FACULTY OF COMPUTER SCIENCE

COURSE TITLE
INTRODUCTION TO E-COMMERCE

Lecturer: -Eng. Rage

University of Bosaso Faculty of Computer Science

COURSE MATERIALS
The major components of the course are:
1. Course Guide
2. Study Units
3. Text Books
4. Assignment File
5. Presentation Schedule
STUDY UNITS There are 21 study units and 6 modules in this course. They are:
Module 1 Introduction of Basic Concepts and Definitions
Unit 1 Basic Definitions of E-Commerce
Unit 2 Types of E-Commerce
Unit 3 Benefits of E-Commerce
Unit 4 Key Ideas in E-Commerce
Module 2 Understanding e- Business and e- Commerce
Unit 1 Concepts of E-Business and E-Commerce
Unit 2 Facilities that Support E-Commerce and E-Business Systems
Unit 3 Issues and Problems that Affect E-Commerce and E-Business Development
Module 3 Website Development for e-Commerce
Unit 1 Introduction and Techniques for Web Design
Unit 2 Methodologies for Developing E-Commerce Websites
Unit 3 Managing Websites for E-Commerce
Unit 4 Creating and Maintaining a Successful Web Presence
Module 4 Product Catalogue and Processing Orders
Unit 1 E-commerce Catalog Development
Unit 2 Processing Orders in E-Commerce
Unit 3 Online Shop
Module 5 Shopping Cart
Unit 1 Introduction to Shopping Cart
Unit 2 Functions of a Shopping Cart
Unit 3 Payment Gateways for Shopping Carts
Unit 4 Shopping Cart Problems

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Module 6 Completing the Purchasing Process and Tracking Shoppers Information
Unit 1 Completing the Purchasing Process and Tracking Shoppers’ Information
Unit 2 Completing the Purchasing Process and Tracking Shoppers Information
Unit 3 Security in E-commerce
RECOMMENDED TEXTS
Bonnett, K. (2000). An IBM Guide to Doing Business on the Internet. U.S.A.:McGraw-
Hill.
Cameron, D. (1997). Electronic Commerce: The New Business Platform for the Internet.
Computer Technology Research.
Choi, et al. (1997). The Economics of Electronic Commerce. Macmillan Technical
Publications, p. 18.
COURSE MARKING
The following table shows the course marking scheme
Table 1: Course Marking

ASSESSMENT MARKS
CAT 20
Assignments 10
Presentation Total=
30 Marks
Final Examination 60 of overall course marks
Total 100 of Course Marks

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MAIN CONTENT
CONTENTS
Module 1 Introduction of Basic Concepts and Definitions
Unit 1 Basic Definitions of E-Commerce
Unit 2 Types of E-Commerce
Unit 3 Benefits of E-Commerce
Unit 4 Key Ideas in E-Commerce
Module 2 Understanding e- Business and e- Commerce
Unit 1 Concepts of E-Business and E-Commerce
Unit 2 Facilities that Support E-Commerce and E-Business Systems
Unit 3 Issues and Problems that Affect E-Commerce and E-Business Development
Module 3 Website Development for e-Commerce
Unit 1 Introduction and Techniques for Web Design
Unit 2 Methodologies for Developing E-Commerce Websites
Unit 3 Managing Websites for E-Commerce
Unit 4 Creating and Maintaining a Successful Web Presence
Module 4 Product Catalogue and Processing Orders
Unit 1 E-commerce Catalog Development
Unit 2 Processing Orders in E-Commerce
Unit 3 Online Shop
Module 5 Shopping Cart
Unit 1 Introduction to Shopping Cart
Unit 2 Functions of a Shopping Cart
Unit 3 Payment Gateways for Shopping Carts
Unit 4 Shopping Cart Problems

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Module 6 Completing the Purchasing Process and Tracking Shoppers Information
Unit 1 Completing the Purchasing Process and Tracking Shoppers’ Information
Unit 2 Completing the Purchasing Process and Tracking Shoppers Information
Unit 3 Security in E-commerce

INTRODUCTION
Introduction to E-Commerce
WHAT YOU WILL LEARN IN THIS COURSE
The overall aim of this course, is to boost your knowledge of E-commerce and the various concepts
associated with it. In the course of your studies, you will be equipped with definitions of common
terms, characteristics and applications of e-commerce systems. You will also learn about product
catalogue, shopping cart and how to process orders in e-commerce.
COURSE AIM
This course aims to give you an in-depth understanding of E-commerce. It is hoped that the
knowledge would enhance you expertise in E- commerce.

COURSE OBJECTIVES
It is pertinent to note that each unit has precise objectives. You should learn them carefully
before proceeding to subsequent units. Therefore, it may be useful to refer to these objectives in
the course of your study of the unit to assess your progress. You should always look at the unit
objectives after completing a unit. In this way, you can be sure that you have done what is
required of you by the end of the unit. However, below are overall objectives of this course. On
successful completion of this course, you should be able to:
• explain the various definitions, common terminologies, types and technologies of E-
commerce
• briefly explain the benefits and limitations of E-commerce
• explain some few features of a successful E-commerce
• define and explain the concepts of E-business and E-commerce
• distinguish between E-business and E-commerce
• describe the e-commerce web design

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 • explain the techniques for web design
• describe the methodologies for developing E-commerce web sites.
• discuss the security issues in web design
• highlight the ways to improve the usability of E-commerce websites
• discuss about the planning and development of e-commerce catalogues
• process an E-commerce order, different order statuses and order fulfillment issues
• Discuss the concept of shopping cart and mention the various types of shopping carts
• list and explain the functions of a shopping cart
• Explain the various payment gateways for shopping carts
• Mention the problems of shopping cart and how to avoid such problems
• Explain how to secure your e-commerce systems

WORKING THROUGH THIS COURSE

To complete this course, you are required to study all the units, the recommended text books, and
other relevant materials. Each unit contains some tutor-marked assignments, and at some point in
this course, you are required to submit the tutor- marked assignments. There is also a final
examination at the end of this course. Stated below are the components of this course and what
you have to do.

University of Bosaso Faculty of Computer Science

COURSE MATERIALS
The major components of the course are:
1. Course Guide
2. Study Units
3. Text Books
4. Assignment File
5. Presentation Schedule
STUDY UNITS
There are 21 study units and 6 modules in this course. They are:
Module 1 Introduction of Basic Concepts and Definitions
Unit 1 Basic Definitions of E-Commerce
Unit 2 Types of E-Commerce
Unit 3 Benefits of E-Commerce
Unit 4 Key Ideas in E-Commerce
Module 2 Understanding e- Business and e- Commerce
Unit 1 Concepts of E-Business and E-Commerce
Unit 2 Facilities that Support E-Commerce and E-Business Systems
Unit 3 Issues and Problems that Affect E-Commerce and E-Business Development
Module 3 Website Development for e-Commerce
Unit 1 Introduction and Techniques for Web Design
Unit 2 Methodologies for Developing E-Commerce Websites
Unit 3 Managing Websites for E-Commerce
Unit 4 Creating and Maintaining a Successful Web Presence
Module 4 Product Catalogue and Processing Orders
Unit 1 E-commerce Catalog Development
Unit 2 Processing Orders in E-Commerce
Unit 3 Online Shop
Module 5 Shopping Cart
Unit 1 Introduction to Shopping Cart
Unit 2 Functions of a Shopping Cart
Unit 3 Payment Gateways for Shopping Carts
Unit 4 Shopping Cart Problems

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Module 6 Completing the Purchasing Process and Tracking Shoppers Information
Unit 1 Completing the Purchasing Process and Tracking Shoppers’ Information (I)
Unit 2 Completing the Purchasing Process and Tracking Shoppers Information (II)
Unit 3 Security in E-commerce

RECOMMENDED TEXTS
Bonnett, K. (2000). An IBM Guide to Doing Business on the Internet. U.S.A.:McGraw-Hill.
Cameron, D. (1997). Electronic Commerce: The New Business Platform for the Internet.
Computer Technology Research.
Choi, et al. (1997). The Economics of Electronic Commerce. Macmillan Technical Publications,
p. 18.

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 MODULE 1
UNIT 1
BASIC DEFINITIONS OF E-COMMERCE
CONTENTS
1.0 Introduction
2.0 Objectives
3.0 Main Content
3.1 Various Definitions of E-Commerce
3.2 Common E-Commerce Terminologies
3.3 E-Commerce Technologies
4.0 Conclusion
5.0 Summary
6.0 Tutor-Marked Assignment
7.0 References/Further Reading
1.0 INTRODUCTION
Today, some considerable time after the so called ‘dot com/internet revolution’,
electronic commerce (e-commerce) remains a relatively new, emerging and
constantly changing area of business management and information technology.
There has been and continues to be much publicity and discussion about e-
commerce. However, there remains a sense of confusion, suspicion and
misunderstanding surrounding the area, which has been exacerbated by the different
contexts in which electronic commerce is used, coupled with the many related
buzzwords and acronyms. This unit aims to consolidate the major definitions that
have arisen from electronic commerce and to provide an understanding of its
common terminologies and mention some technologies in e- commerce.

