EC in house can be very high, and mistakes due to lack of experience, may result in delays. There are many opportunities for outsourcing, but where and how to do it is not a simple issue. Furthermore, to justify the system one needs to deal with some intangible benefits which are difficult to quantify.
Non-Technical Limitations (cont.)
Security and Privacy (17% of the respondents) These issues are especially important in the B2C area, and security concerns are not truly so serious from a technical standpoint. Privacy measures are constantly improving too. Yet, the customers perceive these issues as very important and therefore the EC industry has a very long and difficult task of convincing customers that online transactions and privacy are, in fact, fairly secure.
Lack of trust and user resistance (4%)
Customers do not trust an unknown faceless seller, paperless transactions, and electronic money. So switching from a physical to a virtual store may be difficult.
Non-Technical Limitations (cont.)
Other limiting factors are: Lack of touch and feel online Many unresolved legal issues Rapidly evolving and changing EC Lack of support services Insufficiently large enough number of sellers and buyers Breakdown of human relationships Expensive and/or inconvenient accessibility to the Internet
The Driving Forces of Electronic Commerce
The New World of Business Business pressures Organizational responses The role of Information Technology (including electronic commerce)
Major Business Pressures
Market and economic pressures Strong competition Global economy Regional trade agreements (e.g. NAFTA) Extremely low labor cost in some countries Frequent and significant changes in markets Increased power of consumers Changing nature of workforce Government deregulation of banking and other services Shrinking government budgets subsides Increased importance of ethical and legal issues Increased social responsibility of organizations Rapid political changes
Societal and environmental pressures
Technological pressures
Rapid technological obsolescence Increase innovations and new technologies Information overload Rapid decline in technology cost Vs. performance ratio
Individual and Roles Framework for Organizational and Societal Impacts of Information Technology
Business Process Reengineering
Reducing cycle time and time to market Empowerment of employees and collaborative work Knowledge management Customer-focused approach Business alliances virtual corporation
Everything Will Be Changed
Improving Direct Marketing Product promotion New sales channels Direct savings Time-to-market (reduced cycle time) Customer service Brand or corporate image
Other Changes in the Workplace
Transforming Organizations Work will change Technology learning Organizational learning
Redefining Organization New product capabilities New business models
Other Changes in the Workplace (cont.)
Impacts on Manufacturing Pull processing, mass customization, shorter cycle time, integration (ERP), electronic bidding and procurement
Impacts on Finance and Accounting
Electronic payment systems, electronic cash, automating back office, home banking, electronic stock trading
