Introduction to E-Commerce
Topic: Introduction t o E-Commerce
Introduction To E- Commer
- What is Commerce? - What is E-Commerce? - Different Definitions of E-Commerce - Scopes of E-Commerce - Difference of E-Commerce and Traditional Commerce - Benefits of E-Commerce - Types of E-Commerce
Topic: Introduction t o E-Commerce
Introduction To Commerce
Commerce is the exchange of something of alue !et"een t"o entities# That $something% may !e goods& ser ices& information& money& or anything else the t"o entities consider to ha e alue# Commerce is the central mechanism from "hich capitalism is deri ed#
Topic: Introduction to E-Commerce
What is %E-Commerce.?
There are many different understanding a!out E-Commerce# definitions and
'ccording to (rederic) *# +iggins and ,yeun-Su) +hee& a recent pilot sur ey sho"s that some practitioners and managers ie" E-Commerce --- !uying and selling goods and products o er internet# ,o"e er& researchers !elie e the E-Commerce practice should include a "ide ariety of presale and post-sale acti ities#
Topic: Definitions of E-Commerce
Different Definitions of Electronic Commer
Treese and Ste"art ga e their commerce as follo"s: %/ the use of the glo!al Internet for purchase and sale of goods and ser ices& including ser ice and support after the sale# The Internet may !e an efficient mechanism for ad ertising and distri!uting product information& !ut our focus is on ena!ling complete !usiness ie" of Internet-
Topic: Definitions of E-Commerce
Different Definitions of Electronic Commer
%/# Spea)ing the online !roadly& use electronic of in commerce and order financial
includes !usiness&
computing reser ation&
communication
technologies airline
processing& in entory management### ,istorically spea)ing& the !est )no"n idea in electronic commerce has !een Electronic Data Interchange 0EDI1/.
Topic: Definitions of E-Commerce
Different Definitions of Electronic Commer
Daniel 2inoli and Emma 2inoli ga e their Internet-!ased commerce as follo"s: ie" of
%/ This re olution is )no"n as electronic commerce& "hich is any purchasing or selling through an electronic communications medium# / Internet-!ased commerce& in general& and We!!ased commerce& in particular& are important su!disciplines of electronic commerce#.
Topic: Definitions of E-Commerce
Different Definitions of Electronic Commer
%Electronic commerce is the sym!iotic integration of communications& data management& and security capa!ilities to allo" !usiness applications "ithin different organi3ations to automatically exchange information related to the sale of goods and ser ices#.
Topic: Scope of E--Commerce
The Scope of Electronic Commerce
Electronic Commerce encompasses one or more of the follo"ing: •EDI •EDI on the Internet •E-mail on the Internet •Shopping on the World Wide We! •4roduct sales and ser ices on the We! •Electronic !an)ing or funds transfer •5utsourced customer and employee care operations
Topic: Introduction to E-Commerce
Differences !et"een Electronic Commerce and traditional commerce
The ma6or difference is the "ay information is exchanged and processed: •Traditional commerce: •face-to-face& telephone lines & or mail systems •manual processing of traditional !usiness transactions •indi idual in ol ed in all stages of !usiness transactions •E-Commerce: •using Internet or other net"or) communication technology •automated processing of !usiness transactions •indi idual in ol ed in all stages of transactions
Topic:Benefits of E-Commerce
Benefits of E- Commerce
Benefits to 5rgani3ations:
-2ar)et expansion to national and international mar)ets -+educed cost of creating& processing& distri!uting& storing and retrie ing paper !ased information - +educed in entories#0*ust-in 7time manufacturing1 - 'utomated !usiness processing - Cost-effecti e document transfer - +educed time to complete !usiness transactions& speed-up the deli ery time -Impro ed customer ser ice# -Increased producti ity
Topic:Benefits of E-Commerce
Benefits of E- Commerce
Benefits to Consumers:
