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M8A Semester 4
M80039 eCommerce
Ass|gnment Set 1






Master of Business Administration-MBA Semester 4
eCommerce - MB0039
Assignment Set- 1

Question 1: ExpIain the framework of e-Commerce in detaiI.

Answer:
EIectronic Commerce Framework
A framework can be defined as a structure for supporting or attaching something else,
particularly a support that is used as the foundation for something being created. Hence, an
e-commerce framework comprises the set of infrastructure required for carrying out the e-
commerce business. This set of infrastructure typically includes the network requirements
and the different software applications that are for e-commerce.
The e-commerce vision summarised above assumes a series of essential infrastructure
services and values steady with a broad architectural framework. This framework must allow
flexibility, interoperability and directness necessary for the successful development of
electronic commerce. The e-commerce framework offers a set of options to the customers.
Most of the electronic commerce plans have different strategies for security and privacy,
their skill to deal with the payments, and their usability to different transactions. They also
vary in their business models. Such variations promote innovation and allows for supplier
and customer options. But yet, you need a broad framework to gain wide acceptance. This
includes the following requirements and peculiarities of carrying out various business forms
in this upcoming electronic environment.
InteroperabiIity: Electronic commerce is based on a common set of required services and
standards that allow interoperability. Service providers and application designers use these
services and standards as building blocks. They achieve the goals and objectives of e-
commerce by combining, enhancing and customising these building blocks as per the
requirements.
Maximum fIexibiIity for innovation: The innovation in e-commerce will grow and be
established in ways that are impossible to visualise. This will result in evolution of new
services and businesses. We can already see that many electronic marketplaces are giving
rise to new openings for new services and businesses. Existing services and products will be
specified and adapted. Hence, the electronic commerce framework plays a vital part in
adapting the changes and then later dealing with the new applications.
Information-intensive products: t is observed that the most important set of products that
are sold through e-commerce are the pure information products. For example: electronic
journals, catalogues, videos, interactive video games, software programs, electronic
coupons, and so on. They also include electronic keys to cars, hotel rooms, storage
sections, and airport boarding gates. Some of these products can be designed or modified
by a customer. For example, customers want their own selection of articles to be attached in
an electronic book, or modify their own clothing designs. This capability calls for a customer-
driven activity a design phase, to the purchase cycle. Hence, it is necessary to have all the
activities in the process of the transaction designing, customising, ordering, billing,
payment and distribution tightly integrated and happening simultaneously.
ew revenue coIIecting techniques: We already know about the traditional techniques of
revenue collection, for example, payment upon receipt, advance payment, and so on. At
present, electronic commerce supports more improved methods of revenue collection. For
example, an information product service provider will allocate the product broadly and then
charge on a usage basis which means charging the customer only when the information
is used. This information can be a software program, a digital record, or an electronic key
used to open and start a rental car.
Meterware is a new strategy implemented in recording and billing customers constantly
depending on their product usage. Along with Meterware, electronic cash and cheques also
help in gaining new customers and sharing products.
Legacy systems: The legacy systems that are prevailing in electronic commerce field
include mainframe-based agreement, paper cheques, and payment systems, and so on. An
electronic commerce infrastructure gains success only when it allows the user to easily shift
from traditional systems to innovative, electronic systems, and applications and processes.
Transaction devices: e-Commerce dealings include different kinds of legacy and recently
formed devices, media, and systems over which transactions take place. Hence, it is
necessary that e-commerce adapts the technologies and devices required for reaching and
maintaining the mass market.
We can conclude that an electronic commerce framework developed with all of these needs
and considerations in mind will form a strong basis for an extremely useful and effective
electronic commerce infrastructure.
SeIecting the best e-commerce framework
Deciding on the best e-commerce framework is one of the major challenges for any
organisation. The framework should be selected based on the three evaluation points:
Features.
Requirements.
Luxuries.
Features are those elements of the framework that make it more prominent and clear from
other offerings.
Requirements are the basic requirements of the framework that allow it to do its work. f one
among these is lost, then it becomes difficult to use a particular framework, even with the
presence of any other features.
