CONTENTS Sno Description Author Vetter Pages 1. Introduction To E-Commerce Dr. Anil Khurana 35 2. Framework Of E-Commerce Prof. Mukesh Prof. 23 Dhunna Dharmender 3. Internet Service Provider Dr. Anil Khurana 25 4. Internet And World Wide Web Dr. Anil Khurana 23 5. Electronic Payment Systems Prof. Mukesh Prof. 42 Dhunna Dharmender 6. E-Commerce And Banking Industry Dr. Pardeep Dr. Anil 22 Ahlawat Khurana 7. E-Commerce And Retail Industry Dr. Pardeep Dr. Anil 19 Ahlawat Khurana 8. Electronic Commerce And Online Dr. Pardeep Dr. Anil 23 Publishing Ahlawat Khurana 9. Digital Copyright Prof. Mukesh Prof. 21 Dhunna Dharmender 10. Intranet And Supply Chain Management Prof. Mukesh Prof. 31 Dhunna Dharmender 11. Intranets And Customer Asset Management Dr. Pardeep Dr. Anil 25 Ahlawat Khurana 12. Intranet And Manufacturing Dr. Pardeep Dr. Anil 27 Ahlawat Khurana 13. Intranet And Corporate Finance Dr. Pardeep Dr. Anil 27 Ahlawat Khurana 14. The Corporate Digital Library Dr. Anil Khurana 35 LESSON: 1 INTRODUCTION TO E-COMMERCE Subject: E-Commerce Paper Code: MM-409/IB-419 Author: Dr. Anil Khurana Vetter : STRUCTURE 1.0 Objectives 1.1 Introduction 1.2 Definition 1.3 Features of E-commerce 1.4 Interdisciplinary Nature of Electronic Commerce 1.5 Levels of E-commerce 1.6 SWOT Analysis 1.7 Future of E-Commerce 1.8 Benefits of E-Commerce a. Benefits to Organizations b. Benefits to Customers c. Benefits to Society d. Miscellaneous 1.9 Limitations a. Non-Technical b. Technical 1.10 Summary 1.11 Keywords 1.12 Self Assessment Questions 1.13 Suggested Readings 1 1.0 OBJECTIVE E-commerce is changing the way of doing business. The objective of this chapter is to get the students acquainted with the basic concept of E-commerce. This chapter highlights the basic elements e-commerce, the difference between traditional and electronic business. After reading this chapter, you will be able to: (cid:190) Describe the concept of E-commerce (cid:190) Explain different levels of E-commerce (cid:190) Analyze the SWOT of E-commerce (cid:190) Identify the different forces that drive the e-commerce. 1.1 INTRODUCTION In the past few years, enterprises across the globe have experienced significant changes in their business information system. Huge investments were made in enterprise resource planning system implementations but still they struggle to get timely information that is needed to make effective business decision and to ensure continuous growth of enterprises. Placing "e" in front of any process or function seemed to be the magic prescription for never ending story of success and rapid returns for enterprises. E- business, e-procurement, e-sales, e-payment, e-banking, e-CRM, e-CAD, e-delivery are just a few. Internet, for example is becoming one of the most popular medium in transmitting various data. Users can find any kind of information within a shorter time compared with conventional method that consumes more time. The emergence of the Internet through out the world has been contributing such a variety medium in doing business as well as people lifestyle. In fact, Internet is the essential prerequisite for the existence of E- commerce. Electronic commerce or e-commerce has been defined as the ability to perform transactions involving the exchange of goods or services between two or more parties using electronic tools and technique. The explosion of E-commerce has created new phenomena in our lifestyle especially in shopping 2 activities. Consumers can easily buy products or services like magazines and airlines tickets via Internet. 1.2 DEFINITION The word commerce is the basic concept for electronic commerce, pertaining to buying and selling of goods while ‘commercial’ denotes business practice and activities intended to make profits. Electronic commerce, like any other business, deals with the exchange of money for soft or hard goods and services. Kalakota and Whintons in 1997 defined the term E-commerce from different perspectives. These perspectives are: • Communication • Business Process • Service • Online Communication Perspective: According to this perspective, E-commerce is the delivery of information, product/services or payments over tele-communication channels, computer networks or any other electronic mode of communication. Business Process Perspective: This says that E-commerce is the application of technology towards the automation of business transactions and work flow. Service Perspective: E-commerce is defines as a tool that addresses the desire of firms, consumers and management to cut service cost while improving the quality of goods/services and increasing the speed of service delivery. Online Perspective: E-commerce provides the capability of buying and selling products and information on the internet and other online services. 