-Tranactions can !e done 89 hrs a day& all year round and from any location - Customer has more choices - +apid inter-personal communications and information accesses - Wider access to assistance and to ad ice from experts - Sa e shopping time and money - (ast ser ices and deli ery
Topic:Benefits of E-Commerce
:imitations of E- Commerce
Technical :imitations:
-:ac) of security&relia!ility&standards -Insufficient !and"idth -+apid change in soft"are de elopment tools -Difficult to integrate the Internet and EC s;" "ith existing applications and data!ases -<enders re=uire special "e! ser ers and other infrastructures -Incompati!ility of certain operating systems "ith certain h;" or s;"#
Topic:Benefits of E-Commerce
:imitations of E- Commerce
>on-Technical :imitations:
-Cost and 6ustification -Security and pri acy -:ac) of trust and user resistance -5ther factors
Topic:Benefits of E-Commerce
(orces fueling E- Commerce
•Economic (actors •2ar)eting and Customer Interaction (orces •Technology and Digital Con ergence
Topic:Benefits of E-Commerce
Economic (orces
-+educed Cost -
" technological infrastructure -Internal Integration of operations -External Integration of operations
Topic:Benefits of E-Commerce
2ar)eting and Customer Interaction (orces
-Efficient 2ar)eting Channel -Target 2ar)eting -2ar)et E=uity -Customer +elations
Topic:Benefits of E-Commerce
Technology and Digital Con ergence
Con ergence of Content
-Convergence of different types of information -Information gathering, processing, manipulation distribution and
Con ergence of transmission -Con ergence of Communication
e=uipment -Con ergence of <oice and data net"or)s
TopicTypes of E-Commerce
Types of E- Commerce
B ?Business to Consumer 0B8C1 ?Business to Business 0B8B1 ?Consumer to Consumer 0C8C1 ?Consumer to Business 0C8B1 ?Business to ?o ernment 0B8?1 ??o ernment to B C C G
B2B C2B G2B
B2C C2C
B2G C2G
G
G2C G2G
Business-to-consumer E-commerce
On-line Retailer
Sh ip m en t
O rd e r
Or de
r
B
Sh ipm e
nt
Order
Shipment
B
B
B2C applications
• Offer directly to the customer an interface of activity
– Typical examples:
• Online book store (e ! ama"on com# • Online car purchasin! (e ! automall com# • Bookin! and purchase of airline tickets (e ! ryanair com#
• Correspond to retail sale • $ro%th of B2C applications thanks to &nternet • ' ne% kind of B2C applications are the Cybermalls
B2C applications:
advanta!es and disadvanta!es • 'dvanta!es:
– – – – – 'llo% company to extend existin! services to customers 'llo% company to increase its customers Offer a %ider choice and allo% cheaper prices (ay !ive to the company a %orld%ide visibility Online shops are accessible 2)h a day
• *isadvanta!es:
– +o% order conversion rates – ,i!h risk (see Cyberphobia)
Direct Business-to-Business Relationship
Shipment
Seller Supplier!
Buyer
Order
B2B applications
• -eali"e transactions needed to perform financial or commercial activities by companies over the &nternet • .ome typical applications:
– /0procurement – /0(arketplace
• The turnover is much !reater than that dealed %ith B2C applications
B2B applications:
advanta!es and disadvanta!es
• 'dvanta!es:
– ,elp to automate communications bet%een companies makin! them easier and 1uicker – 'llo% to cut prices drastically – ,elp in reducin! mistakes • *isadvanta!es: – Often need le!acy inte!ration
"ub-based Business-to-Business E-Commerce
.uppliers
er rd O
.uppliers
Orders
O
.uppliers
ent
Shipm ent
Shi pm
,ub (/lectronic (arket#
Or de r
er d Or
rs e rd
s
m Ship ent
Or
der
Or de r
Shipment
r de Or
Or r de
Buyers
Buyers
Buyers
Buyers
Buyers
Buyers
Consumer-to-consumer E-commerce
"ub
or Electronic mar#et!
S B S
Cash
B B S
sh Ca
sh Ca
$roducts shipped
cts u od ped r $ ip sh
ts uc od ped $r ip sh
C2C applications
• Concern the consumers %ho run ne!otations %ith other consumers sometimes utili"in! as intermediary a company
– /xamples:
• /bay • 'utotrader com
C2C applications:
advanta!es and disadvanta!es
• 'dvanta!es
– 'llo% consumers to interact directly amon! them – $ive to the consumers a ne% %ay of purchasin! and sellin! services and !oods
• *isadvanta!es
– +ittle earnin! capacity
B2$ applications
• Correspond to all kind of transactions bet%een company and public administrator • 2tili"ed mostly in the 2.'
