Information Technology

By Md. Monowar Hossain, FCA,CISA, CPA,CPFA(UK)

[email protected]

Information Technology
Module-04 : 4. Electronic Commerce Systems
Electronic
(9) Electronic Commerce Fundamentals
Commerce Systems
(10) e-Commerce Applications and Issues

e-Commerce applications and issues

• E-commerce is here to stay.

• The Web and e-commerce are key
industry drivers.
• It’s changed how many companies do
business.
• It’s created new channels for our
customers. Companies are at the e-
commerce crossroads, and there are
many ways to go.

04.10.01 E-commerce is changing how companies do business both internally and

externally with their customers, suppliers, and other business partners.

How to Plan E-Business

Initiatives in Established
Companies

Many large and mature

companies - which still form
most of the economy-have
difficulty analyzing the
opportunities and difficulties
created by the Internet. Here is
a planning process, validated at
several established companies,
that puts e-business into
perspective and helps make it
manageable.
As managers confront a variety of e-commerce alternatives, the way companies apply e-
commerce to their businesses is also subject to change. The applications of e-commerce by
many companies have gone through several major stages as e-commerce matures in the world
of business.

E-commerce between businesses and consumers (B2C) moved from merely offering
multimedia company information at corporate Web sites (brochureware) to offering products
and services at Web storefront sites via electronic catalogs and online sales transactions.

B2B e-commerce, in contrast, started with Web site support to help business customers serve
themselves, and then moved toward automating intranet and extranet procurement systems.

One of the most important things to understand about e-commerce is that by converting a
business model from bricks and mortar to an e-commerce approach, the transaction costs (i.e.,
the costs of doing business with a customer or supplier) drop dramatically. Thus, anything that
can be digital will be digital.

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 Information Technology
By Md. Monowar Hossain, FCA,CISA, CPA,CPFA(UK)
[email protected]

04.10.02 e-Commerce Trends

The trends taking place in B2B e-commerce participants moved

the e-commerce B2C e-commerce is quickly from self-service on the Web to
applications that notice also moving toward configuration and customization capabilities
how B2C e-commerce a self-service and extranets connecting trading partners.
moves from simple Web model in which As B2C e-commerce moves toward full-
storefronts to interactive customers service and wide-selection retail Web
marketing capabilities that configure and portals, B2B is also trending toward the use
provide a personalized customize the of e-commerce portals that provide catalog,
shopping experience for products and exchange, and auction markets for business
customers, and then services they wish customers within or across industries. Both
toward a totally integrated to buy, aided by of these trends are enabled by e-business
Web store that supports a configuration capabilities like customer relationship
variety of customer software and online management and supply chain
shopping experiences. customer support management, which are the hallmarks of
as needed. the customer-focused and inter-networked
supply chains of a fully e-business–enabled
company.

20
The ecommerce industry is always changing and this year has been no different. More
than ever, merchants are creating and/or improving their ecommerce businesses to meet
customers where they are. While it may seem like everything in ecommerce is evolving, we
narrowed it down to the biggest trends that will affect businesses in the coming months and
years.

20
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 Information Technology
By Md. Monowar Hossain, FCA,CISA, CPA,CPFA(UK)
[email protected]

04.10.03 E-commerce applications that focus on the consumer share an important

Business-to goal: to attract potential buyers, transact goods and services, and build
Consumer customer loyalty through individual courteous treatment and engaging
e-Commerce community features.
What does it take to create a successful B2C e-commerce
business venture?
To create a Web business initiative that offers attractive products or services of
great customer value, with a business plan based on realistic forecasts of
profitability within the first year or two of operation - a condition that was lacking
in many failed dot-coms. Such failures, however, have not stemmed the tide of
millions of businesses, both large and small, that are moving at least part of their
business to the Web. So let’s take a look at some essential success factors and
Web site capabilities for companies engaged in either B2C or B2B e-commerce.