2.0 OBJECTIVES
At the end of this unit, you should be able to:
• explain the various definitions of e-commerce
• discuss some common terminologies in e-commerce

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3.0 MAIN CONTENT
3.1 Various Definitions of E-Commerce
In order to understand electronic commerce, it is important to identify the different
terms that are used, and to assess their origin and usage. ‘Electronic commerce is
sharing business information, maintaining business relationships and conducting
business transactions by means of telecommunications networks. In its purest form,
electronic commerce has existed for over 40 years, originating from the electronic
transmission of messages during the Berlin airlift in 1948. From this, Electronic Data
Interchange (EDI) was the next stage of e-commerce development. In the 1960s, a
cooperative effort between industry groups produced a first attempt at common
electronic data formats. The formats, however, were only for purchasing,
transportation and finance data, and were used primarily for intra-industry
transactions. It was not until the late 1970s that work began for National Electronic
Data Interchange (EDI) standards, which developed well into the early 1990s.
EDI is the electronic transfer of a standardised business transaction between a sender
and receiver computer, over some kind of private network or Value-Added Network
(VAN). Both sides would have to have the same application software and the data
would be exchanged in an extremely rigorous format. In sectors such as retail,
automotive, defense and heavy manufacturing, EDI was developed to integrate
information across larger parts of an organization’s value chain from design to
maintenance so that manufacturers could share information with designers,
maintenance and other partners and stakeholders. Before the widespread uptake and
commercial use of the internet, the EDI system was very expensive to run mainly
because of the high cost of the private networks. Thus, uptake was limited largely to
cash-rich multinational corporations using their financial strength to pressure and
persuade (with subsidies) smaller suppliers to implement EDI systems, often at a
very high cost. By 1996, no more than 50,000 companies in Europe and 44,000 in

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the USA were using EDI, representing less than 1 per cent of the total number of
companies in each of the respective continents. Electronic commerce has been re-
defined by the dynamics of the internet and traditional e-commerce is rapidly
moving to the internet. With the advent of the internet,
the term e-commerce began to include:
1. electronic trading of physical goods and of intangibles such as information
2. all the steps involved in trade, such as on-line marketing, ordering payment and support for
delivery
3. the electronic provision of services such as after sales support or on-line legal advice
4. electronic support for collaboration between companies such as collaborative on-line design and
engineering or virtual business consultancy teams.
Some of the definitions of e-commerce often heard and found in publications and the media are:
• electronic commerce is where business transactions take place via telecommunications
networks, especially the internet.
• electronic commerce describes the buying and selling of products, services, and
information via computer networks including the internet.
• electronic commerce is about doing business electronically.
• e-commerce is defined as the conduct of a financial transaction by electronic means.

E-commerce is one of the most important facets of the Internet to have emerged in recent times.
E-commerce or electronic commerce involves carrying out business over the Internet with the
assistance of computers, which are linked to each other forming a network. To be specific, e-
commerce is buying and selling of goods and services and transfer of funds through digital
communications (i.e the internet especially the world wide web).

Electronic commerce or e-commerce refers to a wide range of online business activities for
products and services. It also pertains to “any form of business transaction in which the parties
interact electronically rather than by physical exchanges or direct physical contact.”
E-commerce is the use of electronic communications and digital information processing
technology in business transactions to create, transform, and redefine relationships for value

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creation between or among organisations, and between organisations and individuals. E-commerce
is usually associated with buying and selling over the Internet, or conducting any transaction
involving the transfer of ownership or rights to use goods or services through a computer- mediated
network.

3.2 Common E-Commerce Terminologies

In e-commerce, a lot of terms are used. Below are some major terms used and their various
definitions.
Ad Clicks
Number of times that a viewer clicks on an ad banner.
Address Verification
Process used by a credit card processor or other party to verify that a customer's ordering address
matches their records.
Automated Clearing House
An ACH transaction is an electronic fund transfer through the Federal Reserve Bank from a
checking or savings account
Authorisation
The process of checking the validity and available balance of a customer's credit card before the
transaction can be accepted.
Bandwidth
The amount of information (web pages, text, graphics, video, sound, etc) that is downloaded
through a connection.
Banner
An interactive ad placed on a webpage that is linked to an external advertiser's website or another
internal page within the same website. "Card Not Present “Merchant Account An account that
allows merchants to process credit cards without a face- to-face transaction with the purchaser.
Certificate Authority
A Certificate Authority (CA) is a third party which verifies the identity of merchants and their
sites. The certificate authority issues a certificate (also called a digital certificate or an
authentication certificate) to an applicant company, which can then put the certificate up on its
site.

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Commerce Server
This is the server that manages and maintains all transactional and backend data for a commerce
website.
Cookies
Cookies collect information as a user surfs the web and feed the information back to a web server.
An online vendor's site will send a cookie (which is most simply an identification number) to a
user's computer, where it is stored in a file on the user's hard drive and serves as a digital identifier
tag that notifies the vendor whenever that user re- enters the vendor's website.
Cross Promotion
This has to do with the promotion of a website through other traditional forms of advertising such
as magazines, newspapers, radio, TV, and billboards, etc.
Delayed Settlement Processing
Once a transaction has been authorized, the merchant must ship the hard goods before a transaction
can be settled. Delayed settlements are stored online until the merchant selects the transactions for
settlement.
Digital Certificate
A Digital Certificate issued by a Certificate Authority certifies that a merchant and a particular
website are connected, just as a photo on your driver's license connects your identity with your
personal details. A digital certificate verifies to the shopper that the virtual store is actually
associated with a physical address and phone number which can increase the shopper’s
confidence in the authenticity of the merchant.
Distribution Channel
The method through which a product is sold including retailers, catalogers, and internet
commerce websites, etc.
Domain Name
The unique name of an internet website.
Download
The transfer of information from the internet to the browsing computer.
Drop Ship
The shipping of a product directly from the manufacturer to the customer without requiring
inventory by the retailer.

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Electronic Software Distribution
Software that can be purchased and downloaded directly from the internet.
Hit
Each time a Web server sends a file to a browser, a "hit" is recorded in the server file logs.
Home Page
The first page through which a viewer usually enters a website.
HTML
Hyper Text Markup Language is the standardized language which allows web browsers to interpret
websites.
Keywords
Words that may be used by viewers searching for information. Keywords can be purchased
from search engine companies so that an appropriate ad banner may be displayed when a
viewer searches on a particular word.
Merchant Account
A "bank account" established with a payment processor for the settlement of credit card
transactions. Any merchant who wants to take credit card orders must establish a merchant
account. Internet merchants need a "Card Not Present Merchant Account. “Off-Line
Transaction Processing” Capture of order and credit card information for later
authorisation and transaction processing through a traditional card swipe terminal or
through a computer.
Order Confirmation An email message notifying a customer that an order has been
received and will be processed.
Order Management System A system that accepts orders and initiates a process that
results in the outbound shipment of a finished good.
Real Time Credit Card Processing On-line authorisation of a credit card number in real
time informing the merchant that the card has been approved.

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SSL
Secure Socket Layer is an encryption technology on the server that scrambles important
data such as credit card numbers and order information when it is being stored or passed
from one computer to another.
Shipping Confirmation
An email message that notifies a customer that an order has been shipped.
URL Uniform Resource Locator which describes the "address" for a document on the
internet.
Web Bugs (or pixel tags)
Web bugs are images--usually invisible because they are only one pixel wide by one pixel
high--that are embedded in web pages and HTML- formatted emails. Advertising networks
often use web bugs on web pages to add information to personal profiles stored in cookies
and to collect statistics about how many hits the site gets.

3.3 E-Commerce Technology

A wide variety of e-commerce technology is available to beginning e- commerce merchants. It can
overwhelming determine the best solutions for your e-commerce website. E-commerce technology
options include:
• Affiliate marketing- a method of marketing where other websites can sign up to sell your
products for a commission
• Content management- tools for managing additions and changes to website content
• Customer service management- the management of the relationships with customers,
including the capture, storage and analysis of customer information
• E-mail marketing services- services that facilitate the sending of mass e-mails to your
customer base. It is important that your customers give you permission to send e-mails to
them- this is called permission-based e-mailing
• Inventory management- the management of the inventories including ordering, quantities,
release dates
• Mobile commerce- systems that can offer sales and promotions on mobile devices such as
web enabled cell phones

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 • Payments processing- allows your e-commerce website to accept credit card and
electronic check payments in real time to help prevent fraud
• Search engine marketing- a set of internet marketing strategies that are designed to
promote a website’s visibility and web traffic
• Search tools- search systems that are specific to searching on your e-commerce
website
• Shipping rates- systems that connect with existing shipping systems to provide
exact shipping rates for selected products on your e-commerce site
• Web analytics- the collection, measurement and analysis of user activity on a
website to understand and help achieve the intended objective of the website
• Web design- the design of the look and feel of your e-commerce website or the
customisation of the look of an e-commerce system
• Web hosting-a web hosting company is a company that specialises in hosting web
sites for other companies on their computers
• Website performance monitoring- systems that automatically check that your
website is up and working

SELF- ASSESSMENT EXERCISE

Mention and explain extensively six e-commerce technologies you know.
4.0 CONCLUSION
‘Electronic commerce is sharing business information, maintaining business relationships
and conducting business transactions by means of telecommunications networks. There are
various terminologies associated with it and some of its technologies include: web
analytics, affiliate marketing, content management, e-mail marketing services, mobile
commerce, and search engine marketing e.t.c.
5.0 SUMMARY
In this unit, we examined the various definitions of e-commerce, common terminologies
and finally e-commerce technologies. It is hoped that you understood the topics discussed.
You may now attempt the questions below.

