E-Commerce/MIS/Leading University/MRM

E-Commerce and e-Business E-Commerce 1.1 What is e-Commerce:

E-Commerce refers to the process of buying or selling products or service over a
n electronic network. E-Commerce is conducted via the Internet in which the most
popular medium.
It combines a range of process such as : Electronic Data Interchange (EDI) Elect
ronic mail (E-mail) World Wide Web (WWW) Internet Applications Network Applicati
ons. Basically e-Commerce involves the sale or purchase of goods or services ove
r computer mediated networks. These goods or services may be ordered though thes
e networks, but payment for them and the ultimate delivery of the goods and serv
ices may be conducted on or off line. Some analyst define e-commerce as simple b
uying and selling over electronic networks; and use e-business (buzzword) to ref
er to these wider range of supporting business activities that can be conducted
over such networks. There are three basic components to every e-commerce solutio
n: Communications Standards Software
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1.2 Existing Barriers: Security Tariffs Legal issues 1.3 History of E-Commerce:
In 1950s companies began to use computers to store and process internal transacti
on records By 1960s businesses that engaged large volume of transaction had began
exchanging transaction information on punched card In 1968 Transportation Data
Co-ordination Committee (TDCC ) was formed by some companies In 1979 ANSI (Ameri
can National Standards Institute) chattered a new committee to develop uniform E
DI (Electron Data Interchange) In 1987 UN publish its first standards under the
title EDI
2. Traditional and Electronics Business Transaction: The business process is bro
adly divided into five main categories namely: Market product and services Sell
and deliver products and services Process payments Manage relationship Manage th
e enterprise 2.1 Traditional Commerce vs e-Commerce Items Sales Channel E-Commer
ce Enterprise Internet Consumer Entire world 24x7 Traditional Commerce Manufactu
rer Wholesaler Retailer Consumer Restricted area Restricted sales
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Sales Hour /Region

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Sales place/method
Customer information acquisition
Marketing activity Customer support
capital
Market space (Network) Sale based on information Any time acquisition through in
ternet Digital Data without no reentry 1:1 Marketing via bidirectional communica
tion Real time support for customer Dissatisfaction Real time acquisition of cus
tomer needs small

hour Market space (store) Sale based on display Market survey and salesman Requi
re information reentry
One way marketing to consumer Delayed support for customer Dissatisfaction Time
different for catching customer needs large
3. Types of E-Commerce: E-commerce can be divided into primarily three categorie
s (1) Business to Consumer (B2C): Where enterprises sell directly to the custome
r, often cutting out (disinter mediating) wholesalers or bricks and mortars retail o
utlets. B2C is the most commonly understood form of internet business (www.amazo
n.com). The most successful trading has been with standard products such as CDs,
Books, Software, downloadable music etc. (2) Business to Business (B2B): It is
larger, growing faster. This includes procurements of raw materials and supplies
, liaison with contractors, sales channels,
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E-Commerce/MIS/Leading University/MRM
servicing customers, collaborating management with data and knowledge.
with
partners,
integrated
(3) Business to Government(B2G): Here business trade directly with
government offices and agencies for public procurement (e.g. supplies for hospit
als, school and other government contracts.
(4) Consumer to consumer (C2C): Online transaction between private
individuals.
(5) Consumer to business(C2B):
4. Benefits of E-Commerce The benefits of e-Commerce are many and many. Some of
them include: 24X7 operation: Round the clock operation is an expensive proposit
ion in the brick and mortar world while it is natural in the click and conquer w
orld
:Global reach: The net being inherently global, reaching global
customers is relatively easy on the net compared to the world of bricks.
Cost of acquiring serving and retaining customers: It is relatively
cheaper to acquire new customers over the net. Thanks to 24 X 7 operation and it
s goal reach. Through innovative tools of push technology to retain customers, l
oyalty with minimal investments.
An extended enterprise is easy to build: In todays world every
enterprise is a part of the connected economy; as such you need to extend your ent
erprise all the way to your suppliers and business partners like distributers, r
etailers and ultimately you end customers. Internet provides an effective (often
less expensive) way to extend your enterprise beyond the narrow confines of you
r own organization. Tools like enterprise resource planning (ERP) ,supply chain
management (SCM) and customer relationship management (CRM), can easily be deplo
yed over the net permitting amazing efficiency in
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time needed to market, customer loyalty, on time delivery and eventually profita
bility.
Dis-intermediation: Using the net one can directly approach the
customers and suppliers, cutting down the number of level sand in the process, c
utting down the costs.
Improved customer service to your clients: It results in higher
satisfaction and more sales.
Power to provide the best of both the worlds: It enhances
traditional along with internet tools.
The impact of e-Commerce to business can be huge. E-commerce can transform the w
ay products and services are created, sold and delivered to the customers. It ca
n also change the way in which the company works with its partners. The followin
gs are well established benefits of ecommerce: Improved productivity: Using e-co
mmerce, the time required to create, transfer and process a business transaction
between trading partners is significantly reduced. Furthermore human errors lik
e duplication of records are largely eliminated with the reduction of data entry
and re-entry in the process. This improvement in speed and accuracy plus the ac
cess to document and information, will result in increase in productivity.