3 The term commerce is treated as transaction between business partners. Therefore, the term e-commerce seems to fairly narrow to people. Thus some time we use the term e- business. It is a broader definition of e-commerce. There is confusion among the consultants and the academicians over the use of this term. Some think that e-commerce encompasses all world of electronically based organizational activities that support a firm’s market exchanges – including a firm’s entire information system’s infrastructure. On the other hand, some argue that e-business encompasses the entire world of internal and external electronically based activities including e-commerce. “E-commerce has the potential to unleash enormous savings and business efficiencies, but the practicalities remain elusive. How will e-commerce change the global planning and purchasing of transport and logistics in the supply chain? Logistics has been described as the key enabler for e-business – but how can individual logistics and transport companies ensure that they benefit from, rather than perish in, the e-commerce revolution?” Electronic Commerce (e-commerce) is electronic business. It’s using the power of computers, the Internet and shared software to send and receive product specifications and drawings; bids, purchase orders and invoices; and any other type of data that needs to be communicated to customers, suppliers, employees or the public. E-commerce is the new, profitable way to conduct business which goes beyond the simple movement of information and expands electronic transactions from point-of-sale requirements, determination and production scheduling, right through to invoicing, payment and receipt. E-commerce uses key standards and technologies including Electronic Data Interchange (EDI), Technical Data Interchange (TDI), Hypertext Mark- up Language (HTML), Extensible Mark-up Language (XML), and the Standard for Exchange of Product model data (STEP). E-commerce is made possible through the expanded technologies of the Internet, the World Wide Web, and Value-Added Networks. 4 The Internet is a world wide collection of computer networks, co-operating with each other to exchange data using a common software standard. Through telephone wires and satellite links, Internet users can share information in a variety of forms. The size, scope and design of the Internet allows users to connect easily through ordinary personal computers and local phone numbers, exchange electronic mail (E-mail) with friends and colleagues with accounts on the Internet, post information for others to access, and update it frequently, access multimedia information that includes sound, photographic images and even video, and access diverse perspectives from around the world. An additional attribute of the Internet is that it lacks a central authority—in other words, there is no "Internet, Inc." that controls the Internet. Beyond the various governing boards that work to establish policies and standards, few rules and answers to no single organization bind the Internet. Different people use different terminology such as 'electronic trading' 'electronic procurement' 'electronic purchasing' or 'electronic marketing'. From the above definition, we can conclude that electronic commerce is often used in a much broader sense, to mean essentially the same as 'electronic business'. In other words e-commerce includes purchases of goods, services and other financial transactions in which the interactive process is mediated by information or digital technology at both locationally separate, ends of the interchange. Here 'transactions' include both specification of goods and service required and commitment to buy. E-commerce transaction model can be in terms of business to business (B2B), business to customer (B2C) or customer to customer (C2C). 1.3 FEATURES OF E-COMMERCE TECHNOLOGY Electronic Commerce means better business communication and data interchange information is essential for every and any business. The quality and quantity of information which a business delivers to customers or use this information to make decisions can determine just how competitive the business is. 5 A company already may be using a number of electronic based tools to help acquire and extend information and communication needs. These may include personal computers, word processors, courier, facsimile machines, telex services, cellular phones, pagers and more. Unfortunately, many of today's communication tools are not really upto the speed of today's business needs, and can actually create barriers to achieving the goals set on the basis of strategies formulated by a company. For instance, postal facilities can keep business waiting for information for days or even weeks. Overnight couriers may save time but can be an expensive proportion. Traditional telex and fax is quick but costly and communicating by telephone can become an endless game of tag. Now a business can avoid these problems by using e-commerce which is fast, cost efficient, time saying and easy to use -i.e., economic tangibility and good business generation. Electronic business can result in better transactions, wide market coverage by offering the benefits of speed, convenience, being cost effective, timeliness, high profit margins, instant customer relations, no loss of customers, impact and control- all are a fraction of the past traditional business methods. A concern can do everything it can to run its business efficiently and profitably. Application of electronic operations to commercial activities means better business solutions. It greatly facilitates a firm to make better decisions, sale forecasts, prices and other valuable information can be sent and received instantaneously. A business will always have the information it needs faster, easier and more completely in the new system of communication than ever before. This enables firms to have an edge over competitors by informing, following up and requesting information faster and easier to customers. 