2.

E-COMMERCE Frameworks and architectures

Learning objectives:

In this chapter you will learn,

1. what are the main actors and stakeholders in the area of E-Commerce.
2. how the fundamental sales process works.
3. what are the technological elements, which are characteristic for E-
Commerce and have enabled the big success of E-Commerce.

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 2. E-COMMERCE Frameworks and architectures

Outline
 Actors and stakeholders
 Fundamental sales process
 Technological elements
 Exercises

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 1. Actors and stakeholders

 E-Commerce is driven by different groups of actors and stakeholders.

 First we have persons, abbreviated by C, where C stands for (potential)
consumers or citizens.
 Secondly we have business organizations abbreviated by, B where B stands for
producers and suppliers, trade organization's or merchants, banks, insurance
companies or
 Other financial service providers, logistics & transportation firms or forwarding
agencies and last but not least several intermediaries .
 Thirdly ,G or A, where A stands for administration and G stands for Government.
 This category includes local authorities, e.g. on town level or on county level,
national authorities,
 E.g. on state level or on federation level (United states of..), and international
authorities like European Union, United Nations, etc.

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Cont’d….
 According to the specific nature of the interacting partners we talk about X2Y
business where X and Y belong to the above-mentioned categories.
 We only talk about X2Y business if there is an interchange of goods or services
and money.
 The supplier provides goods or services, the customer, be it a consumer or another
business, has to forward an appropriate amount of money to the supplier.
 This is done on the base of a contract (be it a written or an oral contract).

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 Actors and stakeholders

 There are typically mentioned relationships.

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 Actors and Cont’d…
Doing business can be mainly considered via two questions.
 Who is the initiator or driver of the business transaction?
E-commerce ->supplier driven
E-procurement(purchasing department of a company)-
customer driven
 What is the nature of the transaction?
B2C or
 B2B

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 2.2 FUNDAMENTAL SALES PROCESS

 As we are discussing E-Commerce we have to know in detail what is going on in E-

Commerce transactions.
 Thus we have to consider the basic or fundamental sales process.
 This process describes the general pattern of making business in delivering goods or
providing services and getting payments for this.

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SALES PROCESS cont’d…

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 2.2 FUNDAMENTAL SALES PROCESS

 In general we will denominate the provider of goods or services as the supplier and the
receiver of goods or services as the customer.
 Sometimes third parties are involved, e.g. shipping agents, which are denominated
specially.
 The steps and sub-steps of the primary process, including the responsible party (see figure
2), are:
 Information step:
 Search for products and services: by the customer
 Search for potential suppliers: by the customer
 Search for potential customers: by the supplier
 Communicate an offering: by the supplier
 Communicate a need: by the customer

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2.2 FUNDAMENTAL SALES PROCESS

 Initiation step:
Get into contact: either by the customer or by the supplier
 Request for delivery or service: by the customer
 offer for delivery or service: by the supplier
 Assess supplier: by the customer
 Assess customer: by the supplier
 Contract conclusion step:
 Negotiate offer: by supplier and customer
 Negotiate contract: by supplier and customer
 Place order: by the customer
Confirm order: by the supplier

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2.2 FUNDAMENTAL SALES PROCESS

 Delivery/fulfillment step:
Proceeding for physical goods:
 Pack goods: by the supplier,
 Load goods: by the supplier,
 Ship goods: by the shipping agent,
 Unload goods: by the shipping agent,
 Unpack goods: by the customer or the shipping agent or a specific service
provider,
 Assemble complex equipment at the customer’s site: by the shipping agent or a
specific service provider,
 Accept delivery: by the customer,
 Approve contract fulfillment to authorize billing: by the customer,

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2.2 FUNDAMENTAL SALES PROCESS

 Delivery/fulfillment step:
Proceeding for physical services:
 Build and maintain service fulfillment capability: by the supplier
 Come together physically because customer must be an active part in service
delivery: by the supplier and the customer
 Dene service levels: by the supplier, possibly after a negotiation with the customer
 Add service level agreement to contract: by the supplier
 Accept service fulfillment: by the customer
 Approve contract fulfillment to authorize billing: by the customer

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2.2 FUNDAMENTAL SALES PROCESS
 Delivery/fulfilment step:
Proceeding for digital goods::
 Send goods to the customer via the net or provide for download: by the supplier
 Protect goods against unauthorized access (see chapter 6 of this book): by the
supplier
 Accept delivery or confirm successful download: by the customer
 Approve contract fulfillment to authorize billing: by the customer

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2.2 FUNDAMENTAL SALES PROCESS
 Delivery/fulfillment step:
Proceeding for digital services::
 Provide service via the net: by the supplier
 Define service levels: by the supplier, possibly after a negotiation with the
customer
 Add service level agreement to contract: by the supplier
 Initiate service provision: by the customer
 Accept service fulfillment: by the customer
 Approve contract fulfillment to authorize billing: by the customer

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Cont’d…

 Billing/invoicing step:
Generate invoice: by the supplier,
 Generate attachments to invoice (e.g. protocol of service fulfillment, protocol of
final customer’s approval, certificates, etc.): by the supplier
 Forward invoice to customer (via the Web or via postal services): by the supplier
 Payment step::
 Get money from the customer by the supplier or a financial services provider

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Cont’d…

 Service/support step:::
Provide additional information for the customer (e.g. user manual, technical
documentation, etc.): by the supplier.
 Conduct customer support (e.g. recommendation for usage, FAQ, etc.): by the
supplier
Manage complaints: by the supplier
 Repair: by the supplier or a specific service provider
 Manage returns (if repair is necessary, a wrong product has been delivered or
customer wants to roll back the business): by the supplier in cooperation with the
customer
 Conduct maintenance (may be part of the product or may be a separate service
offered by the supplier): by the supplier or a specific service provider.

