E-Market

➢ Marketing is an organizational function and set of processes for creating, communicating, and
delivering value to customers and for managing customer relationships in ways that benefit the
organization and its stakeholders.
➢ Electronic Market
➢ Online forums: space where businesses, customers, suppliers, and buyers meet.
➢ In electronic markets, information technology is applied to traditional marketing. thus a marketing
strategy based on organization’s information technology refers to an e-marketing strategy.
➢ Personalization: Precise needs of the customers.
➢ E-markets offer a global reach and hence have changed the competitive environment.
➢ E-marketing includes email marketing, online advertising, search engine marketing, etc.
➢ Better platform for gathering information.
➢ Ability to draw customers to one’s website and turn this visit into business, and further ensure
revisit and business.

Contextual E-Marketing

➢ Marketing products in the context of a customer’s choice is referred to as contextual marketing.

➢ Optimization of search engines
➢ Selection of web sites for advertisements.
➢ Person’s web surfing habits, online surveys, analysis of customer interests.
➢ Reduction of time and cost.
➢ Google, Kanoodle, and Clicksor.

Strategic E-Marketing

The goals of strategic e-marketing include lead generation with the target in mind, maximizing the lead
conversion rate, precise analytics, and continuous learning.

E-Marketing Commumication

➢ Planned: e-advertising
➢ Unplanned: word of mouth, customer communications, customer feedback. Cannot be controlled
directly but indirectly through the improvement in product experiences, product quality, and
services.

Internet Advertising

➢ Emails, bulletins, pop ups.

➢ Through videos or multimedia; demos of products; interactive demos; free version limited
functionalities.
➢ Content sponsored advertising; website based advertising; search marketing; search engines;
organizations buy keywords or key phrases at search engines (eg. Key phrase could be nutritious
food); increase visibility, highly targeted audience, so expensive.
Methodologies for building a search marketing program

➢ First step: keywords for actual product or service (eg. Blood sugar measurement kit)
➢ Second step: problem whose solution lies with the product (eg. Obesity related problems)
➢ Third step: search engine optimization- alteration of websites titles, hiding or highlighting few
words in keywords, etc.

How e-markets work

➢ Buyers-product offers-product review-prices versus functionality

➢ Interaction with other sellers and customers
➢ Sharing own experiences
➢ Raising queries online in user groups or bulletin boards.
➢ Thus, companies should answer queries and respond to grievances.
➢ Person places order-integrated stock tracking systems both upstream and downstream-customer
receives product-enters a feedback.
➢ Forward auction-many buyers and one seller which results in increase in price.
➢ Reverse auction- many sellers and one buyer which brings the price down.

E-Shops

➢ Combined with traditional business models in order to obtain the best of both worlds.
➢ Easy and low cost route for huge market presence.
➢ Customers get reduced price, greater choice, and rich information.
➢ Example: ticketing shops, flower delivery portals, etc.

E-Malls

➢ Different E-Shops under one umbrella.

➢ Website that is integrated with storefronts of different e-shops.
➢ Example: Sifymall.com, eBay.com

Third Party Marketplace

➢ Many sellers may sell their products services using a standard online mall’s seller’s account or
merchant account by paying some additional monthly subscription fee to that e-mall.
➢ Example, Amzon.com, Best Buy, Sears, Walmart.
➢ Customers buy those items directly from the third party sellers using the infrastructure of
Amazon.com. Amazon.com also allows customers to use payment gateways. It forwards these
payments to the third party sellers.

Transactions at e-markets

E-procurement

Wider choice of suppliers, better quality, improved delivery, reduced price.

E – Auction

➢ Online bidding; Quality, delivery, and price are key factors; Multiple re-submissions possible;
perfect competitive market; true market price of a product; supplier starts with basic price and
buyers need to quote higher than this base price in order to buy the product; highest price before
the due date wins the bid; fair chance to one and all.
➢ First step- selection of suitable commodities
➢ Second step- specifying requirements accurately, understanding the competitiveness of the
market with reference to selected commodities, and sufficient value to attract competition.
➢ Third step- bid is announced or opened and tenders invited.
➢ Fourth step- bid is submitted; tenders are evaluated to determine qualified candidates.
➢ Fifth step- auction begins amongst the qualified candidates; buyer awards the contract to the
supplier who wins the bid.
➢ Savings in e-auctions sometimes may be as high as eighty percent.

Business Advertising

Email Marketing

➢ Promotional mails for new potential customers

➢ Promotional mails to existing customers
➢ Promotional mails regarding schemes for loyal customers
➢ New IT laws require organizations to refrain from email marketing
➢ Only permission based email marketing possible

Internet Distribution

Half of Dell’s sales takes place online.

Online promotions

➢ Discount messages
➢ Trials of free software
➢ Providing a website as the home page
➢ Promotional message could also be delivered through partner websites, websites of related
products, advertising websites, and search engines.