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 Information Technology
By Md. Monowar Hossain, FCA,CISA, CPA,CPFA(UK)
[email protected]

04.10.04 On the Internet, the barriers of time, distance, and form are broken down,
e-Commerce and businesses are able to transact the sale of goods and services 24
Success hours a day, 7 days a week, 365 days a year with consumers all over the
Factors world. In certain cases, it is even possible to convert a physical good (CDs,
packaged software, a newspaper) to a virtual good (MP3 audio,
downloadable software, information in HTML format).

1. A basic fact of Internet retailing is that all retail Web sites are
created equal as far as the “location, location, location” imperative of
success in retailing is concerned.
2. No site is any closer to its Web customers, and competitors offering
similar goods and services may be only a mouse click away.
3. This scenario makes it vital that businesses find ways to build
customer satisfaction, loyalty, and relationships so that customers
keep coming back to their Web stores. Thus, the key to e-tail (retail
business conducted online) success is to optimize several key
factors, such as selection and value, performance and service
efficiency, the look and feel of the site, advertising and incentives to
purchase, personal attention, community relationships, and security
and reliability.
Briefly examine each of these factors that are essential to the success of
a B2C Web business:

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 Information Technology
By Md. Monowar Hossain, FCA,CISA, CPA,CPFA(UK)
[email protected]

04.10.05 Most business-to-consumer (B2C) e-commerce ventures take the form

Web Store of retail business sites on the World Wide Web. Whether a huge retail
Requirements Web portal like Amazon.com or a small specialty Web retailer, the
primary focus of such e-tailers is to develop, operate, and manage their
Web sites so they become high-priority destinations for consumers who
will repeatedly choose to go there to buy products and services.
Thus, these Web sites must be able to demonstrate the key factors for
e-commerce success that we have just covered. In this section, let’s
discuss the essential Web store requirements that you would have to
implement to support a successful retail business on the Web.

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 Information Technology
By Md. Monowar Hossain, FCA,CISA, CPA,CPFA(UK)
[email protected]

04.10.06 1. Before you can launch your own retail store on the Internet, you must
Developing a build an e-commerce Web site.
Web Store 2. Many companies use simple Web site design software tools and
predesigned templates provided by their Web site hosting service to
construct their Web retail store.
3. That includes building your Web storefront and product catalog Web
pages, as well as tools to provide shopping cart features, process
orders, handle credit card payments, and so forth.
4. Larger companies can use their own software developers or hire an
outside Web site development contractor to build a custom-designed e-
commerce site.
5. Also, like most companies, you can contract with your ISP (Internet
service provider) or a specialized Web hosting company to operate and
maintain your B2C Web site.
6. Once you build your Web site, it must be developed as a retail Web
business by marketing it in a variety of ways that attract visitors to
your site and transform them into loyal Web customers.
7. Your Web site should include Web page and e-mail advertising and
promotions for Web visitors and customers, as well as Web advertising
exchange programs with other Web stores.

8. Also, you can register your Web business with its own domain name
(e.g., yourstore.com ), as well as registering your Web site with the
major Web search engines and directories to help Web surfers find your
site more easily.
9. In addition, you might consider affiliating as a small business partner
with large Web portals like Yahoo! and Netscape, large e-tailers and
auction sites like Amazon and eBay, and small business e-commerce
portals like Microsoft’s Small Business Center.

04.10.07 • Your Web store needs to be discovered by your customers, and this
Getting means getting listed in the popular search engines. You can submit
Customers your Web site to search engines such as Yahoo, Google, Live, and
to Find You others, and each will begin looking at your Web pages and listing you
when appropriate search terms are entered.
• Waiting for your site to show up competitively ranked with all the
other similar sites could take weeks and even months. There is a
science to search engine ranking and it is an essential element in Web
store success.