Cost savings: The cost savings stem from efficient communication, quicker turnar
ound and closer access to market. Streamlined business process: Use of internet
and with automation of business process can make business more efficient. Better
Customer service: Customer can enjoy the convenience of shopping at any our and
anywhere in the world.

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Opportunities for new business: Business over the internet have global customer
reach. There are endless possibilities for business to exploit and expand their
customer base.]
4.1 Benefits of e-Commerce to Organization Expands the Marketplace to national a
nd international market Decrease the cost of creating, processing, distributing,
storing and retrieving paper based information Allows reduced inventories and o
verhead by facilitating pull-type supply chain management The pull-type processi
ng allows for customization of products and services which provides competitive
advantage to its implementers Reduces the time between the outlay of capital and
the receipt of product and services Supports Business process re-engineering (B
PR) efforts Lowers telecommunication cost- the internet is much cheaper than val
ue added networks (VANs) 4.2Benefits of e-Commerce to Consumers Enables consumer
s to shop or do other transaction 24 hours a day, all year round from almost any
location Provides consumers with more choices Provides consumers with less expe
nsive products and services by allowing them to shop in many places and conduct
quick comparisons Allows consumers to interact with other consumers n electronic
communities and exchange ideas as well as experiences Facilitates competition w
hich results in substantial discounts Allows quick delivery of products and serv
ices (in some cases) especially with digitized products Consumers can receive re
levant and detail information in seconds rather than in days or weeks Makes it p
ossible to participate in virtual auction
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4.3Benefits of e-Commerce to Society Enables more individuals to work at home, a
nd 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 benefiti
ng less affluent people Enable people in third world countries and rural areas t
o enjoy product and services which otherwise are not available to them Facilitat
es delivery of public services at reduced cost, increases effectiveness and or i
mprove quality 4.4 Disadvantages: Some disadvantages because of newness of eComm
erce. If e-commerce matured they will perhaps remove. Inadequate inspection faci
lity Security legal issues 4.5 Technical Limitations to e-commerce Lack of suffi
cient system security, reliability, standards and communication protocols Insuff
icient telecommunication bandwidth The software development tools are still evol
ving and changing rapidly Difficulties in integrating the internet and e-commerc
e software with some existing application and data base The need for special web
servers and other infrastructures, in addition to the network servers (addition
al cost) Possible problems of inter operability, meaning that some EC softwares
does not fit with some hardware, or is incompatible with some operating systems
or other components 4.6 Non- Technical Limitations to e-commerce Cost and Justif
ication - The cost of developing an EC in a house can be very high .
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Security and privacy Lack of trust and user resistance Channel conflict Other li
mitations factors are: -Lack of touch and feel online etc
What are the reasons to put a company on a website?
1. To establish a presence: To be a part of the internet community and show that
you are interested in serving them. 2. To network 3. To make business informati
on available 4. To serve your customers 5. To heighten public interest 6. To rel
ease time sensitive materials 7. To sell things 8. To make pictures sound and fi
lm files available 9. To reach a high desirable demographic market 10.To answer
frequently asked questions 11.To stay in contact with Sale people 12.To open int
ernational markets 13.To create a 24 hour service 14.To make changing informatio