Virtual Communities

Members and the information contributed by members are key constituents

➢ Provide required support for marketing activities

➢ Build customer loyalty

E – Market Success Factors

Resources of E- Marketing

➢ All the resources that aid in marketing online and help to reach out to the customers.
➢ Internet connections, emails, CRM, front and back end communicating networks, etc.
➢ Limitations- limited infra, dependence on readiness of market, brand driven. In case of new
products and companies it is difficult to convince customers.

Virtual stores

Example: Amazon.com

Retailing Approaches – Virtual vs Tangible

Do not rely on actual stocking of a product, but remain in touch with the suppliers and keep track of the
stock availability with them.

Advantages of Virtual stores

➢ Reduce the cost and thereby offer better discounts.

➢ Reaching beyond local boundaries
➢ Measurable results. Emails, banner advertising, use of counters, etc. help in determining the
numbers. This helps in refining marketing efforts.
➢ 24x7 marketing.
➢ Shorter response time. Client enquiry addressed immediately and helps build effective client
relationship.
➢ Personalization; One to one marketing
➢ Better conversion rates.
➢ Interesting and catchy campaigns.
➢ Reviews available
➢ Go through content in items like books
➢ Suppliers gain more visibility
➢ Customers gain access to information
➢ Cyber malls offer list of vendors for customers to choose from
➢ All this is made possible from the comforts of one’s home and help save on gas, traffic jams, time
and money.

Disadvantages

➢ This model doesn’t work very well for products like food items or other such items which customer
likes to see before buying.
➢ Technological readiness is an issue.
➢ Secured system for financial transactions.

Legal Aspects
 ➢ Accurate description of marketed products.
➢ Terms and conditions mentioned clearly and followed diligently.
➢ Respecting privacy of customers.
➢ Copyrights protect the original works of literary, musical, audio visual works, etc, preventing
unauthorized reproduction, distribution, performance, etc.
➢ Licensing of products like softwares is meant to prevent unauthorized duplication and
distribution.

BACK END SYSTEMS

Back End System Support Requirements

Security
 ➢ E-business organizations found that consolidating various functional databases allows users to
obtain better information and derive more benefits, making the same information more valuable.
➢ However, the internet allows easy access to valuable information not only to genuine users and
employees but also to hackers, criminals, and corporate spies.
➢ How can an organization be confident about the security build in the product? This could be done
by comparing the independent security evaluations against internationally established security
criteria that can offer assurance of the vendors’ security claims.
➢ Even if the users are traced it would be very difficult to prevent many others from accessing the
important and sensitive information.

Scalability

➢ Scalability is the ability to handle increased workload or accommodate a larger number of users
without crashing.
➢ Larger websites not only contain large amounts of data, but also more content related aspects
and different graphical user interface/multimedia, etc. Hence it is more challenging for the bigger
websites.

Availability

➢ Disruption of services has to be minimized especially during maintenance and system upgrades.
Constant availability is extremely crucial for online services involving banks and other financial
organizations.
➢ Unavailability leads to impatience among customers, affecting the business from the perspective
of both customer satisfaction and loss of sales.

Adaptability

➢ The capability to handle a continuously changing workload is referred to as the adaptability of an

e-business application.
➢ It is essential for e-business to be capable of being modified, repaired, and debugged online.

Manageability

➢ When available resources are already being allocated to various applications, the manageability
aspect helps one to arrange resources to support unexpected loads.

Maintainability

The maintainability of an e-business system can be described as the total time taken by the system to
indentify and fix a problem within that system. For example, one may say that not more than three hours
should be spent in identifying and solving any type of problem.

Assurance
e-businesses can assure technology products that they buy and deploy by getting them evaluated by
proper organizations. For example, Centre for internet security (CIS) is an organization that helps other e-
business and e-commerce organizations in reducing their risk of disturbance due to poor technical security
controls

Interoperability

E-business has to work in accordance with the systems owned and controlled by others, such as suppliers,
dealers, partners, customers, and so on. The various operations involved, primarily security mechanisms
in an e-business system, should be flexible, standard based, and interoperable. This assures that all
components of the integrated e-business system work with each other in an efficient and flawless manner.

Load Balancing

A sudden popularity of certain information may result in a large number of requests to that particular
server.

Common method to balance loads is to have many servers running the same application with access to
the same content. The server load balancing module distributes client request across servers. Thus,
multiple redundant servers help scale the capability of the website while ensuring its availability. If a
server fails or is taken out for maintenance, the other servers can continue serving the clients’ requests
without disturbing the availability.