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 Information Technology
By Md. Monowar Hossain, FCA,CISA, CPA,CPFA(UK)
[email protected]

Search engine optimation (SEO) is considered a subset of search

engine marketing, and it focuses on improving the number and/or
quality of visitors to a Web site over “natural” (also called “organic” or
“algorithmic” search engine) listings.

• The term SEO can also refer to search engine optimizers, an industry of
consultants who carry out optimization projects on behalf of clients.
• Search engines display different kinds of listings on a results page, including
paid advertising in the form of pay-per-click (PPC) advertisements and paid
inclusion listings, as well as unpaid organic search results and keywords specific
listings, such as news stories, definitions, map locations, and images.
• As an Internet marketing strategy, SEO considers how search engines work
and what people search for.
• Optimizing a Web site primarily involves editing its content and HTML coding to
both increase its relevance to specific keywords and to remove barriers to the
indexing activities of search engines.
• SEO requires making changes to the source code of a site, it is often most
effective when incorporated into the initial development and design of a site,
leading to the use of the term “search engine friendly” to describe designs,
menus, content management systems, and shopping carts that can be
optimized easily and effectively.

04.10.08 • Once your retail store is on the Web and receiving visitors, the Web site must
Serving help you welcome and serve them personally and efficiently so that they
Your become loyal customers.
So most e-tailers use several Web site tools to create user profiles, customer
Customers •
files, and personal Web pages and promotions that help them develop a one-
to-one relationship with their customers.
• This effort includes creating incentives to encourage visitors to register,
developing Web cookie files to identify returning visitors automatically, or
contracting with Web site tracking companies like DoubleClick and others for
software to record and analyze the details of the Web site behavior and
preferences of Web shoppers automatically.

• Providing customer support for your Web store is an essential Web site
capability. Thus, many e-tail sites offer help menus, tutorials, and lists of FAQs
(frequently asked questions) to provide self-help features for Web shoppers.

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 Information Technology
By Md. Monowar Hossain, FCA,CISA, CPA,CPFA(UK)
[email protected]

04.10.09 • A Web retail store must be managed as both a business and a Web
Managing a site, and most e-commerce hosting companies offer software and
Web Store services to help you do just that.
• Companies provide their hosting clients with a variety of management
reports that record and analyze Web store traffic, inventory, and sales
results.
• Other services build customer lists for e-mail and Web page
promotions or provide customer relationship management features to
help retain Web customers.
• Some e-commerce software includes links to download inventory and
sales data into accounting packages like QuickBooks for bookkeeping
and preparation of financial statements and reports.
• Web-hosting companies must enable their Web store clients to be
available online 24 hours a day and seven days a week all year. This
availability requires them to build or contract for sufficient network
capacity to handle peak Web traffic loads and redundant network
servers and power sources to respond to system or power failures.
• Most hosting companies provide e-commerce software that uses
passwords and encryption to protect Web store transactions and
customer records, as well as to employ network firewalls and security
monitors to repel hacker attacks and other security threats.
• Many hosting services also offer their clients 24-hour tech support to
help them with any technical problems that arise

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 Information Technology
By Md. Monowar Hossain, FCA,CISA, CPA,CPFA(UK)
[email protected]

04.10.10 Business-to-business e-commerce is the wholesale and supply side

Business-to- of the commercial process, where businesses buy, sell, or trade with
Business other businesses.
e-Commerce
(B2B)

B2B e-commerce relies on many different information technologies, most

of which are implemented at e-commerce Web sites on the World Wide
Web and corporate intranets and extranets.
• B2B applications include electronic catalog systems, electronic trading
systems such as exchange and auction portals, electronic data
interchange, electronic funds transfers, and so on.
• All of the factors for building a successful retail Web site that we
discussed previously also apply to wholesale Web sites for business-
to-business e-commerce.
• Many businesses are integrating their Web-based e-commerce
systems with their e-business systems for supply chain management,
customer relationship management, and online transaction
processing, as well as with their traditional, or legacy, computer-based
accounting and business information systems. This integration ensures
that all e-commerce activities are integrated with e-business processes
and supported by up-to-date corporate inventory and other databases,
which in turn are automatically updated by Web sales activities.