Luxuries are the components whose presence is not so important, but they are required to
make the case for a framework that comes at a bonus price. The luxury components add
something extra to the system to make it worthy of the premium price. The three important
factors to look for in any
e-commerce framework are:
Template management.
Core framework functionality.
Search engine features.
The framework should be adaptable in order to be able to cope with future evolution of the
site and market. At the same time, it should be able to support the existing business and
make it as easy as possible.
You cannot create content that will be suitable for submission to search engines, unless you
achieve good integration with search engine optimisation functions. Failing to do so will lead
to your site creator spending considerable time preparing submission pages instead of
making use of that valuable time for extending the site.
So long as you can balance between the cost and the benefits, it is worth paying the extra
amount to have a framework that saves you from all that work involved in maintaining the
infrastructure and processing payments. The end result is profitability, as expensive manual
work is removed from the process.
EIectronic commerce and media convergence
By now you must be familiar with the e-commerce framework. Let us now discuss the role of
media convergence in e-commerce.
Media Convergence[3] is a process of interlinking of computing and information technology
organisations, telecommunication networks, and content providers from various media.
These media include journals, newspapers, music, television, radio, and entertainment
software. Media convergence conveys jointly the "three Cs and they are computing,
communications, and content.
Convergence happens at two major IeveIs:
1. Technologies: Creative content is transformed into industry-related digital forms for
delivery. This is done via broadband or wireless networks to exhibit on various computer or
computer-related devices and also on cellular telephones to personal digital assistants
(PDAs) to digital video recorders (DVRs).
2. ndustries: Companies that are spread all over the business spectrum starting from media
to telecommunications to technology, combine or create strategic agreements. The purpose
of these alliances is to expand new business models that can yield profit from the emerging
customer expectations of availability of content.
We all are aware that there is a rapid growth with respect to usage of electronic applications
and the internet and people, all over the world, have entered the digital age because of
technological development. Most of the media-related organisations are experimenting with
new openings and concerns afforded by what is termed as "convergence". The act of
combining together of different media and integrating new personalised services is both
inspiring and overpowering.
The implementation of high-quality computers, changing to digital platforms, and formation of
high-speed computer networks has helped us with new ways of doing things. The old
explanations that provided division between TV, Radio, Cable, Newspapers, and Films are
gone forever. During 1990's, there was evolution of ownership convergence which resulted
in creation of media-based multinational companies. For example, Disney, Viacom, Sony,
and so on. From the customer's perspective, the nternet has also changed our favourite
delivery systems, which include newspapers that provide video and TV that offer interactive
conversations, and radio that offers web-cams.
Media convergence has a major part to play in the field of e-commerce and information
technology. Media convergence is particularly a blending of television, personal computer,
and telecommunications. This helps in providing a high-speed nternet access, traditional
television programs and interactive services in a single box. The convergence at a
technological level will facilitate audio, video, and data to be conveyed to customers using a
single pipeline. This pipeline may be in the form of wire which could be cable or DSL, or may
be wireless. This will help the customers to not only access the nternet from a single box,
but also access high-speed networks through various access points including TVs, PCs,
mobile phones and other mobile devices, public booth, and home appliances.

Question 2: List the advantages and disadvantages of e-Commerce
Answer:
Advantages
With the nternet acting as an emerging technology, e-commerce is the most important
aspect that has gained more prominence in the recent times. Electronic commerce involves
execution of business via the nternet with the help of computers that are connected to each
other as a network. n simple words, e-commerce is a process of purchasing and selling of
products and services and funds transfer via digital interactions.
The advantages of e-commerce incIude:
e-Commerce helps people to run their businesses without any hurdles of time, distance, or
place. The users can access the internet at any time, be it day or night to carry out online
shopping.
The cost-of-sale for online shopping done through a web site is less as compared to the
shopping done via traditional means (retail, paper based). This is because there is no face-
to-face human interaction during the on-line electronic purchase process. Also, online
shopping is a faster and convenient mode of shopping.
e-Commerce is the cheapest means of performing business. Operational advantages of e-
commerce consist of reducing both the time and employees necessary for all the business
procedures.
e-Commerce is especially ideal for niche products. Customers for such products are
usually few, but in the vast market place, that is the nternet, even niche products could
generate considerable volume of sales.