Internet

➢ The internet is an interconnected network of thousands of networks, which are made up of

millions of computers, generally known as host computers or nodes.
➢ An end node consists of a client requesting for a service or a server that provides services. The
clients are generally computers with web browsers that communicate with various servers, and
servers are service providers for clients, such as web servers, mail servers, etc.
➢ Intermediate nodes are nothing but computers that are known as routers and bridges responsible
for routing traffic between network segments.
➢ Every node has a unique IP address. A domain name is generally assigned with every IP address
for the sake of convenience.
➢ The channel needed for communication between nodes can be implemented through a co-axial
or a fibre optic cable. It can be also a wireless transmission, such as microwave, cellular phone
communication.
➢ www is the most significant service that is provided by the internet. It allows access to various
web pages to internet users. Web pages are documents that are created using hyper text markup
language (HTML) and stored on the internet’s host computers or nodes.

Packet Switching

➢ It is a method by which a digital message is sliced into discrete units known as packets and are
sent to receiver. The various packets may traverse through different communication links
 between the sender and the receiver as an when they become available. These packets are then
reassembled at the receiver’s end in order to build the original message.
➢ Each packet is appended with some additional information such as source address (IP),
destination address, length of packet, sequencing information, error control information.
➢ Router is a special purpose computer that connects different computer networks and routes the
packets towards their ultimate destination. Good routing algorithms help trace the best paths for
the packets as they travel, thus utilizing the communication path and capacity most efficiently.
➢ Circuit switching utilizes leased, dedicated telephone circuits to communicate with other
computers in the network. The best example is telephone systems in which a complete, point to
point circuit is put together between the caller and receiver to allow communication.

Internet Protocol

➢ It is a set of rules and standards to be adopted by a system for data transmission on the network.
➢ The protocol divides the network functionality into seven layers with the application layer at the
top and physical layer at the bottom.
➢ As a result, a connection over the internet can be easily established by any internet application,
without knowledge about the hardware that is used to transfer data on the internet.

TCP/IP Protocol

➢ IP provides the addressing scheme for the nodes on the internet. It is responsible for the actual
delivery of the packet to the destination.
➢ TCP establishes a connection between the sender and the receiver nodes and also ensures that
the packets that are transmitted by the sender computer are received in the same sequence by
the receiver computer without missing any intermediate packets during the journey.

TCP/IP is divided into four layers:

Network Interface Layer: responsible for placing the packets on the network on behalf of the sender and
receiving them from the network on behalf of the receiver.

Internet Layer: responsible for addressing the nodes, packaging the messages, and routing them on the
internet.

Transport Layer: provides communication with the application by sequencing the packets to and from the
application.

Application Layer: it provides a wide variety of applications with the ability of accessing the services of
the lower layers.

IP Address

➢ Each and every node on the internet has a unique IP address.

➢ Whenever we login into the internet the computer acquires a temporary IP address from the ISP.
 ➢ However, company or university computers may have their dedicated, permanent IP addresses.
➢ The first three sets of numbers recognize the local area network and the last set of number
denotes a specific computer in that network.
➢ DNS or domain name system automatically translates the web address from domain name to
corresponding numeric IP address.
➢ The web browser uses a uniform resource locater (URL) to identify its location on internet. A
typical URL contains a protocol like HTTP.
➢ Internet Protocol Version 4 (IPv4) can address 4 Billion IP addresses. It was endangered getting
exhausted by 1994.
➢ Dynamic IP Addresses: assigned to those internet users who connect to the internet for a short
time. A temporary IP address is assigned and is relieved once the connection is lost.
➢ Internet Protocol Version 6 (Ipv6) is a next generation protocol which uses 128 bit addresses as
compared to 32 bit using IPv4. So its address space supports 2128 addresses.
➢ Network Address Translation (NAT) allows an organization’s intranet to use a range of IP
addresses that can be real IP addresses of some other nodes. These IP addresses are not visible
outside the company’s intranet.

Client/Server Computing

If one server goes down, the other servers distribute the tasks of that server. This is also known as graceful
degradation.

Other Internet Protocols

➢ HTTP: Hypertext transfer protocol was developed in 1991 by IETF and the WWW Consortium.
➢ The HTTP creates one GET(object) message for every object situated on the web page of the
server and transfers this object from the server screen to the client screen. One web page may
have many objects such as text, graphics, images, or audio/video files. The POST method is used
to request as well as send some information to the server. It is mainly used to send a big chunk of
data to the server.
 ➢ FTP: File transfer protocol is the original and one of the oldest and fastest way of transmitting
large files.
➢ Telenet: Telenet is used to login remotely on another computer on the internet. Once attached
with the remote computer, one can download files or run several required programs.
➢ SSL: Secured sockets layer is a protocol that secures the communication taking place between
the client and the server. It helps secure communication of e-commerce data and e-business
payment information using various techniques such as message encryption, digital signature, etc.

Utility Programs

➢ Ping: Packet internet groper is a program that is used to check the physical connection between
two computers on a TCP/IP network. Ping also displays information, such as time to respond and
the current speed of the server on the internet.
➢ Tracert: It helps to trace the path of a message that is sent from one computer to a remote
computer on the internet.
➢ Path Ping: It combines the functions that are provided by Ping and Tracert. It provides information
of the path from the source node to the destination node and also the statistics for each node on
the way.