(obile commerce applications
• Concern doin! businesses by means of mobile %ireless devices • Can be both B2B and B2C • ,ave a !ro%in! importance in the future of e0 commerce applications • 3ill introduce completely ne% forms of electronic commerce
– / ! /0tickets
• The development of such applications faces some of the !reatest challen!es in the security area to secure the trust of consumers
Topic:Benefits of E-Commerce
Impact of E- Commerce
Impro ing Direct 2ar)eting
-4roduct 4romotion ->e" Sales Channels -Direct Sa ings -+educed Cycle Time -Customer Ser ice -Brand or Corporate Image
Topic:Benefits of E-Commerce
Impact of E- Commerce
Transforming 5rgani3ations
-Technology and 5rgani3ational :earning -Changing >ature of Wor)
Transforming
->e" 4roduct Capa!ilities ->e" Business 2odels
Topic:Benefits of E-Commerce
Impact of E- Commerce
Impact on 2anufacturing
-2anufacturing systems are changing from mass production to demand-dri en - *ust 7In-time 2anufacturing -We!-!ased systems -(lexi!le sytems
Topic:Benefits of E-Commerce
Impact of E- Commerce
Impact on finance and 'ccounting:
-5n-line payments systems -Security in ol ed in electronic payment systems
Impact on ,+2& Training and Education
Kalakota and Whinston’s E-commerce framework Four key building blocks:
– Common business services infrastructure – Message and information distribution – Multimedia content and network publishing – he !nternet "infrastructure#
wo supporting pillars:
– $ublic policy "%governance&# – echnical standards
Topic:Benefits of E-Commerce
?eneric (rame"or) of E-commerce
Electronic commerce applications
$ublic $olicy% &egal and $rivacy issues
Common Business Services infrastructure *essaging and Information Distribution Infrastructure *ultimedia content and +et)or# $ublishing Infrastructure +et)or# Infrastructure
'echnical Standards (or Documents, Security, and net)or# $rotocols
Topic:Benefits of E-Commerce
E-commerce 'pplications
-Supply Chain 2anagement -<ideo-on-demand -4rocurement and purchasing -5n-line 2ar)eting and 'd ertising -,ome Shopping
Topic:Benefits of E-Commerce
Common Business Services infrastructure
he common business infrastructure for electronic commerce consists of four main elements:
–Security –Authentication –Encryption –Electronic ayments
Security
• • • • (a4or concern for doin! business on the &nternet Businesses feel vulnerable to attack /ncryption is used to help secure data ,TT5. (,TT5 %ith ..+# is used to encrypt data to ensure its inte!rity and safety
– .ecure .ockets +ayer (..+# is a standard for secure interactions use on the 3eb ..+6 uses a combination of private key encryption (usin! a one0time session key# and di!ital si!natures to enhance the security of transmission
• Concerns remain for e0commerce transactions since there are numerous examples of data and privacy issues
,uthentication
• 'uthentication is the security process of verifyin! that a user is %ho he or she says they are • 5ass%ords are the most common type of authentication
– &t is important that users understand stron! pass%ords
• *i!ital si!natures are no% !ainin! popularity for authenticatin! transmitted information
,uthentication% Digital Signatures
• *i!ital si!natures take the place of ordinary si!natures in online transactions to prove that the sender of a messa!e is %ho he or she claims to be • 3hen received6 the di!ital si!nature is compared %ith a kno%n copy of the sender7s di!ital si!nature • *i!ital si!natures are also sent in encrypted form to ensure they have not been for!ed
Encryption
• /ncryption systems translate data into a secret code (many types of encryption used# • /ncryption systems include ) main components:
– $lainte-t: the unencrypted messa!e – 'n encryption algorithm: that %orks like the lockin! mechanism to a safe – ' #ey that %orks like the safe7s combination – Cipherte-t is produced from the plaintext messa!e by the encryption function – Decryption is the same process in reverse (like a modulation8demodulation#6 but it doesn7t al%ays use the same key or al!orithm 5laintext results from decryption
Encryption 'echni.ues
• The t%o main encryption techni1ues no% in use (see fi!ure 9 :#:
– Symmetric encryption in %hich both sender and receiver use the same key – ,symmetric or public key encryption6 %hich uses t%o separate keys6 called public and private keys
Symmetric Encryption
• Symmetric or private #ey encryption6 uses the same al!orithm and key to both encrypt and decrypt a messa!e • ,istorically6 this is the most common encryption techni1ue • .ince the key must be distributed6 ho%ever6 it is vulnerable to interception This is an important %eakness of symmetric key encryption • */. uses symmetric encryption