- e-Commerce increases the sales income to the business.
- t helps in easy tracking of the customers' segments. mmediate worldwide sales existence
in quick time.
- t facilitates in opening the shop in any part of the world, independent of geographical
locations.
- t also aids in reducing customer support expenses through e-mail marketing and
customary or traditional newssheet.
- t also facilitates the customers to easily purchase their products via various payment
accesses.
- t helps in developing more shopping carts.
e-Commerce provides a lot of physical benefits from the customer's viewpoint by:
- Reducing customer's sorting out time
- Making better customer decisions
- Spending less time in resolving bills, demands, and order differences
- ncreasing opportunities for purchasing substitute products.
isadvantages
n the previous section, we discussed about some advantages of e-commerce. Let us now
discuss about disadvantages of e-commerce.
n e-commerce, anybody can easily start the business, irrespective of the fact if it is good or
bad. Also, there are many bad sites wherein customer's money is wasted.
e-Commerce cannot provide guarantee of product quality.
Mechanical breakdowns can cause unchangeable outcomes on the total processes.
Customer reliability is very crucial here, because there is less chance of direct customer to
company interactions in e-commerce.
e-Commerce sites, services, and payment accesses are always in danger as there are
many hackers looking for opportunities to get the access.
Some customers are uncertain of buying products online. For example, online furniture
businesses have been a failure as the customers would like to find the comfort level of a
costly item such as a sofa before buying it.
Some people consider shopping as a social experience. For example, some people prefer
to go to a shopping mall with family and friends and purchase products rather than online
shopping hence they may not like to buy online.
Things like food, jewellery, antique items and so on. can never be sold with e-commerce
technologies as it is impossible to check them from remove locations.
Many organisations face problems with hiring and maintaining employees with the
designing, technological, and business process skills necessary to create a successful e-
commerce presence.
t is impossible to totally remove frauds in the e-commerce transactions.
Cyber laws are not correctly followed strictly, and the existing ones are not clearly defined
in e-commerce.
The most important disadvantage of e-commerce is shipping, as it takes several days to
deliver physical products all over the world.
Shipping Costs More: The more the weight of the product, the more will be the cost for
shipping it.
Doubts and Fears: Some people are unaware of the awesomeness of online shopping.
They are also afraid of online shopping, as they have many doubts in their mind like if the
store is dependable or if the product they buy is of good quality.
nability to feel the physical: There is no opportunity provided in online shopping to touch or
feel the product. Hence, customers feel that purchasing products like apparels or furniture
online can be sometimes risky.
Question 3: Prepare a scenario on the organization having shopping cart
faciIity showing the advantages and disadvantages of having shopping cart
faciIity.

3807
Commerce software
The best example for e-commerce software is shopping cart software. Shopping cart acts as
a major factor that helps in distinguishing online and offline shopping. A shopping cart is the
major essential component for online shopping. t is a tool that facilitates your customers to
purchase your online products. Understanding and respecting the value of money and time
of your customers is the major requirement in creating shopping cart software. Hence, it is
necessary that you pay a special attention in setting up
e-commerce shopping cart software that is cost effective and that is capable of facing the
competitive e-commerce market. The shopping cart software must include the following
features:
Shopping cart made must include lesser production time and faster delivery.
Easily customisable shopping cart software and also cost reducing that helps in e-
commerce shopping cart software improvement.
No compromise on product quality in negotiation to have cost-efficient
e-commerce software within specific time.
Preserving online store or e-store with just one click log in validation.
Security of your site must be totally vaulted by Form Authentication and Authorisation.
Easy updates of the software when required.
The need for efficient shopping cart software has become prominent because of increasing
competition and changing market trends. A successful e-commerce solution usually has
more appealing and available features. You must be very thoughtful about budget and also
business requirements. Hence, an exciting and reasonable range of e-commerce solutions
must be developed that helps in gaining the desired productivity, appealing customer
service, reducing overheads, and profits.