6 Another feature is that it helps to maintain greater control, at work, home or while traveling, communicate with any business partner or firm, anywhere instantly. Improve Responsiveness How does e-commerce help business? It helps by improving responsiveness to market conditions and customer preferences. Every business must know how important timing is to marketing and selling products. Timing is important to cater to the demands of customers. If distributors, dealers and sales force do not get the right information at the right time, there will be a financial crisis as well as losing valuable customers. E-commerce network enables a company to implement marketing programmes with greater precision such as : • Pre-empt competitiveness with a change in marketing tactics before they can react. • Improve responsiveness by revising price change and marketing programmes as and when required. Expedites and Streamlines Reporting It has been an experience in conventional commercial practices with factors like delays and ineffectiveness in reporting systems crippling effectiveness. Responsive, timely information flows from sound management systems. Electronic commerce improves delivery and distribution both within and outside organisations. The benefits are: • Stored lists of key recipients facilitate distribution. • Electronic delivery time. Coordinates Sales Efforts Some marketing studies reveal that most sales people spend nearly 75 per cent of their time on the roads, relying heavily on telephone calls for contact with their head officers 7 and customers. Telephone tag makes an endless frustrating game out of tracking down leads and following up to authenticate sales calls. In addition, misplaced or undelivered information results in low sales records. Other benefits of electronic business are: • Eliminating telephone tag. • Sending and receiving message at convenience. • Linking sales team numbers to gather, including international representatives, and • Closing sales without delays. Effectiveness and Efficiency Electronic commerce can increase the efficiency and effectiveness of public relation programmes, broadcast press releases, financial updates and other corporate communications. Copy reviews and approvals are expedited by circulating instant messages to key internal and external contacts. Close Contact with Clients In any business where maintaining close contact with customers is a priority consideration, electronic business can increase responsiveness of the company' and ensure customer satisfaction. Appointment confirmations, requests for information, follow-up reports and electronic data interchange can be effected with greater efficiency using instant messages. Planning and Execution of Meetings The mechanism of electronic operations in business facilitates planning and execution of meetings. Executive management meetings, seminars, workshops, symposia and conventions take a great deal of time and effort to manage. Arrangements must be coordinated among a variety of diverse groups in different locations e.g., hotels, speakers, exhibitors, attendees, the media etc. Reports and surveys need to be distributed before and or after, the event. And there are always the headaches of late breaking events and last minute announcement. In an electronic business environment, video-conferences, 8 document conference, computer-based conference, which offer companies the flexibility of both electronic and paper distribution, can make these jobs easier and more effective. SEVEN UNIQUE FEATURES OF E-COMMERCE TECHNOLOGY Dimension of E-commerce Technology Significance in Business Ubiquity The marketplace is extended beyond Internet/Web technology is available traditional boundaries and is removed from a every where: at work, at home, and temporal and geographic location. elsewhere via mobile devices, anytime. “Marketspace” is created; shopping can take place anywhere. Customer convenience is enhanced, and shopping costs are reduced. Global Reach Commerce is enabled across cultural and national boundaries seamlessly and without The technology reaches across national modification. “Marketspace” includes boundaries, around the earth. potentially billions of consumers and millions of businesses worldwide. Universal Standards There is one set of technical media standards There is one set of technology standards, across the globe. namely internet standards. Richness Video, audio, and text marketing messages Video, audio, and text messages are are integrated into a single marketing possible. message and consuming experience. Interactivity Consumers are engaged in a dialog that dynamically adjusts the experience to the The technology works through individual, and makes the consumer a interaction with the users. coparticipant in the process of delivering goods to the market. Information Density Information processing, storage, and communication costs drop dramatically, The technology reduces information costs while currency, accuracy, and timeliness 9