,symmetric or $ublic /ey Encryption
• ' second popular techni1ue is asymmetric or public #ey encryption (5;/# • 5;/ is called asymmetric since it uses t%o different <one %ay= keys:
– a public key used to encrypt messa!es6 and – a private key used to decrypt them
• 5;/ !reatly reduces the key mana!ement problem since the private key is never distributed • 5$5 (pretty !ood privacy# is a popular form of 5;/ available as share%are
(igure 012 /ncryption
Electronic $ayments
• ' number of payment methods are used by businesses to make and receive payments on the &nternet • These methods are basically the e1uivalent of off0line payment methods • ,ere are a fe% of the most popular types:
– – – – >irtual Terminals Transaction 5rocessors &nternet Checkin! /lectronic ?unds Transfer (/?T#
Search Engines
• .earch en!ines are used to index the contents of the &nternet so that information about a specific topic can be located • (ana!ers should pay attention to search en!ines for t%o reasons:
– They provide useful and extensive access to information – 'nd6 they can provide the visibility that becomin! listed %ith them provides
• $oo!le6 founded in @AA@ by t%o .tanford 5h * students6 is the most popular search en!ine
3eb Services 4 $ersonali5ation
• ' %eb service is a standardi"ed %ay of inte!ratin! %eb0based applications
– Or!ani"ations can share data transparently – 3eb services are the basic buildin! blocks of the .O' (.ervice Oriented 'rchitecture# – They are excellent for inte!ratin! systems across or!ani"ational boundaries
• 5ersonali"ation is the <selective delivery of content and services to customers and prospective customers=
– Can offer customi"ed services to meet the past and future interests of customers
Topic:Benefits of E-Commerce
*essaging and Information Distribution Infrastructure • .econd buildin! block of supportin! frame%ork for e0commerce • &ncludes email6 instant messa!in!6 >oice over &5 (>o&5#6 point0to0point file transfers (?T5#6 and !roup%are • /0mail is still lar!est use in this area
– &.5 (&nternet .ervice 5rovider# connects the user to the &nternet
Topic:Benefits of E-Commerce
*ultimedia content • Third buildin! block of supportin! frame%ork for e0commerce &ncludes standards for various multimedia file types /xamples of materials transported in this %ay include:
– – – – – >ideo 'udio Text8/lectronic documents $raphics B 5hotos -ealtime8Con0realtime applications
Topic:Benefits of E-Commerce
+et)or# $ublishing Infrastructure
• ?ourth buildin! block of supportin! frame%ork for e0 commerce &ncludes data communications circuits over %hich information travels &ncludes:
– 5acket0s%itched net%orkin! (telephony is circuit0 s%itched# – 5ackets contain overhead information includin! addressin! – They are also routed6 like mail – 'll of this flo%s across &nternet backbones – Ce%er &nternet access technolo!ies include %ireless access6 cable access and *.+
Topic:Benefits of E-Commerce
$ublic $olicy
• 5ublic policy is one of t%o supportin! pillars for e0 commerce 5ublic policy issues include:
– – – – universal access6 privacy6 information pricin!6 information access
• 5rivacy issues include %hat information is private and8or %ho should have the ri!ht to use8sell information about &nternet users:
– -e1uestin! personal information on visitin! a %eb site – Creatin! customer profiles – +eavin! electronic footprints %hen visitin! a %eb site
Topic:Benefits of E-Commerce
'echnical Standards
• .tandardi"ation is the second supportin! pillar for e0 Commerce .tandards are critical for electronic interaction • Secure Electronic Transaction (./T# for secure payments of online credit card transactions is one of the most heavily promoted standards • Other application standards include file transfer protocol (?T5#6 hypertext transfer protocol (,TT5#6 simple net%ork mana!ement protocol (.C(5#6 post office protocol (5O5#6 and multimedia internet mail extensions ((&(/#
doc_215832128.ppt
Topic: Introduction t o E-Commerce
Introduction To E- Commer
- What is Commerce? - What is E-Commerce? - Different Definitions of E-Commerce - Scopes of E-Commerce - Difference of E-Commerce and Traditional Commerce - Benefits of E-Commerce - Types of E-Commerce
Topic: Introduction t o E-Commerce
Introduction To Commerce
Commerce is the exchange of something of alue !et"een t"o entities# That $something% may !e goods& ser ices& information& money& or anything else the t"o entities consider to ha e alue# Commerce is the central mechanism from "hich capitalism is deri ed#
Topic: Introduction to E-Commerce
What is %E-Commerce.?