Internet Software

Internet software is the basic software that runs on every computer/node, end node, or intermediate
node that needs to connect to the internet.

Browsers

A browser is a software that is used to access the web.

Client side and Server side Programming

➢ Application programs that are written for e-business generally use Java. For e-banking and e-
shopping the entire shopping application program has to be installed on client’s computer.
➢ Client side script is executed in the web browser of the client computer thus allowing the web
browser to interact with the user as well as the web server.
➢ A client side script can simply be used to check the user’s input before submitting it to the server
➢ Server side programming allows all programs to exist in one single machine generally known as
server. The objective is to manage, centrally, all the programs related to a specific application,
such as online shopping or banking.
➢ Server side scripting offers a major advantage to web applications in terms of the capability to
tailor the response. If a new functionality needs to be added or one intends to switch to newer
versions or databases it can be performed on the server side and clients derive the advantage
regardless of the client software and hardware capabilities. Real time issues like security,
performance etc can be managed better by server side application programs.
 ➢ Server programs allow clients to enjoy the power and performance of a typical server
configuration with minimum requirements like a Pentium computer, a web browser, and an
internet connection.

Network and System Administration

➢ System administration should monitor every part of network and make correction centrally
or locally as needed.
➢ It should support multiple vendors and organizations in a value chain. It needs to handle
different types of hardware, software, operating systems, platforms, and also network
protocols. Organizations may also need to change their hardware and software over a period
of time.
➢ A system administration should be open ended in the sense that it should be able to add new
organizations and their infrastructure into the overall infrastructure.

E-BUSINESS APPLICATIONS
Characteristics of E-Business Applications

➢ Facilitates organizations
➢ Allows working closely with outsiders
➢ Creates value chain
➢ Helps increase efficiency
➢ Analyses customers’requirements
➢ Competitive in nature
➢ Reduces amount of programming
➢ Reduces time
➢ Allows to manage changes

Classification of E-Business Applications

Inbound Logistics: refers to the activities that help in receiving and storing raw materials and their
distribution to production as and when required.

Outbound Logistics: refer to the activities that help in storage and distribution of final, finished products.

Actual Operations: actual operations or processes that are performed on the raw material to produce
final products or services.

Sales and Marketing: involve discovering potential markets and customer needs, and formulating sales
plans accordingly in order to sell a product.

After Sales Services: managing/displaying technical specifications of a product or service, automatic

response generation, etc.

Human Resource Development: description of job profile, employment policy information, online
submission of employment application, handbooks, manuals, training and downloadable documents,
training software, employee directory, and maintenance related data.

Organisation Infrastructure: infrastructure does not comprise only technology, but the dynamic
interaction and supervision of business strategy, trained people, tools and practices, and the very culture
of the organization.

Technology Development: the activities involved can be collection of customer preference data and
demographic information, access tracking, data on competitors products, pricing, promotion strategies,
etc.

Procurement Management: research for new suppliers, suppliers’ stock list and pricing information,
conducting online bidding, order transmission, order confirmation, and processing of online payment.

Project Planning approach in E-Business Application Development

Planning

➢ In developing an e-business application system firstly one has to establish the vision behind the
business application and the website it will support, considering parameters such as time
management, human resources, financial resources, and risks involved.
➢ Electronic data exchange among customers and various business parties through the internet,
security of transmission of these data, and the graphical user interface (GUI). GUI makes the
business websites user friendly and more accessible to end users.
➢ Selection of the most appropriate technology amongst the alternatives available.

Requirement Analysis

Interviewing end users, having questionnaires completed by them, and representing these observations
with flow charts and data flow diagrams.

Development
A back end database and a server side scripting language have to be selected which may also depend on
the platform being used.

For example: if the file extension is .jpg or .htm , the server understands that no further action will be
required as it is a simple HTML file. However, if the extension is .php it understands that there will be
additional PHP instructions which are generally embedded into a set of HTML instructions. It sends the
resource to a PHP engine on the server which reads the PHP instructions and takes action accordingly. It
strips out the PHP instructions and finally sends the HTML file back to the server. The server then transmits
this as any other simple file to the client.

Implementation and Testing

Improper implementation or deployment of an application may lead to complications during subsequent

modification and maintenance. Following a systematic sequence of action to deploy a new internet
application helps in maintaining integrity among all the applications spread across a value chain and thus
offers reliability to the customers and other partners.

Change Management of E-Applications

Introducing new modules into an existing e-business application or changing and enhancing the
functionality in a complex and highly integrated web environment shortens the time available to carry
out the changes. This has a direct effect on the business factors such as profitability, customer satisfaction
and several other front and back office systems.