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 UNIT 2
TYPES OF E-COMMERCE CONTENTS
1.0 Introduction
2.0 Objectives
3.0 Main Content
3.1 Types of E-commerce
4.0 Conclusion
5.0 Summary
6.0 Tutor-Marked Assignment
7.0 References/Further Reading
1.0 INTRODUCTION
In this unit, we shall discuss the various types of e-commerce.
2.0 OBJECTIVES
At the end of this unit, you should be able to:
• define the types of e-commerce
• explain with good examples the types of e-commerce.
3.0 MAIN CONTENT
3.1 Types of E-Commerce
The major types of e-commerce are:
1. Business-to-Business (B2B)
2. Business-to-Consumer (B2C)
3. Business-to-Government (B2G)
4. Consumer-to-Consumer (C2C)
1. Business-to-Business (b2b) E-Commerce
B2B e-commerce is simply defined as e-commerce between companies. This is the type of
e-commerce that deals with relationships between and among businesses. About 80% of e-
commerce is of this type, and most experts predict that B2B e-commerce will continue to
grow faster than the B2C segment. The B2B market has two primary components: e-
frastructure and e-markets. E-frastructure is the architecture of B2B,

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primarily consisting of the following:
• logistics- transportation, warehousing and distribution (e.g., Procter and Gamble) •
• application service providers - deployment, hosting and management of packaged
software from a central facility (e.g., Oracle and Linkshare)
• outsourcing of functions in the process of e-commerce, such as web-hosting,
security and customer care solutions (e.g., outsourcing providers such as eShare,
NetSales, iXL Enterprises and Universal Access)
• auction solutions software for the operation and maintenance of real-time auctions
in the internet (e.g., Moai Technologies and OpenSite Technologies)
• content management software for the facilitation of website content management
and delivery (e.g., Interwoven and ProcureNet)
• web-based commerce enablers (e.g., Commerce One, a browser- based, XML-
enabled purchasing automation software).
E-markets are simply defined as websites where buyers and sellers interact with each other
and conduct transactions.
Most B2B applications are in the areas of supplier management (especially purchase order
processing), inventory management (i.e., managing order-ship-bill cycles), distribution
management (especially in the transmission of shipping documents), channel management
(i.e., information dissemination on changes in operational conditions), and payment
management (e.g., electronic payment systems or EPS).
2. Business-to-Consumer (B2c) E-Commerce
Business-to-Consumer e-commerce, or commerce between companies and consumers,
involves customers gathering information; purchasing physical goods (i.e., tangibles such
as books or consumer products) or information goods (or goods of electronic material or
digitised content, such as software, or e-books); and, for information goods, receiving
products over an electronic network.
It is the second largest and the earliest form of e-commerce. Its origins can be traced to
online retailing (or e-tailing). Thus, the more common B2C business models are the online
retailing companies such as [Link], [Link], [Link], Barnes and Noble

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and ToysRus. Other B2C examples involving information goods are E-Trade and
Travelocity.
Types of B2C E-Commerce
Not all electronic commerce is about retail. Here is an extended list of types of B2C
electronic commerce. When you are looking at sites you should try to identify which of the
following is taking place:
1. Storefront (Retail) - products offered for sale with revenue on sale
2. shopping mall - multiple retailers with revenue from commission or space hire
3. Auction - vendors or buyers pay fixed price or percentage
4. Portal - aggregation of services and content with mixed revenues
5. Name your price - site offers buyers to sellers for commission or fixed fee
Components of a System for a B2C Retailer
1. Shop front (web front-end, search, browse)
2. Product database (availability, product info, images, prices)
3. Payment system (to take credit cards securely)
4. Fulfillment system (to pick, pack and ship orders and handle returns)
5. Customer database (to record customer buying history)
6. Content management system (to manage store, add products, change prices etc)
7. Incentives and promotions mechanisms (related product, 2-for-1, 10% off e.g.)
8. Marketing systems (email newsletters, affiliates)
9. Customer service (complaints, out of stock, refunds).
3. Business-to-Government (b2g) E-Commerce
Business-to-government e-commerce or B2G is generally defined as commerce between
companies and the public sector. It refers to the use of the internet for public procurement,
licensing procedures, and other government-related operations. This kind of e-commerce
has two features: first, the public sector assumes a pilot/leading role in establishing e-
commerce; and second, it is assumed that the public sector has the greatest need for making
its procurement system more effective. Web-based purchasing policies increase the
transparency of the procurement process (and reduce the risk of irregularities). To date,

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however, the size of the B2G e-commerce market as a component of total e-commerce is
insignificant, as government e-procurement systems remain undeveloped.

4. Consumer-to-Consumer (c2c) E-Commerce

Consumer-to-consumer e-commerce or C2C is simply commerce between private
individuals or consumers. This type of e-commerce is characterised by the growth of
electronic marketplaces and online auctions, particularly in vertical industries where
firms/businesses can bid for what they want from among multiple suppliers. It perhaps has
the greatest potential for developing new markets.
This type of e-commerce comes in at least three forms:
• auctions facilitated at a portal, such as eBay, which allows online real-time bidding
on items being sold in the web
• peer-to-peer systems, such as the Napster model (a protocol for sharing files
between users used by chat forums similar to IRC) and other file exchange and later
money exchange models
• classified ads at portal sites such as Excite Classifieds and eWanted (an interactive,
online marketplace where buyers and sellers can negotiate and which features
“Buyer Leads & Want Ads”).
SELF-ASSESSMENTEXERCISE
Briefly explain those things e-commerce consists of in your own words.
4.0 CONCLUSION
The major different types of e-commerce are: Business-to-Business (B2B) Business-to-
Consumer (B2C) Business-to-Government (B2G) Consumer-to-Consumer (C2C)
5.0 SUMMARY
In this unit, we explained extensively the different types of e-commerce. Having
understood the topics discussed, you may now attempt the questions below.

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 UNIT 3
BENEFITS OF E-COMMERCE CONTENTS
1.0 Introduction
2.0 Objectives
3.0 Main Content
3.1 Benefits of E-Commerce
3.2 Limitations of E-Commerce
3.3 Role of Government in the Development of E-Commerce in Developing Countries
3.4 What Forces are Fueling E-Commerce?
3.5 Components of a Typical Successful E-commerce Transaction Loop
3.6 The Relevance of Internet to E-Commerce
4.0 Conclusion
5.0 Summary
6.0 Tutor-Marked Assignment
7.0 References/Further Reading
1.0 INTRODUCTION
The previous units examined what e-commerce is, and its types. But what are the benefits
of e-commerce? What does it offer? And why do it? Like any conventional business,
electronic commerce is also characterised by some inherent drawbacks. Let's have a look
at some of these important advantages and disadvantages of electronic commerce.
2.0 OBJECTIVES
At the end of this unit, you should be able to:
• briefly explain the benefits of e-commerce
• explain the limitations of e-commerce
• discuss the role of government in developing e-commerce
• mention the forces fueling e-commerce
• explain the relevance of internet to e-commerce

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3.1 Benefits of E-Commerce
The greatest and the most important benefit of e-commerce, is that it enables a business
concern or individual to reach the global market. It caters to the demands of both the
national and the international market,
as your business activities are no longer restricted by geographical boundaries. With the
help of electronic commerce, even small enterprises can access the global market for
selling and purchasing products and services. Even time restrictions are nonexistent while
conducting businesses, as e- commerce empowers one to execute business transactions 24
hours a day and even on holidays and weekends. This in turn significantly increases sales
and profit. The benefits of e-commerce can be seen to affect three major stakeholders:
organisations, consumers and society.
3.1.1 Benefits of E-Commerce to Organisations
International marketplace: What used to be a single physical marketplace located in a
geographical area has now become a borderless marketplace including national and
international markets. By becoming e-commerce enabled, businesses now have access to
people all around the world. In effect all e-commerce businesses have become virtual
multinational corporations.
Operational cost savings: the cost of creating, processing, distributing, storing and
retrieving paper-based information has decreased.
Mass customisation: e-commerce has revolutionised the way consumers buy goods and
services. The pull-type processing allows for products and services to be customised to the
customer’s requirements. In the past when Ford first started making motor cars; customers
could have any colour so long as it was black. Now customers can configure a car according
to their specifications within minutes on-line through their website.
It enables reduced inventories and overheads by facilitating ‘pull’-type supply chain
management – this is based on collecting the customer order and then delivering through
JIT (just-in-time) manufacturing. This is particularly beneficial for companies in the high
technology sector, where stocks of components held could quickly become obsolete within
months. For example, companies like Motorola (mobile phones), and Dell (computers)