n available quickly 15.To allow feedback from customers 16.To test market new se
rvices and product 17.To reach the media 18.To reach the education and youth mar
ket 19.To reach the specialized market 20.To serve your local market.
E-Business vs E-Commerce E-Commerce
Describe the difference between E-commerce and E-business
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E-Commerce/MIS/Leading University/MRM
E-Commerce describes the process of buying, selling, transferring, or exchanging
products, services, and or information via computer networks including the inte
rnet. E-Commerce can take several forms depending on the degree of digitization
(the transformation from physical to digital). The degree of digitization relate
s to: The product (service) sold The process The delivery agent (or intermediary
) E-Business: Compared with e-Commerce, e-Business is a more generic term; it re
fers not only to information exchanges related to buying and selling but also to
servicing customers and collaborating with business partners, distributors and
suppliers. E-Business encompasses sophisticated B2B interactions and collaborati
on activities at a level of enterprise applications and business process. Charac
teristics of e-Business E-Business is about integrating external company with an
organizations internal business process: Collaborative product development Colla
borative planning, forecasting and replenishment Procurement and order managemen
t Operations and logistics
Describe the main ingredients of E-business solution
1. Web: Website act as the pioneer role in e-commerce 2. Customer relationship m
anagement system (CRM): front office that help enterprise deal directly with their
customers. CRM integrates and automates customer serving process within a compa
ny.
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3. Enterprise Resource Planning System (ERP): Management Information system that
integrate and automate many of the business practices associated with the opera
tions or production aspects of a company. An ERP system includes: Production: Ma
nufacturing resource planning and execution process Buying a product: Procuremen
t process Sales of products and services: Customer order management process Cost
ing, paying bills and colleting: financial/management accounting and reporting p
rocess 4. Supply Chain Management (SCM): A supply chain is a network of faciliti
es and distribution option that performs the function of procurement of material
s; transformation of these materials into intermediate and finished product & di
stribution of these finished products to customer. A supply chain has three esse
ntially main parts: the supply, manufacturing and distribution. 5. Knowledge Man
agement (KM): Knowledge regarding markets, products, processes, technologies and
organization that a business owns that enable its business process to generate
profits. Also include the subsequent planning and control of actions. (12) Overv
iew of implementation stage of E-Commerce in Bangladesh: M/o Commerce, Ministry
of Information and Communication and Planning Commission jointly implementing th
e e-commerce in Bangladesh There is E-Commerce committee headed by commerce secr
etary Ministry of Information and Communication is working for enacting a law re
garding Electronic Transaction act Online order from foreign buyer has started ww
w.registrarofcompniesbangladesh.com here registration of joint stock company sta
rted as online Online non-financial transaction has started by all bank from 3172002 Intra-bank transaction started from 31-7-2003
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Some bank already started credit card system in a limited way(e.g. JB) Recommend
ed Books and articles
(1) (2) (3) (4) (5) Web search (e.g. Amazon.com) Jeffrey F Rayport and Bernard J
Jaworski e-Commerce P.T. JOSEPH, E-Commerce: A Managerial Perspective Kalakota and
Winston,Frontiers of Electronic Commerce SAMS, Teach Yourself-Beginning e-Commerce
with Visual basic, ASP, SQL Server 7.0 and MTS (6) SAMS, Teach Yourself E-Commerc
e Programming with ASP. *(7) Electronic Commerce- NCC Education Limited.
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