A change management solution that uses a proper infrastructure must have the following capabilities:

➢ A change management solution should be able to trace, combine, and execute the desired
changes across multiple platforms, applications, and machines.
➢ It should have a thorough understanding of all the heterogeneous business processes that a
change may effect.
➢ It should be able to acquire all the critical, important dependencies among various modules of the
integrated e-business application
➢ To ensure that the changes made are consistent, it will also need to create an integrated business
process that is capable of tracking the changes as they flow from one component of the system
to other.
➢ The solution needs to consider the changes with respect to the customers, production systems
and deployment.
➢ It should also be able to understand how the data, content, and program code create
dependencies across each area.

A good change management solution that provides all the aforementioned capabilities should pursue the
following step by step process:
Requirement gathering and analysis: the developer of a change management system should first
understand the company’s working environment, the actual requirement of change, the entities to be
effected, and the short term and long term objectives.

Technology solution suggestion: organization can suggest a suitable technology and process the solution
to accommodate the change.

Evaluation of technology and tools: evaluated by the organization against the requirements.

Implementation: implement the new change management process.

Educating: a training program may be designed and implemented subsequently to make the users aware
of the process.

ONLINE PAYMENT SYSTEMS

Traditional Payment Methods

➢ Cash
➢ Cheque
➢ Stored Value/Debit Cards
➢ Credit Cards

Terminologies associated with credit card

• Card Associations
• Issuing Bank
• Hybrids
• Acquiring Bank
• Interchange fee
• Acquirer fee
• Internet gateway service

➢ Digital Cash
➢ Digital Wallet
➢ Pay Pal
➢ Smart card

Performance Characteristics of Online Payment Systems

➢ Acceptability
➢ Anonymity
➢ Authentication
➢ Convertibility
➢ Efficiency
 ➢ Flexibility
➢ Security
➢ Reliability
➢ Scalability
➢ Usability

Classification of Online Payment Systems

Based on Value of transaction

Consumer payments- between Rs. 50 and Rs. 5000

Business payment- generally B2B type where amounts are greater than Rs. 5000

Micro payments- below Rs. 50

Based on the time the seller receives the money

Post payments: after the product or service has been delivered

Instant payment: seller receives the money immediately after processing the order

Pre-payment: sender receives the money as soon as an order is placed

UNIT 4

Security and Reliability of E-Business

E-Business Security Policy

➢ A secure state is one where the system is protected from any unauthorized access. A non-secure
state refers to a state where the system is vulnerable to attacks and no controls are present.

A typical e-business security policy should have:

➢ Clearly defined objectives and scope

➢ Details about security infrastructure
➢ Security management program
➢ Clear definitions and policies about privacy, censorship, and accountability
 ➢ Technology and usage guidelines for access controls, firewalls, internet usage, and use of security
technologies.
➢ Security audit policies
➢ Legal policies

Dimensions of E-Business Security

➢ Integrity: information displayed on the web or transferred as a message has not been altered in
any way by unauthorized persons or parties.
➢ Authenticity: genuineness of the identity of a person with whom a transaction or communication
is taking place.
➢ Non-repudiation: participants involved in an online transaction do not deny their role in a given
transaction.
➢ Privacy: information provided by a customer will be used in a controlled way.
➢ Availability: the site is available for use all the time.
➢ Confidentiality: only the authorized person can view the information or data.

Integrated Security Mechanism

➢ Front end security refers to the security that is offered while the customer is connecting to a site.
This security is provided through the following means:
• SSL/TLS
• Firewalls
• Cryptographic protocols
• Web based security servers
• Intrusion detection systems
• Integrity verification tools
➢ Authentication, authorization, availability, and confidentiality are the important issues that are
dealt with in front end security.
➢ Trusted Operating systems, component based security, and secured data handling is a part of mid
tier security.
➢ Back end security mainly deals with database security and storage level and information handling
related security.

Example: If a customer is interacting through a portal, front end technological security measures are used
for the purpose of protecting data, financial transactions, and credit card details. Mid tier security ensures
that this information is not lost during a transaction and the appropriate action is taken. The information
and the back end processing of information are protected through back end security.

Risks and Risk Assessment

➢ Risk is the probability of an unwanted event with perceived negative consequences.

➢ Controls are the means of managing or mitigating risks. It includes policies, procedures, practices,
and guidelines.
 ➢ Risk management rather deals with non-speculative risks that lead to loss. The objective is
elimination of risks when possible and reduction of those that cannot be eliminated.
➢ An organization should have a separate dedicated risk assessment function or delegate it to
another organization.
➢ Risks involved: A malicious user can log in without a valid account. The risks include access, use,
and deletion of data by an unauthorized user and in some cases even by authorized users
performing malicious acts. Such users can modify the content, upload malicious content or steal
the credentials of a user.
➢ Proper assessment of risk and implementation of relevant controls to mitigate the risk are
essential.
➢ It needs to be performed regularly and reviewed in context of new scenarios, experiences, and
technologies.