There is a wide variety of e-commerce solutions available, which is used to build every store
that is imaginable, starting from a small boutique to an online mall.
The process of e-commerce solution includes the following phases:
Good interaction with your new visitors and regular customers.
Unbeaten advertising of your products.
Successful and safe process of business transactions.
Reduced operational expenses.
Promotion of your company's brand.
A quick construction and successful use of database-driven storefronts is the major step in
developing an e-commerce solution.
Due to recently advancing technologies and vast choice of capabilities, an e-commerce
solution is used to create an interactive e-commerce web site and a communicating store for
all businesses, starting from a small store to a huge online mall.
Question 4: Give exampIes for different modeIs of ecommerce and
expIain what is the benefit of that modeI in your exampIe.
Answer:
Business ModeIs
Let us now discuss the various business models that have emerged since the birth of e-
commerce.
Introduction to business modeIs
A business model can be defined as the particular way in which a business organisation
ensures that it generates income, one that includes the choice of offerings, strategies,
infrastructure, organisational structures, trading practices, and operational processes and
policies.
[1]
Developments in computing technology and communication systems have not only
created many new business opportunities, but they have also created new ways of doing
business. Now, let us discuss the most common business models in e-commerce.
The merchant
A merchant is a dealer of goods and services. The merchant provides the product
information on a website and he also gives an online ordering mechanism. Consumers can
select the products which they want to buy and place an order. The product price is either
fixed or negotiable and the customer can either collect the ordered products from the shop or
get it delivered. nfact, the merchant operates in almost the same way as a traditional 'brick-
and-mortar' shop-owner. This business model is most appropriate for dealing in physical
goods and services such as books, computers or a pizza delivery service. The only
advantage in this model is that the merchant can directly reach the end users and sell to
them without engaging wholesalers or retailers.
CIick-and-mortar merchants
Click-and-mortar shops combine a website with a physical store. The advantage with this
model is that they have a physical store to promote the website. n this model, consumers
can return unwanted or defective products simply by visiting the store's website instead of
mailing it to a web site operator.
BuiId to order merchants
Under this model, customers have the advantage of buying goods or products that are made
to order. Build to order merchants not only offer pre-manufactured or developed products for
sale, but they also offer customisation of products according to the requirements of the
customers. Customers can specify the features and benefits of the products that they require
and the product is assembled individually and shipped to the customer. This model is best
suited for electronic and computer products, which can be customised to requirements.
The service provider
For some services, like a pizza delivery service, where a pay-per-item type of payment is
followed, the merchant model is quite appropriate. However, many nternet-based services
cannot easily be offered this way. This is because, quite often, it is difficult to define the
"product" that is sold, or to set a price for this product, as they are information based. For
example, a news site offering the service of access to its archive, might find it difficult to set
a proper price for its services. To overcome this problem, e-commerce marketers offer
advertising-based access to their service. This way, they do not charge the end customers,
but recover the costs through revenue from the advertisers. However, this strategy does not
seem to be very popular, as only very few advertisement-driven sites are able to earn
sufficient income.
Subscription-based access
Under this model, businesses provide subscription-based access to their service. A user
usually pays a fixed amount per month or year and in return gets unlimited access to the
service. One more option would be to pay a monthly base fee and pay a surcharge for all
access beyond a certain limit. This model is most suitable for services like databases with
articles, news, and patents and online games or adult websites. However, this model has not
proved to be profitable, as users find their own ways to access the content without paying
the subscription. To overcome this problem, certain service providers make only some
portions of the articles available for preview. The customers get to read the complete articles
only after payment of the necessary charges.
Prepaid access
n this scheme, after paying certain amount of money users get access to the service for
certain amount of time. After the amount is spent, the user has to renew or prepay again for
further access. The best example for this business model is usage of smart cards.
The broker
Brokers create markets by bringing buyers and sellers together and helping them in
transactions. Brokers charge for every transaction, usually as a percentage of the price of
the transaction. Examples are classified ads, group buying and bounties.