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gather customer orders for a product, transmit them electronically to the manufacturing
plant where they are manufactured according to the customer’s specifications (like colour
and features) and then sent to the customer within a few days.
No more 24-hour-time constraints: businesses can be conducted by customers or suppliers
at any time.
3.1.2 Benefits of E-Commerce to Consumers
24/7 access: Enables customers to shop or conduct other transactions 24 hours a day, all
year round from almost any location. For example, checking balances, making payments,
obtaining travel documents and other information. In one case, a pop star set up web
cameras in every room in his house, so that he could check the status of his home by logging
onto the internet when he was away from home on tour.
More Choices: Customers not only have a whole range of products that they can choose
from and customize, but also an international selection of suppliers.
Price Comparisons: Customers can ‘shop’ around the world and conduct comparisons
either directly by visiting different sites, or by visiting a single site where prices are
aggregated from a number of providers and compared.
Improved delivery processes: This can range from the immediate delivery of digitised or
electronic goods such as software or audio-visual files by downloading via the internet, to
the on-line tracking of the progress of packages being delivered by mail or courier.
3.1.3 Benefits of E-Commerce to Society
It enables more flexible working practices, which enhances the quality of life for a whole
host of people in society, enabling them to work from home. Not only is this more
convenient and provides happier and less stressful working environments, it also
potentially reduces environmental pollution as fewer people have to travel to work
regularly.

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3.2 Limitations of E-Commerce
There was much hype surrounding the internet and e-commerce over the last few years of
the twentieth century. Much of it promoted the internet and e-commerce as the panacea for
all ills, which raises the question, are there any limitations of e-commerce?
Isaac Newton’s third Law of Motion, ‘for every action there is an equal and opposite
reaction’ suggests that for all the benefits there are limitations to e-commerce. These again
will be dealt with according to the three major stakeholders – Organizations, Consumers
and Society.
3.2.1 Limitations of E-Commerce to Organizations
Lack of sufficient system security, reliability, standards and communication protocols:
There are numerous reports of websites and databases being hacked into, and security holes
in software. For example, Microsoft has over the years issued many security notices and
‘patches’ for their software. Several banking and other business websites have experienced
breaches in security where ‘a technical oversight’ or ‘a fault in its systems’ led to
confidential client information becoming available to all.
Rapidly evolving and changing technology, so there is always a feeling of trying to ‘catch
up’ and not be left behind.
Under pressure to innovate and develop business models to exploit the new opportunities
which sometimes leads to strategies detrimental to the organisation.
3.2.2. Limitations of E-Commerce to Consumers
Computing equipment is needed for individuals to participate in the new ‘digital’ economy,
which means an initial capital cost to customers.
A basic technical knowledge is required of both computing equipment and navigation of
the internet and the world wide web.
Cost of access to the internet, whether dial-up or broadband tariffs.
Cost of computing equipment: Not just the initial cost of buying equipment but making
sure that the technology is updated regularly to be compatible with the changing
requirement of the Internet, websites and applications.

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Lack of security and privacy of personal data: There is no real control of data that is
collected over the web or internet. Data protection laws are not universal and so websites
hosted in different countries may or may not have laws which protect privacy of personal
data.
3.2.3 Limitations of E-Commerce to Society
Breakdown in human interaction: As people become more used to interacting
electronically, there could be an erosion of personal and social skills which might
eventually be detrimental to the world we live in where people are more comfortable
interacting with a screen than face-to-face.
Social division: There is a potential danger that there will be an increase in the social divide
between technical haves and have-nots. Hence, people who do not have technical skills
become unable to secure better- paid jobs and could form an underclass with potentially
dangerous implications for social stability.
Reliance on telecommunications infrastructure, power and IT skills, which in
developing countries nullifies the benefits when power, advanced telecommunications
infrastructures and IT skills are unavailable, scarce or underdeveloped.
Wasted resources: As new technology dates quickly, how do you dispose off all the old
computers, keyboards, monitors, speakers and other hardware or software?
3.3 Role of Government in the Development of E-Commerce in Developing
Countries
While it is generally agreed that the private sector should take the lead role in the
development and use of e-commerce, the government plays an instrumental role in
encouraging e-commerce growth through concrete practicable measures such as:
1. creating a favourable policy environment for e-commerce; and
2. becoming a leading-edge user of e-commerce and its applications in its operations, and
a provider to citizens of e-government services, to encourage its mass use.

What is a favorable policy environment for e-commerce?

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Among the public policy issues in electronic commerce that governments should take heed
of are:
• “bridging the digital divide” or promoting access to inexpensive and easy access to
information networks
• legal recognition of e-commerce transactions
• consumer protection from fraud
• protection of consumers’ right to privacy
• legal protection against cracking (or unauthorised access to computer systems)
• protection of intellectual property.
3.4 What Forces Are Fueling E-Commerce?
There are at least three major forces fueling e-commerce: economic forces, marketing (and
customer interaction) forces and technological (particularly multimedia convergence)
forces.
Economic forces: One of the most evident benefits of e-commerce is economic efficiency
resulting from the reduction in communications costs, low-cost technological
infrastructure, speedier and more economic electronic transactions with suppliers, lower
global information sharing and advertising costs,
Marketing forces: Corporations are encouraged to use e-commerce in marketing and
promotion to capture international markets, both big and small. The internet is likewise
used as a medium for enhanced customer service and support.
Technological forces:
The development of ICT is a key factor in the growth of e-commerce. For instance,
technological advances in digitising content, compression and the promotion of open
systems technology have paved the way for the convergence of communication services
into one single platform.

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3.5 Components of a Typical Successful E-Commerce Transaction Loop
E-commerce does not refer merely to a firm putting up a website for the purpose of selling
goods to buyers over the internet. For e-commerce to be a competitive alternative to
traditional commercial transactions and for a firm to maximise the benefits of e-commerce,
a number of technical as well as enabling issues have to be considered. A typical e-
commerce transaction loop involves the following major players and corresponding
requisites:
The Seller should have the following components:
• a corporate website with e-commerce capabilities (e.g., a secure transaction server);
• a corporate intranet so that orders are processed in an efficient manner; and
• IT-literate employees to manage the information flows and maintain the e-
commerce system.
SELF-ASSESSMENTEXERCISE
Discuss the benefits and limitation of e-commerce as it pertains to:
i. The major stakeholders
ii. ii. In general
3.6 The Relevance of Internet to E-Commerce
The internet allows people from all over the world to get connected inexpensively and
reliably. As a technical infrastructure, it is a global collection of networks, connected to
share information using a common set of protocols. Also, as a vast network of people and
information, the internet is an enabler for e-commerce as it allows businesses to showcase
and sell their products and services online and gives potential customers, prospects, and
business partners access to information about these businesses and their products and
services that would lead to purchase. Before the internet was 27tilized for commercial
purposes, companies used private networks-such as the EDI or Electronic Data
Interchange-to transact business with each other. That was the early form of e- commerce.
However, installing and maintaining private networks was very expensive. With the
internet, e-commerce spread rapidly because of the lower costs involved and because the
internet is based on open standards.

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4.0 CONCLUSION
The benefits and limitations of e-commerce can be seen to affect three major stakeholders:
organisations, consumers and society. The government has very important roles to play in
e-commerce in the developing countries. We have three major forces fuelling e-commerce
and lastly the internet plays major roles in e-commerce as we have seen in this unit.

5.0 SUMMARY
In this unit, we talked about the benefits and limitations of e-commerce, The role of
government in developing countries pertaining e-commerce and how it can be used by the
government, as well as forces that fuel e- commerce. We also discussed the major players
in the e-commerce transaction loop and finally the relevance of internet to e-commerce.
You can now answer the questions below hoping that you understood the topics discussed
in this unit.