Risk Analysis

➢ Identification and documentation of all the information assets along with the owners of the
assets.
➢ Rank systems and assets, in terms of the criticality of the system to the organization.
➢ Listing of threats for each of these identified assets. A threat is a perceived possibility of an event
that may result in attack, loss of information, or failure of the system.
➢ Identify the vulnerabilities of each of the assets for every identified threat. Vulnerabilities suggest
the weaknesses of the system with reference to a particular threat. For example: weak password.
➢ Impact that the exploitation of a weakness may have on the assets availability, confidentiality, or
integrity.
➢ The probability of an event that may result in a threat needs to be assessed. For eg. There is a
very low probability that a tsunami may impact the availability of a system that is not located on
a sea shore.
➢ Complete analysis an pragmatic numbers help in determining the level of risk.

Information Classification

➢ Public Information: refers to the data or information that can be freely made available to the
masses without any implications.
➢ Internal Information: is meant only for internal use and external access to this information is
blocked. However, there are no serious consequences of this information being leaked.
➢ Confidential Information: is to be retained strictly within the company and there can be serious
consequences in case such information is leaked. Often it leads to financial losses.
➢ Secret Information: is suppose to be accessed only by authorized internal users and the secrecy
of this information is very critical for the organization.
➢ Restricted information: refers to the data that is meant only for certain individuals.
➢ Protected information: is not to be released to the masses while public information is the data
made available to everyone.
 ➢ Computer systems, especially systems on a network, have multiple entry points, such as virtual
private network (VPN), wireless access points, etc. This exposes the computer system to various
threats because of the possible use or copying of unknown software or accessing the system by
unprotected connections.

Computer Viruses, Worms, and Trojans

➢ A computer virus is a piece of code that replicated itself and infects/modifies other programs,
resulting in a change in the behavior that may be harmful to the overall system.
➢ Native email worms: associated with email messages
➢ Parasitic email worms: leverage transport the capabilities of emails.
➢ Self launching worms: capable of spreading to new systems and actively running systems.
➢ User launched worms: need user intervention.
➢ Hybrid worms: having more than one capability.
➢ Trojan: non replicating malware. It seems to perform a desirable function for the user but instead
it facilitates unauthorized access.

Other Threats

➢ Computer hacking refers to the unauthorized access of a system with the intention of stealing
information, fraud, or sabotage.
➢ Phishing is a fraudulent process to access sensitive information such as user name, credit card
details, password, etc.
➢ E-businesses should inform the users about their security policies and guidelines while using
classified information during any transaction or disclosure.

Intellectual Property Rights

➢ Patents, copyrights, etc are used to protect intellectual property and innovations.

Knowledge Management and Business Intelligence for Strategic E-Business

Knowledge Management Platform

➢ KM helps in the building and ensuring optimum usage of knowledge within and outside an
organization. IT enables knowledge codification, storage, and reuse.

The technical and non technical components of KM are as follows:

Document Management

Document management systems allow one to store documents, index them, and search through
them. Advanced document management systems also allow searches within the information, storage
in different formats, conversions, and optical character recognition.

Various Automation Processes

Based on the information transactions among different departments, objective being to improve the
pace and efficiency of knowledge transfer.

Intelligent Business Flow

It allows the flow of business information and knowledge intelligently to facilitate decision making in
business.

Work Flow

This is related to the business processes that are responsible for implementing the defined tasks in
the proper sequence, setting limits, reporting, and decision making for efficiency and to meet the
targets.

Decision Support System

Systems that are based on historical or past data and provide quantitative analysis to come up with
the guidelines for decision making.

Data Warehouses/Data Mining

Data warehouses are data repositories that help companies to mine the required data like sale in last
quarter, increase in sale over last five years, customers retained in last three years, etc and discover
patterns that help to forecast the business opportunities in terms of product associations, likings,
customer behavior, etc.

Intranet

A network that connects different departments and individuals machines in an organization, for
communication, knowledge transfer, and sharing.

Communication Platforms

Bulletin boards, chatting tools and packages, brainstorming enablers, messaging enablers to capture
tacit knowledge, shared workspaces, and web conferencing.

Knowledge and Process building tools and packages

Different data analysis and forecasting tools.

Data capturing and pattern analysis tools

Mathematical modeling tools which help to create intelligent systems and build knowledge, based on
past experiences, repetitive patterns, and anomalies.

Collaboration tools

Bulletin boards, emails, and shared information repositories.

Knowledge Management in IT Companies

➢ Actual knowledge is generated through the experience that has been gained. Knowledge that
is mutually shared among different processes or departments help in improving product and
services.
➢ In IT companies the developers, architects, researchers, and designers learn from
maintenance experience. Maintenance team learns from developers, architects, researchers,
and designers and sends its feedback.