There are many different understanding a!out E-Commerce# definitions and
'ccording to (rederic) *# +iggins and ,yeun-Su) +hee& a recent pilot sur ey sho"s that some practitioners and managers ie" E-Commerce --- !uying and selling goods and products o er internet# ,o"e er& researchers !elie e the E-Commerce practice should include a "ide ariety of presale and post-sale acti ities#
Topic: Definitions of E-Commerce
Different Definitions of Electronic Commer
Treese and Ste"art ga e their commerce as follo"s: %/ the use of the glo!al Internet for purchase and sale of goods and ser ices& including ser ice and support after the sale# The Internet may !e an efficient mechanism for ad ertising and distri!uting product information& !ut our focus is on ena!ling complete !usiness ie" of Internet-
Topic: Definitions of E-Commerce
Different Definitions of Electronic Commer
%/# Spea)ing the online !roadly& use electronic of in commerce and order financial
includes !usiness&
computing reser ation&
communication
technologies airline
processing& in entory management### ,istorically spea)ing& the !est )no"n idea in electronic commerce has !een Electronic Data Interchange 0EDI1/.
Topic: Definitions of E-Commerce
Different Definitions of Electronic Commer
Daniel 2inoli and Emma 2inoli ga e their Internet-!ased commerce as follo"s: ie" of
%/ This re olution is )no"n as electronic commerce& "hich is any purchasing or selling through an electronic communications medium# / Internet-!ased commerce& in general& and We!!ased commerce& in particular& are important su!disciplines of electronic commerce#.
Topic: Definitions of E-Commerce
Different Definitions of Electronic Commer
%Electronic commerce is the sym!iotic integration of communications& data management& and security capa!ilities to allo" !usiness applications "ithin different organi3ations to automatically exchange information related to the sale of goods and ser ices#.
Topic: Scope of E--Commerce
The Scope of Electronic Commerce
Electronic Commerce encompasses one or more of the follo"ing: •EDI •EDI on the Internet •E-mail on the Internet •Shopping on the World Wide We! •4roduct sales and ser ices on the We! •Electronic !an)ing or funds transfer •5utsourced customer and employee care operations
Topic: Introduction to E-Commerce
Differences !et"een Electronic Commerce and traditional commerce
The ma6or difference is the "ay information is exchanged and processed: •Traditional commerce: •face-to-face& telephone lines & or mail systems •manual processing of traditional !usiness transactions •indi idual in ol ed in all stages of !usiness transactions •E-Commerce: •using Internet or other net"or) communication technology •automated processing of !usiness transactions •indi idual in ol ed in all stages of transactions
Topic:Benefits of E-Commerce
Benefits of E- Commerce
Benefits to 5rgani3ations:
-2ar)et expansion to national and international mar)ets -+educed cost of creating& processing& distri!uting& storing and retrie ing paper !ased information - +educed in entories#0*ust-in 7time manufacturing1 - 'utomated !usiness processing - Cost-effecti e document transfer - +educed time to complete !usiness transactions& speed-up the deli ery time -Impro ed customer ser ice# -Increased producti ity
Topic:Benefits of E-Commerce
Benefits of E- Commerce
Benefits to Consumers:
-Tranactions can !e done 89 hrs a day& all year round and from any location - Customer has more choices - +apid inter-personal communications and information accesses - Wider access to assistance and to ad ice from experts - Sa e shopping time and money - (ast ser ices and deli ery
Topic:Benefits of E-Commerce
:imitations of E- Commerce
Technical :imitations:
-:ac) of security&relia!ility&standards -Insufficient !and"idth -+apid change in soft"are de elopment tools -Difficult to integrate the Internet and EC s;" "ith existing applications and data!ases -<enders re=uire special "e! ser ers and other infrastructures -Incompati!ility of certain operating systems "ith certain h;" or s;"#
Topic:Benefits of E-Commerce
:imitations of E- Commerce
>on-Technical :imitations:
-Cost and 6ustification -Security and pri acy -:ac) of trust and user resistance -5ther factors
Topic:Benefits of E-Commerce
(orces fueling E- Commerce
•Economic (actors •2ar)eting and Customer Interaction (orces •Technology and Digital Con ergence
Topic:Benefits of E-Commerce
Economic (orces
-+educed Cost -
" technological infrastructure -Internal Integration of operations -External Integration of operationsTopic:Benefits of E-Commerce
2ar)eting and Customer Interaction (orces
-Efficient 2ar)eting Channel -Target 2ar)eting -2ar)et E=uity -Customer +elations
Topic:Benefits of E-Commerce
Technology and Digital Con ergence
Con ergence of Content
-Convergence of different types of information -Information gathering, processing, manipulation distribution and
Con ergence of transmission -Con ergence of Communication
e=uipment -Con ergence of <oice and data net"or)s
TopicTypes of E-Commerce
Types of E- Commerce
B ?Business to Consumer 0B8C1 ?Business to Business 0B8B1 ?Consumer to Consumer 0C8C1 ?Consumer to Business 0C8B1 ?Business to ?o ernment 0B8?1 ??o ernment to B C C G
B2B C2B G2B
B2C C2C
B2G C2G
G
G2C G2G
Business-to-consumer E-commerce
On-line Retailer
Sh ip m en t
O rd e r
Or de
r
B
Sh ipm e
nt
Order
Shipment
B
B
B2C applications
• Offer directly to the customer an interface of activity
– Typical examples:
• Online book store (e ! ama"on com# • Online car purchasin! (e ! automall com# • Bookin! and purchase of airline tickets (e ! ryanair com#
• Correspond to retail sale • $ro%th of B2C applications thanks to &nternet • ' ne% kind of B2C applications are the Cybermalls
B2C applications:
advanta!es and disadvanta!es • 'dvanta!es:
– – – – – 'llo% company to extend existin! services to customers 'llo% company to increase its customers Offer a %ider choice and allo% cheaper prices (ay !ive to the company a %orld%ide visibility Online shops are accessible 2)h a day
• *isadvanta!es:
– +o% order conversion rates – ,i!h risk (see Cyberphobia)
Direct Business-to-Business Relationship
Shipment
Seller Supplier!
Buyer
Order
B2B applications
• -eali"e transactions needed to perform financial or commercial activities by companies over the &nternet • .ome typical applications:
– /0procurement – /0(arketplace
• The turnover is much !reater than that dealed %ith B2C applications
B2B applications:
advanta!es and disadvanta!es
• 'dvanta!es:
– ,elp to automate communications bet%een companies makin! them easier and 1uicker – 'llo% to cut prices drastically – ,elp in reducin! mistakes • *isadvanta!es: – Often need le!acy inte!ration
"ub-based Business-to-Business E-Commerce
.uppliers
er rd O
.uppliers
Orders
O
.uppliers
ent
Shipm ent
Shi pm
,ub (/lectronic (arket#
Or de r
er d Or
rs e rd
s
m Ship ent
Or
der
Or de r
Shipment
r de Or
Or r de
Buyers
Buyers
Buyers
Buyers
Buyers
Buyers
Consumer-to-consumer E-commerce
"ub
or Electronic mar#et!
S B S
Cash
B B S
sh Ca
sh Ca
$roducts shipped
cts u od ped r $ ip sh
ts uc od ped $r ip sh
C2C applications
• Concern the consumers %ho run ne!otations %ith other consumers sometimes utili"in! as intermediary a company
– /xamples:
• /bay • 'utotrader com
C2C applications:
advanta!es and disadvanta!es
• 'dvanta!es
– 'llo% consumers to interact directly amon! them – $ive to the consumers a ne% %ay of purchasin! and sellin! services and !oods
• *isadvanta!es
– +ittle earnin! capacity
B2$ applications
• Correspond to all kind of transactions bet%een company and public administrator • 2tili"ed mostly in the 2.'