The saIes representatives
Sales representative usually works on a basis of commission that for selling each item they
take commission from producer. On the web, this model is known as affiliate programs or
referral fees. n this someone creates a website on some specific topic and adds links to
products on a retailer site which are related to the topic, so that the visitors can buy those
products. For example, a music reviewer can add a link in a review to an online music store
where the users get an authority to order the CD being reviewed. f the user likes the review
then he can follow the link and buy the CD then the retailer pays a commission to the
reviewer for referring the site.
Anyone who can build a website can link to a product and if everything goes well, then they
can make money. This model describes the popularity and usage of the World-Wide Web.
The advertiser
Advertising driven sites are one of the key foundations of e-commerce. The principle behind
this is simple and well known. A site gives free access to some products and shows
advertisements on every page. When the user clicks on advertisement an advertisement
page appears. The advertiser has to pay the site operator for advertising the product.
Targeted advertising
We all know that an advertisement on the site will get high exposure because those
advertisements are targeted to the site visitors. While advertising on the net, it is possible to
target the advertisement to the purpose of the program for example, football games can
show billboards in the game to give a look of the real playing field. The site operator earns
more money by placing targeted advertisements.
Free access
Let us try to understand this by Iooking into some exampIes beIow:
Free web space providers usually provide advertising banners at the top or bottom of the
users' sites or as a separate, pop-up window.
Free nternet access providers show advertisements on the starting page so that the user
can have a look at the advertisements when they browse something or when they go online.
Advertisements and electronic greeting cards are also sent with a personal message.
From the above examples it is clear that in this model the users are given access to
something for free. And with this free access product, shops or sites are also advertised.
The auction room
This model follows the guidelines followed in an auction sale the only difference being that
the auction is carried on online. There are basically two types of auctions open auction and
reverse auction.
Open auction: n this, the product is repeatedly bid by the participants. The participant who
places the highest bid is awarded the product. Through networks such as the internet, it is
possible for many bidders to participate at the same time in one auction.
The participants of an online auction have to enter an initial bid, an amount with which to
increase the bid and a maximum amount. Whenever some other participant places a higher
bid, the system then automatically raises the bid with the indicated amount until any of the
bidders have won the auction.
Reverse auctions: n this, the price is initially set at a very high level and the price is dropped
at regular intervals. Participants can bid the price at which they want to buy and should also
know the fact that there may be chances of bidding by someone else at a higher price.
This model is well known for bidding for high-priced items like automobiles or airline tickets.
The virtuaI maII
A virtual mall is a site that hosts many retailers, service providers, agents and other
businesses. The virtual mall operator usually charges a fee for managing and maintaining
the retailers' shop and for including him in the site-wide inventory. Additionally, the virtual
mall operator may also charge a fee for every transaction the seller performs. Virtual malls
can operate within the framework of a larger site, such as a portal. We will be discussing
about the portals in the next sub section.
The virtual mall can act as a mediator between individual customer and the retailer, for
example guaranteeing the full refund if a merchant is unable to deliver the product on time.
The virtuaI community
A virtual community is a site which has a gathered group of users who all have interest on a
common topic and who work together and share their knowledge. Users feel highly loyal to
the site and always visit the site as this site is created because of their interest. This offers
possibilities for advertising.
A specialised type of virtual community is the knowledge network or expert site, where
people, layman and expert, share their expertise and experiences
[2]
. n these sites, users
can get their questions answered and they can even raise the topics for discussion. Example
of this type of community may be Usenet newsgroups.
A simple method to monitor a virtual community is to register for free access to the website.
This allows inter-session tracking of customers' site usage patterns and thus produces data
of higher value in targeted advertising promotions. Registration can be made more attractive
and interesting by giving limited access to unregistered users and by allowing the registered
users to modify the site after registration or by allowing them to participate in chat or
message boards.
The infomediary
An infomediary collects, analyses and sells information on customers and their buying
behaviour to other producers who want to know about these customers. nfomediary usually
offers something free for customers such as free internet access or free web access. This is
very useful as this allows the infomediary to control and observe the user's online activities.