Business and Intelligence

➢ An e-business economy requires intelligence which could be derived by relative information.

➢ An intelligent organization is always positioned to excel and satisfy the natural instinct to win
by making better decisions in lesser time.

Applications and Importance of Business Intelligence

➢ Business intelligence or BI is a broad category of applications and technologies meant to

collect, store, analyse, and provide access to business data that helps users in an organization
to make better decisions. BI systems include activities such as decision support system, online
analytical processing (OLAP), query and reporting, statistical analysis, business forecasting,
data warehousing, data mining and content, and knowledge management.
➢ In e-businesses, a collective intelligence is generated by gathering raw data, converting it into
information, analyzing it to create intelligence and distributing or sharing it among all
employees, managers, and decision makers throughout the value chain in the organization.
In almost every e-business such a collective intelligence has to be exploited in order to build
and strengthen the relationship with customers and partners, to reduce cost, and improve
the operational efficiency. However, it is not restricted to any particular business operation,
but applies to financial analysis, human resources, value chain management, marketing
campaign, production controls, etc.

Bringing Intelligence to Business

There are three ways in which the information in an organization can be controlled:

1. A traditional method is where information is available only to top executives. A dashboard is

designed as per the need.

2. All departments in an organization create their own information source and use it for themselves.

3. This method is applicable to all e-business organizations, where information is available to everyone
in an organization but in a supervised manner. Regardless, of the organization or the operation using
e-business intelligence, the key facilitator is the Web. Information need not end at the company’s
network firewall (using intranet). Using the extranet or internet, e-business intelligence can be
extended to customers, business partners, and suppliers.
 Evaluation and Audit of E-Business
Auditing an E-Business

E-business organizations have complex software systems, with hundreds of program running, and
hundreds of files with complex databases, which makes it impossible for auditors to check the system
in detail. Hence, an audit is generally performed based on a sample data, in order to meet the auditing
objectives, with reference to the interviews of a few users of the system.

Auditing Guidelines

They are composed of recommended course of action needed to perform a quality audit as follows:

➢ Evaluating and prioritizing action items

➢ Accuracy and reliability of audit findings
➢ Impartial and non-prejudiced judgement
➢ Scope and timelines of the audit
➢ Clarity, efficiency, and effectiveness of the audit.

At a very high level, e-business auditing guidelines can be mapped to four heads:

➢ General guidelines and framework for auditing

➢ Guidelines for financial auditing
➢ Guidelines for performance auditing
➢ Guidelines for corporate control

General guidelines for an e-business audit are as follows:

1. High level of quality should be maintained in terms of

• Significance and value

• Objectiveness and fairness in assessment
• Scope and completeness in planning
• Reliability and validity of the opinion
• Timeliness of auditing and reporting
• Clarity in presentation
• Efficiency in performance
• Effectiveness in terms of impact of results

2. Quality control should be developed and implemented in the respective phases

3. Standards should be followed while reporting an audit

4. A well-defined process should be followed for evaluation of the audit findings.

5. A fully documented audit plan must be prepared

6. The audit task plan should be reviewed

7. Auditor should ensure that

• Audit plan is known and understood by everyone involved

• There is a skill and task match
• There are no conflict of interests

8. Audit should be performed in accordance with the approved plan

9. Audit reporting should be clear, timely, and concise.

10. Careful review of draft report must be done

11. A conducive environment should be created for conducting the audit

12. A blue print of the system is necessary for a clear understanding of the expected system behavior.

Conducting E-Business Audit

An e-business audit starts with an analysis of the following aspects:

General business overview: An e-business auditor will need to understand the analysis of different
business components, the workings of the overall business system, scope of the business, and the
value delivered with reference to the expected value creation.

IT Infrastructure and architecture: Modern computer systems are designed and built using one of
several network architectures such as 2 tier, 3 tier, etc. Also the internet connectivity level.

Different processes and standards followed: Auditors need to understand security and risk
assessment standards followed.

Staff and management: Staff hierarchy, direct reporting structures, roles and responsibilities, etc.

Security devices, policies, architecture, and implementation: Security is ensured by awareness,

processes, and infrastructure.

Extended organization, service providers, and external devices used: Suppliers, intermediaries, etc.

Control: Control refers to a system that prevents, detects, and corrects unwanted events.
Implementation of reliable controls is required to keep things in place and make sure processes,
people and management are working effectively towards the business goal. Controls can be classified
into preventive controls, detective controls, and corrective controls. The following steps are taken
under this:

1. Steps to obtain clarity about controls and understanding of controls

2. Assessment tests of control

3. Tests to detect the irregularities in control

4. Review procedures

Verification/Checking of software and service quality characteristics

The quality characteristics of software include:

Functionality: the extent to which a software performs a function that is needed to satisfy the user
needs.

Reliability: the sustainability of software that provides a defined level of performance under stated
conditions for a specific time period.