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 UNIT 4
KEY IDEAS IN E-COMMERCE
CONTENTS
1.0 Introduction
2.0 Objectives
3.0 Main Content
3.1 Key Ideas in E-Commerce
3.1.1 Few Features of Successful E-Commerce
3.1.2 Considerations Before Starting an E-Commerce Business
3.1.3 Things to Want as a Customer
3.2 Common E-Commerce Pitfalls
4.0 Conclusion
5.0 Summary
6.0 Tutor-Marked Assignment
7.0 References/Further Reading
1.0 INTRODUCTION
Before starting an e-commerce business you should have done some basic assignments to
guide you in building a successful and reliable e- commerce business. This unit gives some
important key ideas for starting and sustaining your e-business.
3.0 OBJECTIVES
At the end of this unit, you should be able to:
• briefly explain some few features of a successful e-commerce
• look into considerations before starting an e-commerce business
• find out what the customer wants from an e-commerce business
• explain some e-commerce pitfalls.
3.0 MAIN CONTENT
3.1 Key Ideas E-Commerce
3.1.1 Few Features of Successful E-Commerce
1. Reducing costs in business processes
2. Providing 360 degree customer service (through all channels equally)
3. Extending reach to new audiences or regions.

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3.1.2 Considerations before Starting an E-Commerce Business
1. Designing hosting/technology for scalability
2. Credit card fraud makes sophisticated secure payment systems important
3. Linking stock control systems to the web
4. Sales tax, vat and delivery charges can be hard to calculate and charge (different for
different customers)
5. Enabling powerful self-service shopping with sufficient information and tools to
enable the customer to find and select appropriate products or services
6. Inventory management
7. Managing the fulfillment processes/partners
8. Offering 24 hours global customer service
9. Store management is harder than simply adding/deleting products (re-Pricing, sales,
specials, inventory)
10. Buying market share (marketing and promotion) is expensive but necessary to
become a player in a market with significant existing retailers/ businesses.
3.1.3 What to Desire as a Customer
1. To find what I want quickly
2. To experiment, “try things on”, research deeply, compare features
3. To be recognised as a customer
4. To feel that my personal information is secure
5. To feel that I am getting a good deal
6. To feel that the company behind the site understands my needs
7. To be able to listen to other shoppers who understand my needs
8. To be able to complain

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3.2 Common E-Commerce Pitfalls
Despite the rapid growth in the use of e-commerce by both consumers and businesses,
not all e-commerce developments are a success. The reasons for this vary and are often
dependent upon a particular set of circumstances or issues. Nevertheless there is a
common thread between many of the problems and pitfalls experienced by e-commerce
systems. This will give an overview of some of the more common e-commerce pitfalls. It
obviously cannot cover all potential problem areas, but it will provide you with some
useful pointers in terms of what not to do, and things to take account of, as you develop
your own e-commerce offerings.
1. Lack of planning Mistakes at the planning stage of an e-commerce project can reduce
its chances of success. Here are some of the key issues you need to consider when
introducing an e-commerce system.
2. Set realistic targets Set clear goals - for example, to bring in new business or cut the
cost of each sale. Agree specific, measurable objectives such as a percentage increase
in sales or new customers. Ensure your targets are realistic and achievable. Have a
clear business focus
3. Pursue possibilities offered by e-commerce, but don't lose your focus on what your
business is actually about. Understand how e- commerce will integrate with your
overall business objectives. Will it increase sales or improve margins? Have a clear
view on where it will add value. If you find that e-commerce is creating conflicts
within your operation, re-examine your goals and rethink how e-commerce can best
fit into your business.
4. Don't overlook the hidden costs
Look at the total cost of ownership, including hardware, software, hosting, training,
services, maintenance and support, upgrades, marketing and communications, and
administration.
SELF-ASSESSMENTEXERCISE
Mention and explain the common e-commerce pitfalls you know.

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4.0 CONCLUSION
To conclusively say that you have a successful e-commerce, there are some pointers or:
features by which you can tell whether you are successful or not, some of which include:
reducing costs in business processes, providing 360-degree customer service (through all
channels equally), extending reach to new audiences or regions, retaining customers and
so on. There are also some considerations before you can start an e-commerce business,
how to read the customer’s mind and know what he/she really wants. Finally, we attempted
an overview of some common e-commerce pitfalls.
5.0 SUMMARY
In this unit, we discussed about some key ideas in e-commerce which include: features of
successful e-commerce, considerations before starting an e-commerce business, what to
want as a customer and finally common e-commerce pitfalls. Hoping that you understood
the topics discussed, you may now attempt the questions below.

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 UNIT 5
CONCEPTS OF E-BUSINESS AND E- COMMERCE
CONTENTS
1.0 Introduction
2.0 Objectives
3.0 Main Content
3.1 E-Business
3.2 E-Commerce and E-Business
3.3 An E-distinction
4.0 Conclusion
5.0 Summary
6.0 Tutor-Marked Assignment
7.0 References/Further Reading
1.0 INTRODUCTION
In the emerging global economy, e-commerce and e-business have increasingly become
necessary components of business strategy and a strong catalyst for economic
development. The integration of information and communications technology (ICT) in
business has revolutionised relationships within organisations and those between and
among organisations and individuals.
The name of the game is strategic positioning, the ability of a company to determine
emerging opportunities and utilise the necessary human capital skills (such as intellectual
resources) to make the most of these opportunities through an e-business strategy that is
simple, workable and practicable within the context of a global information milieu and new
economic environment. With its effect of leveling the playing field, e- commerce coupled
with the appropriate strategy and policy approach enables small and medium scale
enterprises to compete with large and capital-rich businesses.
2.0 OBJECTIVES
At the end of this unit, you should be able to:
• define and explain the concepts of e-business and e-commerce
• distinguish between e-business and e-commerce.
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3.0 MAIN CONTENT
3.1 E-Business
As with e-commerce, e-business (electronic business) also has a number of different
definitions and is used in a number of different contexts. One of the first to use the term
was IBM in October 1997, when it launched a campaign built around e-business. Today,
major corporations are rethinking their businesses in terms of the internet and its new
culture and capabilities and this is what some see as e-business. E- business is the conduct
of business on the internet, not only buying and selling but also servicing customers and
collaborating with business partners. E-business includes customer service (e-service) and
intra- business tasks. E-business is the transformation of key business processes through
the use of Internet technologies. An e-business is a company that can adapt to constant and
continual change. The development of intranet and extranet is part of e-business. E-
business is everything to do with back-end systems in an organisation. In practice, e-
commerce and e-business are often used interchangeably.
3.2 E-Commerce and E-Business
Internet terminology is still in a state of flux; nowhere is this more evident than in the use
of the terms e-commerce and e-business. Both have been used to describe any business
activity which uses the internet. However, some consensus is emerging in that the terms
are gradually being employed in a more focused way. Some analysts and on-line business
people have decided that e-business is infinitely superior to e- commerce. That’s
misleading and distracts us from the business goals at hand. The effort to separate the e-
commerce and e-business concepts appears to have been driven by marketing motives and
is dreadfully thin in substance. Here is the important thing: e-commerce, e-business or
whatever else you may want to call it is a means to an end. In fact, there is no one definitive
meaning of e-commerce or e-business that is universally established.

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3.3 An E-Distinction
For the purpose of clarity, the distinction between e-commerce and e- business is based on
the respective terms commerce and business. Commerce is defined as embracing the
concept of trade, ‘exchange of merchandise on a large scale between different countries’.
By association, e-commerce can be seen to include the electronic medium for this
exchange. Thus, electronic commerce can be broadly defined as the exchange of
merchandise (whether tangible or intangible) on a large scale between different countries
using an electronic medium – namely the internet.

Business, on the other hand, is defined as ‘a commercial enterprise as a going concern’.

E-business can broadly be defined as the processes or areas involved in the running and
operation of an organization that are electronic or digital in nature. These include direct
business activities such as marketing, sales and human resource management but also
indirect activities such as business process re-engineering and change management, which
impact on the improvement in efficiency and integration of business processes and
activities. In e-business, on the other hand, ICT is used to enhance one’s business.
Figure 1 illustrates the major differences in e-commerce and e-business. Where e-
commerce has a broader definition referring more to the macro-environment; e-business
relates more to the micro-level of the firm.

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CONCLUSION
There is no one definitive meaning of e-commerce or e-business that is universally established.
The different terms are used to illustrate different perspectives and emphasises different people
in different organisations and business sectors. Because of this, it is necessary when undertaking
any electronic commerce, electronic business or any other e-related project or assignment to
clearly define any term in the context and environment in which it is being used.
5.0 SUMMARY
In this unit, we agreed that there is no one commonly agreed definition of e-commerce or e-
business. Thus, there is a need to clarify terms being used and explain the context in which they
are being applied. You can now answer the questions below hoping that you understood the
topics discussed in this unit.