The information which is collected by the infomediary is very important for marketing
purposes. Usually an infomediary makes money with an advertising-based model, in which
the advertisements are established by the information that the infomediary has gathered.
The infomediary model is helpful when it is used together with a virtual community model or
virtual mall, as these models offer the ability to collect essential information.
Question 5: Write short notes on
a. FaIse and maIicious sites
b. SteaIing visitor's credit card information
c. SteaIing customer's data from seIIing agent and internet
service providers
d. The use of cookies

Answer:
a. FaIse or maIicious web sites
The basic idea behind building the false or malicious web sites are for stealing visitors' Ds
and passwords, stealing credit card information, spying on a visitor's hard drive, uploading
files from a visitor's hard drive and so on.
Users should be careful from these kinds of websites and users should never reveal their
personal information like phone numbers, address and so on, to any such kind of websites.
Users should never reveal their credit or debit card numbers, login Ds, passwords and other
information.
b. SteaIing visitor's credit card information
Malicious web sites may also be built and temporarily termed as legal businesses for the
purpose of stealing visitor's credit card information. We can explain this with an example
consider a malicious web site which is built to sell and deliver a gift to anywhere in ndia on
Diwali. However, such sites vanish suddenly, and this is identified only after Diwali, with no
clue to where to find the site.
Such kinds of websites are just built to steal the visitor's credit card information. Setting up
such false Web sites to cheat users into passing along vital information like passwords or
credit card numbers is called spoofing.
c. SteaIing customer data from seIIing agents and internet service providers
Most of the customers who purchase goods and services on internet pay through their credit
cards or cyber cash. Such customers also need to take the support of their internet service
providers for accessing the internet. The credit card information is stored by the internet
service provider and selling agents and many times hackers are successful in breaking into
the systems of selling agents and internet service providers and obtain the information on
customers' credit cards.
d. The use of cookies
The use of cookies to get user information is a threat to the privacy of users. Cookies are
pieces of information that a web site collects and transfers to a visitor's hard drive for record
keeping purposes[1]. Java Script programs related with web sites record information
revealed by a visitor on request by the web browser. When a visitor visits any false or
malicious websites for the first time, many web sites ask visitors to register themselves with
the web site and when the visitors fill the information, it is recorded in a text (.txt) file along
with a registration number assigned by the site. This file is stored on the visitor's hard drive.
The Web site server also stores the registration number and some other information such as
the user D and password if the user gives all this information. When the user visits the site
again and again, the cookies record the details on the web links examined or clicked on into
the server.
Based on the web browser used, the cookies may be placed in a single file for different
websites. Cookies cannot be used for life long. Depending upon the objectives of the
website, cookies are assigned the expiration dates which may be of very short period or very
long period.
Recent versions of web browsers are designed in such a way that the user gets the authority
to accept or reject the cookies. This is done in order to provide privacy to the users. n the
recent versions users also have the authority to edit a cookie file to remove the cookies, so
that the user can visit web sites without any fear.
Question 6: escribe the risk management paradigm in brief

Answer:
Risk Management Paradigm
n the previous section, we discussed about the disaster recovery plan. n this section, let us
discuss about the risk management paradigm.
APRA nsight (2001) identifies that e-commerce poses a number of potential risks like
operational risks, reputation risks, outsourcing risks, strategic risks, legal risks, increased
liquidity risks, and narrowing of margins as shown in the figure 8.1
[7]

e-Commerce is highly vulnerable to operational risks, as it is dependent on the system's
reliability and integrity. Hence, security raises significant concerns. We all know that the web
is public, and anything published is technically accessible to everyone.
The public expects that a website should always be accessible 24X7 which can lead to
reputation risks. While there are many benefits from outsourcing, trust on third parties for
provisions of services, products and infrastructure also increases the risk.