(obile commerce applications
• Concern doin! businesses by means of mobile %ireless devices • Can be both B2B and B2C • ,ave a !ro%in! importance in the future of e0 commerce applications • 3ill introduce completely ne% forms of electronic commerce
– / ! /0tickets
• The development of such applications faces some of the !reatest challen!es in the security area to secure the trust of consumers
Topic:Benefits of E-Commerce
Impact of E- Commerce
Impro ing Direct 2ar)eting
-4roduct 4romotion ->e" Sales Channels -Direct Sa ings -+educed Cycle Time -Customer Ser ice -Brand or Corporate Image
Topic:Benefits of E-Commerce
Impact of E- Commerce
Transforming 5rgani3ations
-Technology and 5rgani3ational :earning -Changing >ature of Wor)
Transforming
->e" 4roduct Capa!ilities ->e" Business 2odels
Topic:Benefits of E-Commerce
Impact of E- Commerce
Impact on 2anufacturing
-2anufacturing systems are changing from mass production to demand-dri en - *ust 7In-time 2anufacturing -We!-!ased systems -(lexi!le sytems
Topic:Benefits of E-Commerce
Impact of E- Commerce
Impact on finance and 'ccounting:
-5n-line payments systems -Security in ol ed in electronic payment systems
Impact on ,+2& Training and Education
Kalakota and Whinston’s E-commerce framework Four key building blocks:
– Common business services infrastructure – Message and information distribution – Multimedia content and network publishing – he !nternet "infrastructure#
wo supporting pillars:
– $ublic policy "%governance&# – echnical standards
Topic:Benefits of E-Commerce
?eneric (rame"or) of E-commerce
Electronic commerce applications
$ublic $olicy% &egal and $rivacy issues
Common Business Services infrastructure *essaging and Information Distribution Infrastructure *ultimedia content and +et)or# $ublishing Infrastructure +et)or# Infrastructure
'echnical Standards (or Documents, Security, and net)or# $rotocols
Topic:Benefits of E-Commerce
E-commerce 'pplications
-Supply Chain 2anagement -<ideo-on-demand -4rocurement and purchasing -5n-line 2ar)eting and 'd ertising -,ome Shopping
Topic:Benefits of E-Commerce
Common Business Services infrastructure
he common business infrastructure for electronic commerce consists of four main elements:
–Security –Authentication –Encryption –Electronic ayments
Security
• • • • (a4or concern for doin! business on the &nternet Businesses feel vulnerable to attack /ncryption is used to help secure data ,TT5. (,TT5 %ith ..+# is used to encrypt data to ensure its inte!rity and safety
– .ecure .ockets +ayer (..+# is a standard for secure interactions use on the 3eb ..+6 uses a combination of private key encryption (usin! a one0time session key# and di!ital si!natures to enhance the security of transmission
• Concerns remain for e0commerce transactions since there are numerous examples of data and privacy issues
,uthentication
• 'uthentication is the security process of verifyin! that a user is %ho he or she says they are • 5ass%ords are the most common type of authentication
– &t is important that users understand stron! pass%ords
• *i!ital si!natures are no% !ainin! popularity for authenticatin! transmitted information
,uthentication% Digital Signatures
• *i!ital si!natures take the place of ordinary si!natures in online transactions to prove that the sender of a messa!e is %ho he or she claims to be • 3hen received6 the di!ital si!nature is compared %ith a kno%n copy of the sender7s di!ital si!nature • *i!ital si!natures are also sent in encrypted form to ensure they have not been for!ed
Encryption
• /ncryption systems translate data into a secret code (many types of encryption used# • /ncryption systems include ) main components:
– $lainte-t: the unencrypted messa!e – 'n encryption algorithm: that %orks like the lockin! mechanism to a safe – ' #ey that %orks like the safe7s combination – Cipherte-t is produced from the plaintext messa!e by the encryption function – Decryption is the same process in reverse (like a modulation8demodulation#6 but it doesn7t al%ays use the same key or al!orithm 5laintext results from decryption
Encryption 'echni.ues
• The t%o main encryption techni1ues no% in use (see fi!ure 9 :#:
– Symmetric encryption in %hich both sender and receiver use the same key – ,symmetric or public key encryption6 %hich uses t%o separate keys6 called public and private keys