University of Bosaso Faculty of Computer Science

 UNIT 6
FACILITIES THAT SUPPORT E-COMMERCE AND E-BUSINESS
SYSTEMS
CONTENTS
1.0 Introduction
2.0 Objectives
3.0 Main Content
3.1 The Facilities that Support E-Commerce and E-Business Systems
4.0 Conclusion
5.0 Summary
6.0 Tutor-Marked Assignment
7.0 References/Further Reading
1.0 INTRODUCTION
In this unit, we shall discuss the various facilities that support e- commerce and e-
business systems.
2.0 OBJECTIVES
At the end of this unit, you should be able to:
• mention the various facilities that support e-commerce and e- business systems
• discuss extensively the facilities that support these systems.
3.0 MAIN CONTENT
3.1 The Facilities that Support E-Commerce and E-Business Systems
1. The World Wide Web
The web is nothing more than a collection of files stored at locations throughout the world.
These files are written using a special language known as the Hypertext Markup Language
(HTML). A file written using this language will contain text which forms the information
content of the file, together with instructions which define how the text is to be displayed;
for example, HTML contains a facility whereby blocks of text are specified to be displayed
as bullet points.
The user of the World Wide Web employs a program known as a browser. When the user
wishes to read a file on the World Wide Web he will inform the browser of its address on
the web and the browser will fetch the file. The browser will then examine the contents of

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the page and will determine from the HTML in the file how it is to be displayed; for
example, it might meet some HTML which switches the display of the material from one
font to another font.

2. FTP
The acronym FTP stands for the File Transfer Protocol. It provides the facility whereby
files can be downloaded into a computer from another computer in the internet. Although
there are a number of utilities for file transfer most users now employ browsers for this via
FTP links.
There are a number of utilities which enable you to load anything from clip art to the latest
updates for operating systems. Many of these utilities are very primitive: they use a simple
command line interface which lets you log in to the computer which holds the files, and
then enables you to use simple textual commands to identify the files to be downloaded.
However, there are now a large number of sophisticated FTP programs which, for example,
allow you graphically to show the structure of the file system on the remote computer, use

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drag and drop to download files and resume processing when transfer is interrupted by a
network hang-up.
3. E-mail
This is one of the most ubiquitous technologies on the internet and,
along with the World Wide Web, is the most used. When you write an email you use a
program known as a mailer.
4. Newsgroups
A newsgroup is a collection of internet users who are interested in a particular topic. The
topic may be a technical one, for example the LINUX operating system, or a recreational
one such as fly fishing. Members of a newsgroup send messages associated with a
particular issue such as the date of release of the next version of LINUX or the efficacy of
using certain files on certain rivers.
Newsgroups can be moderated or unmoderated. If a newsgroup is moderated a member
will examine each posting and determine whether it should be posted. There are a number
of reasons why postings are rejected: one major reason is that it is not relevant to the area
that a newsgroup covers; another reason is that the posting is abusive to another user.
There are no restrictions on posting to unmoderated newsgroups.
5. Mailing lists
Mailing lists are groups of users who have some interest in common, for example they
may all be network professionals. Such a list is used by organisations or individuals to
inform the members of topics of interest to them.
While there are many uses for mailing lists within companies there are also plenty of uses
in e- commerce. For example, a mailing list can be used to inform current customers of
any new products or services that are being offered. Most mailing lists are automatically
maintained by specialized software. Such software allows someone to subscribe to a
mailing list or drop out of a mailing list by just sending a simple email message to the
software. For example, often all that is needed to subscribe to a mailing list is a single line
email containing the message. This will result in the user who sent the email being added
to the list of users associated with the mailing list.

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5.0 CONCLUSION
We have looked at the various facilities that support e-commerce and e- business
systems.
5.0 SUMMARY
In this unit, we talked about the facilities that support e-commerce and e-business systems.
Having understood the topic discussed, you may now attempt the questions below.

University of Bosaso Faculty of Computer Science

 UNIT 7
ISSUES AND PROBLEMS THAT AFFECT E- COMMERCE AND E-
BUSINESS DEVELOPMENT

CONTENTS
1.0 Introduction
2.0 Objectives
3.0 Main Content
3.1 Issues and Problems Affecting E-
Commerce and E- Business Development
4.0 Conclusion
5.0 Summary
6.0 Tutor-Marked Assignment
7.0 References/Further Reading

1.0 INTRODUCTION
In this unit, we shall discuss the issues and problems affecting e- commerce and e-
business development.
2.0 OBJECTIVES
At the end of this unit, you should be able to:
• list the issues and problems affecting e-commerce and e- business development
• explain these issues and problems
3.0 MAIN CONTENT

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3.1 Issues and Problems Affecting E-Commerce and E- Business Development

1. Legacy Technology
The World Wide Web was developed as a way of dispensing documentation within the
large research laboratory at CERN in Geneva. I am sure that the originator of the
technology, Tim Berners-Lee, did not realise at that stage how it would expand and
become a major component of our economic infrastructure. Because many of the
developers of the technology were unaware of its potential, there are a number of
problems associated with its huge expansion. Three of these are discussed in the
following subsections.
2. Space Problems
Probably the best known of these is the fact that the internet is running out of space for
identifying computers. Each computer in a network needs to be identified by a unique
data pattern known as an IP address. The current technology used to transport data
around the internet is such that in the comparatively near future we shall run out of
space to hold these unique addresses. Happily, this is a problem that has been identified
and groups of researchers around the globe have developed new technologies which
will eventually overcome this problem, one of these technologies being a new version of
the protocol used to transfer data over the internet.
[Link] Servers
Web servers are what are known as stateless servers. What this means is that in their
pure form, they keep no memory of what has previously happened to them between
requests; for example, when a request is processed by a web server for a page they
have no direct knowledge about whether the page request was made by the same
browser that asked for a previous page to be returned. While this was not serious when
web servers were being mainly used for dispensing documentation (their original use) it
is a serious problem in e-commerce. One example of this is the shopping cart, also
known as the shopping trolley. When you visit an e-tailer and purchase goods, you

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interact with a simulation of a shopping cart which keeps details of the goods that you
have purchased. At the end of your interaction a web page, often known as a checkout
page, will display the contents of the shopping cart and present you with the monetary
total of your purchases. Web servers as originally envisaged are unable to do this as
they have no knowledge of any previous visit: they would not be able to remember the
previous purchase.
5. No Dynamic Web Pages
Another example of a problem with web servers which arises from their original
functionality is the fact that web pages were designed to be static: they were files
which were stored on a computer and delivered in their stored form to anyone using a
browser to access them. Many e- commerce and e-business applications require
something much more dynamic, for example there are a number of financial service
sites on the web which provide customers with up-to-date stock and share prices.
These prices are stored on web pages and need to change very frequently – often every
few seconds. There have been a number of add- on technologies that have been
developed in order to cope with this problem.
6. Security and Privacy
The internet is not a particularly secure place. There are two aspects to this: the first is
that information is widely published throughout the internet which can be used for
criminal and near-criminal activities. The second aspect is that since the internet is an
open system, details of its underlying technologies are freely available to anybody. This
means that the way data passes through the internet is in the public domain; the
consequence of this is that, theoretically, anyone with the right tools can eavesdrop on
data passing from one computer on the internet to another.
4.0 CONCLUSION
Issues and problems affecting e-commerce and e-business development include:
1. Legacy technology 2. Security and privacy 3. Programming and abstraction
4. The speed of development etc.

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5.0 SUMMARY
In this unit, we explained about the issues and problems that affect e- commerce and
e-business development. You can now answer the question below hoping that you
understood the topics discussed in this unit.

University of Bosaso Faculty of Computer Science

 Unit 8
Introduction and Techniques for Web Design
CONTENTS
1.0 Introduction
2.0 Objectives
3.0 Main Content
3.1 E-commerce Web Design
3.1.1 Beginning and Future of E-Commerce Web Design
3.1.2 E-Commerce Design Methods and Features
3.2 The Techniques for Web Design
3.2.1 Registering a Domain Name
3.2.2 Hosting
3.2.3 ISP Liability
3.2.4 Website Development
3.2.5 Marketing and Advertising
3.3 Benefits of E-Commerce Web Design
4.0 Conclusion
5.0 Summary
6.0 Tutor- Marked Assignment 7.0 References/Further Reading

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1.0 INTRODUCTION
In order to have a successful e-commerce, the design of the site is a very important
factor because it is what the prospective customer will identify you with. In this unit, we
will discuss about e-commerce web design and its techniques.
2.0 OBJECTIVES
At the end of this unit, you should be able to:
• describe the e-commerce web design
• explain the techniques for web design and finally
• discuss its design methods and features
• mention the benefits of e-commerce web design
3.1 E-Commerce Web Design
E-commerce web design is generally defined as the planning, creation and arrangement
of files, text, graphics and processes used within an e- commerce enabled website. The
files make up different sections of the site which typically include pages, categories,
subcategories and products. E-commerce web design is commonly referred to as web
design, web development, site design, site development, shop design/development,
store design/development, or web store design/development.
3.1.1 Beginning and Future of E-Commerce Web Design
E-commerce designs have evolved over the years from plain looking designs with few
graphics and little appeal to fully interactive e- commerce sites using the latest in graphic
design and programming technologies. The days of simple layouts and designs are pretty
much done with as competition increases and more merchants are attempting to improve
the look, feel and usability of their e-commerce designs. Now it is more common to see
gradient graphics, more options for shoppers, features surrounding customers, better
layouts, faster load times, videos, more payment options and much more. New age e-
commerce design is about being creative and original, pretty much anything that can be
thought of can be accomplished using current e- commerce design technology for an e-
commerce business.