Strategic risk arises from the rapidity of innovation in e-commerce and the considerable
costs included in new technologies.
ncreased liquidity risk may arise during transfer of funds between accounts and institutions
rapidly resulting in a virtual bank that runs fund transfers. The openness of the internet
creates a problem in which, customers can easily compare products and services. Most of
the risks are applicable to all organisations, which conduct e-commerce using a website.
This dimension of risk model is used to asses the perceptual differences in key stakeholders
in relation to risk in e-commerce systems.
[8]

Risk assessment
By now you must be familiar with the risk assessment as we had discussed it previously
under the key components of risk management section.
Risk assessment has become a critical task in risk management. Most of the organisations
face increased levels of risk almost everyday. These risks may occur from software
vulnerabilities hidden in the company's business technology systems, hackers and cyber
crooks who try to steal confidential information. Hence, risk assessment is essential in all
organisations and especially in organisations that conduct e-commerce business.
Risks can be assessed through the foIIowing simpIe equation:
Risk = Value of the asset x severity of the vulnerability x likelihood of an attack.
n the above equation, a weighting of 1-10 can be provided for each risk factor. t is easy to
arrive at an aggregate security risk assessment for any asset by multiplying the factors.
To explain this, let us take an everyday example. Assume that we have an e-commerce
server that performs 50 percent of all customer transactions for the organisation it is very
easy to exploit vulnerability.
Therefore, e-commerce server risk = 10 (Value of the asset) x 10 (Severity of the
vulnerability) x 10 (likelihood of an attack).
n the above example, the e-commerce server risk is 1000, which is the highest security risk
assessment possible. The company can then structure its security risk management policies
accordingly, by allotting more resources to overcome this risk.
ControI activities
n this section, let us discuss about the control activities of risk management in e-commerce.
Control activities in e-commerce are the rules and regulations, which assist in guaranteeing
that the orders of the management are satisfactorily carried out. e-commerce risk and control
activities are complex and evolving.
Control activities assure that the risk management plans are still valid and they are being
carried out well. The project team should always make sure that the assumptions are still
valid.
The project team must review the risks and probability for accuracy of all the e-commerce
businesses. The project manager must also review the actual project plan to find out
whether the original plan has been altered by hackers or not. At this point, they will be
tracking the project status or progress and they also verify whether it has been hacked.
The roIe of internaI controI in risk management
Technology has evolved in such a way that companies have started
e-commerce websites through the internet to sell their products and services to customers
and other businesses. e-Commerce business is a new form of business, which is prone to
many of the internal control of risks of traditional businesses.
nternal controls are techniques to safeguard companies from the employees' misuse of
financial and operational information.
[9]

Let us discuss the role of internal controls in various risks like information risk, website risk,
and financial risk.
Information risk: While doing business transactions in e-commerce, confidential information
from customers such as credit card numbers, e-mail addresses, and residential addresses
are collected. Companies implement internal controls to make sure that the internal
employees do not steal or reveal the confidential information to outsiders. This may create
the dangerous issue for the e-commerce company. nternal controls protect a company's
confidential information by using encrypted websites and electronic shopping carts, which
limits the employee access to information.
Websites risk: Protecting the company from internal and external risk is another internal
control risk for e-commerce companies. nternal control should daily test their websites to
check whether any virus has been entered in to their website or to know how vulnerable the
website is to hackers and how easily the internal employees can misuse the website
programs and functions. e-Commerce companies are normally operated only through the
internet, so any risk caused by external threats to the website's operation is a serious issue
for the company. f the website is attacked by any virus or any hacker, the then company's
name will be spoiled, which may reduce the number of customers visiting the website. This
risk may also help the competitors to increase their sales.
FinanciaI risk: e-Commerce companies also face financial risk even though they are
operated only through the internet. e-Commerce may face a lot of financial risk as it may find
difficulty in generating positive daily cash flow because of the fees involved with website
protection, hosting, e-shopping carts, and credit card companies. These fees are essential
for all the vendors of e-commerce companies and it cannot be avoided.
To overcome these financial risks, e-commerce companies must employ accountants or use
a public accounting firm to make sure that no internal waste of cash is going on. t should
also make sure that all expenses are relevant to the operations of the company.