Usability: the amount of effort needed to exploit the full functionality of software.

Maintainability: the effort required to maintain the software.

Portability: ease in changing the hardware, operating system, or database.

IBM came up with the concept of RAS which focuses on reliability, availability, and serviceability.

Risk Assessment

➢ There are security standards and risk assessment standards like ISO 17799, Information
Technology Infrastructure Library (ITIL), British Standards (BS 15000), etc.
➢ The standards used and general guidelines followed by an organization are considered by
auditors while forming an audit program.

Reporting

➢ An e-business audit report should cover IT functionality report, IT process auditing report, and
e-business process audit.
➢ The report must be organized under relevant heads such as customer interaction processes,
information gathering and analysis processes, delegation of authority, internal reporting,
escalation processes, financial processes, contracting processes, controls, etc.
➢ Audit reports help organizations identify the gaps and develop guidelines for bridging the
gaps observed during audit.

E-Business balanced scorecard

Kaplan and Norton(1996) proposed the balanced scorecard (BSC) method to measure the
performance and success of a business and also to overcome the weaknesses of traditional
measurement systems. It comprises of the following parameters:

Value Creation: It includes creating value through IT, processes and process innovations, and
creation of opportunities. Direct value creation is possible by making information available, providing
 decision support, and improving pace. Indirect value creation is achieved through impacting some
part of value chain or through cascade effect.

Customer and user satisfaction perspective: Measured using customer feedback, customer
retention, customer visits to the website, comparative use of the website, etc.

Internal perspective: Internal process efficiencies, knowledge management within the organization.

Financial perspective: Revenue, profit, expenses on infrastructure, ROI, reinvestment strategies,

financial growth, etc.

Learning and growth perspective: business growth analysis, infrastructure growth, financial growth,
resource growth, learning from incidence, history, and historical patterns.

FUTURE OF E-BUSINESS
New World of Enterprise E-Business
Next Generation of Enterprise E-Business

➢ ERP helps an organization to attain the intended efficiency, quickness, and responsiveness
needed to succeed in a competitive business environment.
➢ SCM or Value Chain Management is an inter-enterprise, cross functional system, which
integrates and automates business processes and relationships, among the organisation’s
suppliers, distributors, business partners, and customers. It helps an organization to build and
sell its products/services using a low cost, fast, and efficient network of business partners and
customers.
➢ A collaborative customer relationship management system is a future e-business process
which will prop up the collaboration of business partners, employees as well as the customers
in enhancing the customer relationship with the organization.
➢ More and more businesses are moving towards e-business in US, Europe, and in Asia with the
latter still being a major untapped marketplace for e-business.
➢ The foremost task will be to delineate the standards to make all these work together. The
responsibility of every business will be to define the infrastructure requirements on the basis
 of right architecture and interfaces, to deal with continuing evolution of the next generation
of e-businesses.

The Next Generation E-Business Infrastructure

➢ The infrastructure also has to ensure the compatibility with ongoing development of Internet
standards, interoperability with business partners and the customers.
➢ It should be able to present well-ordered system management with optimized performance
to handle the requirement of varying workloads.
➢ Technically, e-business application servers should also be able to provide ample choice in
selecting, building and deploying a variety of e-business applications to match with the
affordable cost, and extreme performance in reliability, security, and scalability.
➢ It will require a complete new level of connectivity which should support extraordinary level
of integration across an e-business organization’s value chain.
➢ Human Resources are another major concern. Getting experts in IT will not be easy and cost
effective.

NEW TECHNOLOGIES

➢ Evolving technology has revolutionized the speed of internet, downloads, and

communication, making online movie releases and book releases possible. Faster, cheaper,
and relatively more secured transactions have fuelled the growth of e-business.
➢ New technologies such as 3G, Web 3.0, advanced processors, and new frameworks promise
a better business experience. Technologies, such as cloud computing and 3G, have even
helped in changing the old paradigm of e-business.
➢ New paradigms such as collaborative on demand services, transaction based payments,
sharing of space and information along with processor and memory have changed the
business scenario.
➢ Next generation technologies will improve privacy protection, strengthen security, provide
personalized services and access controls, and change the face of the business and social
transactions.
➢ The explosion of social networking and their possible integration with business and
information transactions would help create a collaborative and integrated e-business
platform, thereby creating many more business opportunities.

Challenges and New Trends

➢ Prominent challenges are intellectual property related issues, regulatory policies, taxation
policies, and restriction of information access and censorship.
➢ The electronic acceptance of agreements still has numerous issues and IT Acts need to be
enhanced to deal with technological advancements.
➢ As per Narayan Murthy, “Technology will solve many social issues and irregularities in days
to come”.
Ethical and Regulatory Issues

➢ The protection of intellectual property through security mechanisms and legal infrastructure
remains a challenge for e-business.
➢ The management of electronic wastes and other waste material and the impact of huge data
centres on the environment.