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3.1.2 E-Commerce Design Methods and Features
E-commerce design today typically consists of several unique features or elements and
can be performed using a variety of popular web design methods. A database, shopping
cart, ability to accept payments, security certificate, products, policies and more are all
common e-commerce design features. There are also e-commerce design and shopping
cart process best practices that can make the task of knowing how to design and e-
commerce site easier. Popular methods of e-commerce design include using HTML (and
stem languages), ASP, [Link], PHP, CSS, Ajax, JavaScript, XML and others. Popular
methods for creating e- commerce graphics include using photoshop, flash and other
graphics or video programs.
3.2 The Techniques for Web Design
In today's wired age, it is common knowledge that setting up one's own web page is not
a particularly difficult endeavor. Indeed, anyone who has run a broad-based search
through one of the major search engines has likely come across myriad "homemade"
pages created by individuals reflecting their personal interests or some life ambition. To
set up a web site, one really only needs an internet-connected computer, a web browser
equipped with a basic text-editing application and an internet service provider (ISP) that
offers web hosting for its users. Such users are unlikely to seek legal advice, and the legal
issues that arise in relation to such sites tend to be limited to copyright and trademark
violations by the site creators.
E-commerce, however, presents a wholly different challenge for the site creator. The
sophisticated nature of the technology required, the number of players involved in setting
up a site and facilitating transactions, the privacy concerns of customers who may be
giving the site information about themselves, and a host of other realities of online
business make effective legal representation critical in this arena. In addition, e-
commerce set-up often requires great speed due to the nature of the industry, therefore
adding an additional layer of complexity that calls for even more vigilance and

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preparedness on the part of the legal practitioners in structuring transactions and
advising clients. This section will examine some general steps that most e-businesses will
follow in establishing an e-commerce site and explore the necessity or possibility of legal
representation at different critical junctures of the set-up process.
3.2.1 Registering a Domain Name
In setting up a website, the first step usually undertaken is registering a domain name. A
domain name is the unique address that guides a user's browser to the computer on
which the website resides. It usually consists of two elements, the top-level domain (TLD)
and the second-level domain (SLD - which some simply refer to as the "domain name").
The most recognizable example of a TLD is the familiar ‘.com’ found at the end of many
web addresses. In addition, there is another set of TLDs reserved for specific countries.
These are known as the country code TLDs, or ccTLDs and include domains such as .ng for
Nigeria, .jp for
(a) Choosing a Top-Level Domain (TLD) Choosing a TLD then is the first step in
registering a domain name. There are many registry services for the three
unrestricted gTLDs, with a variety of prices and service options available. One must
closely review the terms of the registrar service agreement policies. The domain
holder's rights in a gTLD domain name are very tenuous; most registrars reserve
the right to revoke a domain registration at their own discretion. In addition, all of
the current open gTLDs (.com, .org., .net) must abide by a standard Uniform
Domain Name Dispute Resolution Agreement under which the domain holder is
subject to a mandatory resolution procedure if any trademark owner complains
about the domain name.

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 (b) Choosing a Second-Level Domain Name (SLD)
The next step is to choose a second-level domain (SLD or 2LD), which is the part of the
domain name preceding the TLD. Common examples of SLDs include the "Amazon" of
[Link] and the "CNN" of [Link]. Choosing an SLD is something particularly
important for those involved in e-commerce as they think about branding and
trademarks. This choice is best made with the advice of trademark counsel. As most
common words and short phrases have already been registered as second-level
domains in the unrestricted gTLDs, a business may have to look to an unrestricted
ccTLD or one of the new TLDs to register a manageable and easily remembered name.
(c) Choosing a Registrar
Virtually all domain registrars have a very simple search process to see whether a
name is available and many also have tools to help users find available domain
names containing similar words if the original choice is unavailable. After finding
an available domain name (top and second- level), most registrars give registrants
a choice of options in terms of pricing and duration. Registrars may only grant
domain names for fixed periods of time, with an option to renew when the period
lapses - and most registrars give options for different registration durations.
Choosing a longer registration period has the advantage of locking the registrant
into a registration at a price that will not rise, and some registrars offer discounts
for registrations of longer duration.
3.2.2 Hosting
After registering a domain name, most businesses will need to arrange for hosting
services. The actual services offered in a web hosting agreement vary from provider to
provider, making it difficult to generalise what, exactly, comprises hosting. In general, a
host basically stores web pages for a client and operates a giant switchboard of sorts that
connects web users' computers with requested pages from the hosted company. Hosts
generally facilitate such storage and connections by operating hosting centers; large

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warehouse spaces that contain the computers on which clients' web pages are stored and
connect them to the Internet via high-bandwidth fiber-optic lines.
3.2.4 Website Development
(a) In-house Development vs. Outsourcing
Like hosting, web design and programming is something that can be developed by in-
house personnel or can be outsourced. While most businesses take advantage of the
benefits of outsourcing the hosting of servers, web design and, to a lesser extent,
programming are often kept in house for several reasons.
Web design is the most crucial aspect of an e-commerce business. The website is where
customers interact with the business and buy products; in some instances (as with purely
content providers), the website itself is the product. Another reason many companies
keep web design and programming in-house is because the internet economy in general
and e- business specifically often calls for rapid changes - both in the content and design
of websites. In terms of content, it may often be the case that an e-business needs to add
updated products or product information to its website, either as part of the regular
course of business or in response to some particular event in the market.
3.3 Benefits of E-Commerce Web Design
Allows for Faster, Easier, Efficient Discovery
An online business' ability to be discovered by shoppers, current customers and search
engines is extremely important for merchants who hope to grow their e-commerce venture
into a success. Quality e- commerce design allows for quicker, easier, more efficient
discovery by consumers or search engine bots. By using e-commerce design best practices
and following certain usability guidelines, you'll find that the discovery process will nearly
take care of itself, meaning the merchant will have little to no maintenance down the road.
The faster, easier and more efficient you can make your processes of discovery, the faster
your business will grow to the next stage. For best results, keep improving, keep testing
and always refine your designs.

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Potential to Improve Accessibility
Having an e-commerce business that is easy to discover is only part of the formula within
e-commerce design. In addition, merchants will need a store that is accessible to their
shoppers, existing customers and even search engines. Accessibility is a major factor
when designing and implementing a site, if users and search engines cannot access all
your important pages you will find that it may reduce your chances of success or at the
very least slow down chances you would have had if the store was originally built with
accessibility best practices in mind. Use hyperlinks rather than image links, utilise a
sitemap, keep track of indexed pages and link your site together in an organised, easy to
understand, easy to use way. Make sure that pages that lie deeper within the site can be
accessed from pages higher up in the site and vice versa. Making your business site more
accessible in the beginning will save the merchant time, hassle and re-designing in the
end.
Potential to Improve Usability
Using quality e-commerce design methods will not only make your site easier to discover
and access, it can also potentially improve how shoppers, current customers and search
engine use the site. The way in which a site is built can interfere with how users interact
and use the site. If you put up features that turn into roadblocks, the site will become less
usable. If you put up features that are designed with usability best practices in mind you'll
find that shoppers will be happy with their experience, customers will return and search
engines will give you the placement you deserve within their listings. Many merchants
have no idea that the way in which a site is designed can actually make or break the sites
usability in the end. Study what users in your niche want, give it to them and make it easy
to understand, within a visible location that is easy for anyone to use.
Easier to Maintain Over Time
If an e-commerce design is done correctly from the very beginning, it will make the task
of design maintenance much easier over time. Typically, merchants will have to update

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their site regularly anyway, but using design best practices from the start will make your
updates less frequent and easier to implement. not only that, but whenever new e-
commerce design guidelines are discovered, you'll find that it takes you less time and less
steps to catch up with the pack, giving you more time to actually run the business, manage
customers, products and things like marketing strategies or promotions. In short, make
your site easy to discover, make it accessible to users and make it usable to anyone who
may eventually land on your page. In the end, you'll spend less time updating and
maintaining your site than others who were not aware, ignored or didn't pay close
attention during the design and implementation phase of the business.
SELF-ASSESSMENTEXERCISE
Briefly explain the techniques for web design.
4.0 CONCLUSION
E-commerce web design is generally defined as the planning, creation and arrangement
of files, text, graphics and processes used within an e- commerce enabled website. E-
commerce designs have evolved over the years from plain looking designs with few
graphics and little appeal to fully interactive e-commerce sites using the latest in graphic
design and programming technologies. E-commerce design today typically consists of
several unique features or elements and can be performed using a variety of popular web
design methods. To set up a website, one really only needs an internet-connected
computer, a web browser equipped with a basic text-editing application and an internet
service provider (ISP) that offers web hosting for its users. Some benefits of e-commerce
web design include: allows for faster, easier, efficient discovery and potential to improve
accessibility e.t.c.