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 2.2.2 SECONDARY PROCESS
 The secondary process (see figure 3) can be sub-divided into
 Internal process control,
 Communication to the customer:
 Tracking & tracing: by the supplier or the shipping agent,
 Inform about order processing status: by the supplier,
 Announce delivery time: by the supplier or the shipping agent.

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 2.3 TECHNOLOGICAL ELEMENTS
 In this chapter we will discuss subjects IT people are talking about
 Technology is a major enabler of E-Commerce as we consider it here. Globally
accepted technological standards have been and still are a prerequisite and a driver of
global electronic business. Here we will follow a technology model with four layers.

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 2.3.1 BASIC TECHNOLOGIES

TCP/IP
TCP/IP is an abbreviation and stands for Transmission Control Protocol/Internet
Protocol.
This twin protocol describes the transportation of data in the Internet and was introduced
in 1978 by the USA-DoD (Department of Defence) as a standard for heterogeneous
networks.
 TCP/IP is part of the following 4-layer protocol:
 Layer 1: Local network/network access
This layer corresponds to the first layer (physical layer) and the second layer (data link)
of the ISO/OSI seven layer model (ISO = International Standards Organization, OSI =
Open Systems Interconnection).
Available technologies are:
FDDI (Fiber Distributed Data Interface), which has a ring structure, provides a
transmission rate up to 100 MBit/sec.

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Cont’d….

 Token Ring
which also has a ring structure, in which the token-possession grants the possessor
permission to transmit on the medium, is an advancement of FDDI.
It is defined by the standard IEEE 802.5 (IEEE = Institute of Electrical and Electronics
Engineers),
 Ethernet
which has the widest propagation now, actually is the primary technology.
It provides transmission rates up to 10 Gigabit/sec (Access is carried out via
CSMA/CD = Carrier Sense Multiple Access/Collision Detection; technology is based
on standard IEEE 802.3).

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 Layer 2: Internet (IP)
 This is the address layer, corresponding to the third layer (network layer) in the ISO/OSI
seven layer model.
 IPv4
 (Internet Protocol version 4) is the fourth version of the Internet Protocol (IP).
It is one of the core protocols of standards-based internetworking methods .
IPv4 is a connectionless protocol for use on packet-switched networks.
No permanent physical link between participants of the network is necessary.
It operates on a best effort delivery model, in that it does not guarantee delivery, nor
does it assure proper sequencing or avoidance of duplicate delivery.
IPv4 has a length of 4 Bytes respectively 32 bits
 IPv6
 (Internet Protocol version 6) is the most recent version of the Internet Protocol (IP)
The communications protocol that provides an identification and location system for
computers on networks and routes traffic across the Internet.
IPv6 uses a 128-bit address, allowing 2128 addresses, or more than 7.9×1028 times as 21
many as IPv4.
 Layer 3: Host-to-Host (TCP)

 TCP (Transmission Control Protocol) is a connection-oriented protocol for providing reliable

data transport service between two computers (hosts) over Internet.
 It accepts data from a data stream, divides it into chunks, and adds a TCP header creating a
TCP segment.

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 Layer 4: Process/Application

 This layer corresponds to some layers of the ISO/OSI seven layer model:
 session layer (5), presentation layer (6) and application layer (7).
 It includes several protocols, which will be discussed subsequently.
HTTP (Hypertext Transfer Protocol)
FTP (File Transfer Protocol)
SMTP (Simple Mail Transfer Protocol)
WWW (World Wide Web)

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 2.3.2 MIDDLEWARE
 Middleware consists of technologies building the link between hardware and application
software.
 The boundaries between middleware and hardware as well as between middleware and
application software are changing over time due to the technological development.
 Middleware normally is a category of general and not application specific software.
CORBA (Common Object Request Broker Architecture)
 CORBA is a standard defined by the Object Management Group (OMG) designed to
facilitate the communication of (software) systems that are deployed on diverse platforms.
 CORBA enables collaboration between systems on different :-
operating systems
programming languages
and computing hardware.

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 MIDDLEWARE Cont’d
Database systems
 In a business environment we often use a relational database system, which is optimally
suited to store and process structured data as we find it in typical business transactions.
 Typical examples for structured data are:
 Address data
 Orders
 Shipping documents
 Invoices
 Tax declarations.
Webserver
 A Webserver is a virtual computer (a piece of software), which helps to deliver Web content
that can be accessed through the Internet.
 Well-known products are:
 Apache HTTP Server
 Microsoft Internet Information Services (IIS). 25
 MIDDLEWARE Cont’d
WSDC
web service description language
XML based interface definition language that is used for describing the functionality
offered by a web service
SOAP
simple object access protocol
Protocol specification for exchanging structured information in the implementation
of web services in computer networks.

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 2.3.3 PLATFORMS/FRAMEWORKS
Portal
 A portal is a central entry and navigation point to provide access to a virtual area (of
applications or services) and to deliver additional information to the user.
 It works as an interface between user and system(s).
 Often portals are seen as the platform for an E-Commerce-strategy.
CMS
 Content management system.
 Application software that allow publishing .editing and modifying content ,organizing ,
deleting as well as maintenance form a central interface

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 Typical Applications
General software architecture for the E-commerce area

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 EXERCISES
2.4.1 QUESTIONS FOR YOUR SELF-STUDY
Q2.01:
Compare the fundamental sales process as it has been shown here to your daily life and the
traditional sales process.
What is different?
What is new?
What is missing?
Q2.02:
How much should a business manager know about technical subjects?
What is need to know?
What is nice to know?

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End of Slides…
Thank you..
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Questions..?
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