Symmetric Encryption
• Symmetric or private #ey encryption6 uses the same al!orithm and key to both encrypt and decrypt a messa!e • ,istorically6 this is the most common encryption techni1ue • .ince the key must be distributed6 ho%ever6 it is vulnerable to interception This is an important %eakness of symmetric key encryption • */. uses symmetric encryption
,symmetric or $ublic /ey Encryption
• ' second popular techni1ue is asymmetric or public #ey encryption (5;/# • 5;/ is called asymmetric since it uses t%o different <one %ay= keys:
– a public key used to encrypt messa!es6 and – a private key used to decrypt them
• 5;/ !reatly reduces the key mana!ement problem since the private key is never distributed • 5$5 (pretty !ood privacy# is a popular form of 5;/ available as share%are
(igure 012 /ncryption
Electronic $ayments
• ' number of payment methods are used by businesses to make and receive payments on the &nternet • These methods are basically the e1uivalent of off0line payment methods • ,ere are a fe% of the most popular types:
– – – – >irtual Terminals Transaction 5rocessors &nternet Checkin! /lectronic ?unds Transfer (/?T#
Search Engines
• .earch en!ines are used to index the contents of the &nternet so that information about a specific topic can be located • (ana!ers should pay attention to search en!ines for t%o reasons:
– They provide useful and extensive access to information – 'nd6 they can provide the visibility that becomin! listed %ith them provides
• $oo!le6 founded in @AA@ by t%o .tanford 5h * students6 is the most popular search en!ine
3eb Services 4 $ersonali5ation
• ' %eb service is a standardi"ed %ay of inte!ratin! %eb0based applications
– Or!ani"ations can share data transparently – 3eb services are the basic buildin! blocks of the .O' (.ervice Oriented 'rchitecture# – They are excellent for inte!ratin! systems across or!ani"ational boundaries
• 5ersonali"ation is the <selective delivery of content and services to customers and prospective customers=
– Can offer customi"ed services to meet the past and future interests of customers
Topic:Benefits of E-Commerce
*essaging and Information Distribution Infrastructure • .econd buildin! block of supportin! frame%ork for e0commerce • &ncludes email6 instant messa!in!6 >oice over &5 (>o&5#6 point0to0point file transfers (?T5#6 and !roup%are • /0mail is still lar!est use in this area
– &.5 (&nternet .ervice 5rovider# connects the user to the &nternet
Topic:Benefits of E-Commerce
*ultimedia content • Third buildin! block of supportin! frame%ork for e0commerce &ncludes standards for various multimedia file types /xamples of materials transported in this %ay include:
– – – – – >ideo 'udio Text8/lectronic documents $raphics B 5hotos -ealtime8Con0realtime applications
Topic:Benefits of E-Commerce
+et)or# $ublishing Infrastructure
• ?ourth buildin! block of supportin! frame%ork for e0 commerce &ncludes data communications circuits over %hich information travels &ncludes:
– 5acket0s%itched net%orkin! (telephony is circuit0 s%itched# – 5ackets contain overhead information includin! addressin! – They are also routed6 like mail – 'll of this flo%s across &nternet backbones – Ce%er &nternet access technolo!ies include %ireless access6 cable access and *.+
Topic:Benefits of E-Commerce
$ublic $olicy
• 5ublic policy is one of t%o supportin! pillars for e0 commerce 5ublic policy issues include:
– – – – universal access6 privacy6 information pricin!6 information access
• 5rivacy issues include %hat information is private and8or %ho should have the ri!ht to use8sell information about &nternet users:
– -e1uestin! personal information on visitin! a %eb site – Creatin! customer profiles – +eavin! electronic footprints %hen visitin! a %eb site
Topic:Benefits of E-Commerce
'echnical Standards
• .tandardi"ation is the second supportin! pillar for e0 Commerce .tandards are critical for electronic interaction • Secure Electronic Transaction (./T# for secure payments of online credit card transactions is one of the most heavily promoted standards • Other application standards include file transfer protocol (?T5#6 hypertext transfer protocol (,TT5#6 simple net%ork mana!ement protocol (.C(5#6 post office protocol (5O5#6 and multimedia internet mail extensions ((&(/#
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