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5.0 SUMMARY
In this unit, we explained about e-commerce web design, its design methods and features,
techniques for web design and benefits of e- commerce web design. We hope that you
understood the topics discussed, you may now attempt the questions below.
6.0 TUTOR-MARKED ASSIGNMENT
1. Extensively discuss about the benefits of e-commerce web design.
2. Briefly explain the other techniques for web design not mentioned in this unit.

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 Unit 9
METHODOLOGIES FOR DEVELOPING E- COMMERCE WEBSITES
CONTENTS
1.0 Introduction
2.0 Objectives
3.0 Main Content
3.1 Developing Web Applications
3.2 Key Features of ICDM
3.3 Overview of ICDM
3.4. A Comparison of ICDM with other Web Development Methodologies
3.5 Evaluating Methodologies
3.6 Limitations of the Methodology
4.0 Conclusion
5.0 Summary
6.0 Tutor-Marked Assignment
7.0 References/Further Reading
1.0 INTRODUCTION
The popular assumption is that processes, methods and techniques used for applications
development have changed radically as the focus of applications has moved from the traditional
information systems domain to the WWW. In this unit, the requirements of development
methodologies in the Web era are examined. An internet commerce development methodology is
proposed which addresses many of these issues (ICDM). The methodology is compared with other
web development approaches and the issues related to evaluating methodologies are discussed.
2.0 OBJECTIVES At the end of this unit, you should be able to:
• explain the term ICDM
• compare ICDM with other web development methodologies
• evaluate the methodologies
• explain the limitations of the methodology

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3.0 MAIN CONTENT 3.1 Developing Web Applications
The internet and the world-wide-web have had a profound impact on the business world.
The changing business landscape has also impacted on the requirements of systems
development approaches. The list below provides a representative summary of the issues
related to e-commerce applications development.
• Business focus E-business should be driven by business strategy not the
implementation of technology
• External focus (Customer focus) E-business applications have a customer focus
which impact on the gathering of requirements and development team
composition
• Speed of change
The rapidly changing business environment influences the need for short development
cycles and the need for evolutionary development approaches. It would appear that many
of the issues being discussed in electronic commerce (EC) development are not
particularly new. Taking a business perspective, the role of methodologies, evolutionary
development approaches, speed of development and effective project management have
all been topics of concern for many years. Rather than viewing web commerce as a
radically new development paradigm it can be viewed as an evolutionary stage in the
discipline of information systems.
3.2 Key Features of ICDM
In this section, the main features of the Internet Commerce Development Methodology
(ICDM) are outlined. ICDM attempts to address the issues related to emphasizing a
business focus, external focus and speed of change. The description of the methodology
is guided by the framework for analysing methodologies provided by Avison and
Fitzgerald.
a) Philosophy
ICDM views e-commerce developments as organisational initiatives and as such takes into
account the need to address strategic, business, managerial, and organisational culture

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issues as well as the technical details of design and implementation. In this respect, the
Methodology takes a holistic subjectivist perspective arguing that e-commerce
applications will not be effective unless the organisational management and culture is
conducive to change. Defining an organisation's e-business strategy involves dealing with
a range of information sources and opinions. A question such as "how can the organisation
effectively employ e-commerce?”; is inherently subjective in nature and any definition of
effective will be socially constructed to a large extent. ICDM relies on competitive analysis
to help shape the e-business direction (SWOT Analysis).
b) Scope
ICDM is a business analysis methodology as well as a systems development methodology.
Many traditional information systems methodologies only cover the more technical aspects
of systems development and do not start with any form of business analysis. Internet
commerce is first and foremost a business direction and hence requires a thorough analysis
of its place in the overall business strategy. The Internet Commerce Development
Methodology (ICDM) takes into account the wider trends in the business world and society
in its strategy development phase with the SWOT analysis. The changing profile of the
consumer is important and user or customer involvement is factored in at various points in
the methodology. It is no longer sufficient for a methodology to be inwardly focused; it
must provide a mechanism for scanning the wider business environment. With the trend
towards globalisation of economic markets an organisation must be continually looking for
opportunities and learning on a global level.
c) Techniques and Tools
ICDM has a number of component phases to guide the development of strategy and the
website. Issues related to web page design, database connections, security issues, and
implementation tools and methods are all covered.
d) Framework ICDM provides a framework for developing internet commerce. It is not a
prescriptive methodology with a large number of steps to be completed. It is a loose fitting
framework for developing strategies and for the evolutionary development of web based
systems. As a result it is applicable to a wide range of situations where organisations are

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looking to gain from investing in internet commerce. The approach acknowledges that
organisational development via Internet commerce is sufficiently complex and varied to
warrant the use of guidelines rather than detailed tasks that lack general applicability.
This allows the company to adapt the methodology to the specialized conditions of the
organisation.
3.3 Overview of ICDM
This unit proposes the Internet Commerce Development Methodology (ICDM) as a
framework for the development of internet commerce in an organisational context. ICDM
provides both a management strategy and a development strategy which are driven by the
needs of the business. Hence, ICDM gives particular attention to providing a business
focus.
ICDM has the following components and features which are described in the remainder of
this section.
• Web Management structure
• Strategy and business analysis development phase
SWOT Analysis
Level of Change - Business Process Re-engineering or Value Chain Analysis
• User Involvement
• Meta-development strategy
• Analysis phase Requirement’s techniques Functional requirements framework
• Physical architecture framework
• Design phase
• Component implementation and evolution

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3.3.1 Web Management Strategy
ICDM recommends the management and development of e-business systems on
three levels. The overall management and development of the entire web strategy
can be seen as an on-going task as well as the development of the functional
components of a web application. The first tier is a meta-development and
management perspective that provides a framework for development. The second
tier concerns the development of the components of the website. At both levels the

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 work must be seen as being evolutionary in nature, to cope with the inevitable
changes that will have to be made. The third tier in the management and
development structure is concerned with developing and implementing the system
and so includes technical development teams, analysts, content specialists and web
development consultants.

3.4. A Comparison of ICDM With Other Web Development Methodologies

To highlight the contribution of ICDM, we now compare it with a number of other web
applications development methodologies. The framework used for the comparison uses
philosophy, scope, key techniques and tools, the focus of the methodology,
internal/external emphasis and the systems development perspective. The three other
methods concentrate on the task of website development and the technical architecture.
ICDM is the only method that emphasises strategy and business analysis. Indeed, the focus
is equally on developing a management structure and conducive organisational culture as
well as web applications development. The other methodologies do not directly address the
importance of evolutionary development issues taking more of a traditional project
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approach to development. It is important that methodologies for web development include
ways of obtaining customer (user) and outside input in the requirements, design and
evaluation stages. Only ICDM addresses this issue.
3.5 Evaluating Methodologies
A development methodology can be evaluated in a variety of ways. It could be evaluated
according to a framework of requirements or rationale to determine if these are met with
the approach. The benefit of this is that it can be carried out by the system developers and
so is relatively inexpensive and fast to conduct. The weakness is that all problems are
unlikely to be identified.
Focus groups are another method of evaluating methodologies. ICDM has been evaluated
with several focus groups. Each group was presented with extensive material documenting
ICDM. A seminar lasting three hours was also conducted, at the end of which the
participants discussed the methodology.
3.6 Limitations of the Methodology
A number of limitations or weaknesses were identified by the focus groups in relation to
ICDM. Whilst the consideration of developing an effective organizational culture was
listed as strength of the methodology it was mentioned that more details need to be included
on how to facilitate this. Creating an innovative organizational culture is not a simple task
and of course every company is at a different starting point. Perhaps unrealistic
expectations are made on development methodologies but it does highlight the recognition
given by practitioners to the issue and the difficulties they face. A recurring issue in relation
to systems development methodologies is providing sufficiently flexible guidelines and
providing support for industry specific factors. Many industry sectors, for example, employ
e- commerce primarily for business-to-business activities and although the methodology
provides some discussion of the development issues in this area it is rather limited. The
travel agents commented on the time involved in working through such a methodology. As
small businesses, much of the development work would be out-sourced. Although ICDM
provides guidelines for selecting web consultants it still exposes the developer to the full
range of tasks and phases of web development.

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SELF-ASSESSMENTEXERCISE
Describe the methodology for developing e-commerce websites you learnt from this unit. 4.0
CONCLUSION
Although ICDM has been recognized as having some useful and effective features for web
applications development, there are still issues which need to be addressed. Practitioners, it would
seem, desire approaches that are tailor made for their industry. This is difficult to fully consider in
a methodology other than through multiple variations of the methods and techniques.
SUMMARY
In this unit, we have explained the methodologies of developing e- commerce websites.
With the hope that you understood the topics discussed, you may now answer the
question below.
TUTOR-MARKED ASSIGNMENT
Extensively discuss about 3 other methodologies for developing e- commerce websites.

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