04.10.11 The latest e-commerce transaction systems are scaled and customized
e-Commerce to allow buyers and sellers to meet in a variety of high-speed trading
Marketplaces platforms: auctions, catalogs, and exchanges.
Businesses of any size can now buy everything from chemicals to
electronic components, excess electrical energy, construction materials,
or paper products at business-to-business e-commerce
marketplaces.

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 Information Technology
By Md. Monowar Hossain, FCA,CISA, CPA,CPFA(UK)
[email protected]

Five major types of e-commerce marketplaces used by businesses

today.

• Many B2B portals provide several types of marketplaces.

• They may offer an electronic catalog shopping and ordering site for
products from many suppliers in an industry. Or they may serve as
an exchange for buying and selling via a bid-ask process or at
negotiated prices.
• Very popular are electronic auction Web sites for B2B auctions of
products and services.

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 Information Technology
By Md. Monowar Hossain, FCA,CISA, CPA,CPFA(UK)
[email protected]

• B2B trading system that offers exchange, auction, and reverse

auction (where sellers bid for the business of a buyer) electronic
markets.
• Many of these B2B e-commerce portals are developed and hosted by
third-party market-maker companies who serve as infomediaries
that bring buyers and sellers together in catalog, exchange, and
auction markets.
• Infomediaries are companies that serve as intermediaries in e-
business and e-commerce transactions.
• B2B e-commerce sites make business purchasing decisions faster,
simpler, and more cost effective because companies can use Web
systems to research and transact with many vendors.
• Business buyers get one-stop shopping and accurate purchasing
information. They also get impartial advice from infomediaries that
they can’t get from the sites hosted by suppliers and distributors.
• Thus, companies can negotiate or bid for better prices from a larger
pool of vendors. Suppliers benefit from easy access to customers
from all over the globe.

04.10.12 Companies are recognizing that success will go to those who can execute
Clicks and clicks-and-mortar strategies that bridge the physical and virtual worlds.
Bricks in Different companies will need to follow very different paths when
e-Commerce deciding how closely-or loosely-to integrate their Internet initiatives with
their traditional operations.

• Illustrates above the spectrum of alternatives and benefit trade-offs

that e-business enterprises face when choosing an e-commerce
clicks-and-bricks strategy.
• E-business managers must answer this question: Should we
integrate our e-commerce virtual business operations with our
traditional physical business operations or keep them separate?
• As shows, companies have implemented a range of
integration/separation strategies and made key benefit trade-offs in
answering that question.

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 Information Technology
By Md. Monowar Hossain, FCA,CISA, CPA,CPFA(UK)
[email protected]

04.10.13 The Internet is just another channel that gets plugged into the business
e-Commerce architecture.
Integration • Integrated clicks-and-bricks strategies, where their e-commerce
business is integrated in some major ways into the traditional
business operations of a company.

• The business case for such strategies rests on:

 Capitalizing on any unique strategic capabilities that may
exist in a company’s traditional business operations that
could be used to support an e-commerce business.
 Gaining several strategic benefits of integrating e-commerce
into a company’s traditional business, such as sharing
established brands and key business information, joint
buying power, and distribution efficiencies.

04.10.14 • An e-commerce channel is the marketing or sales

e-Commerce channel created by a company to conduct and manage its
Channel chosen e-commerce activities.

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 Information Technology
By Md. Monowar Hossain, FCA,CISA, CPA,CPFA(UK)
[email protected]

• How this e-commerce channel is integrated with a

company’s traditional sales channels (e.g., retail/wholesale
outlets, catalog sales, and direct sales) is a major
consideration in developing its e-commerce strategy.
• Deciding on a clicks-and-bricks strategy and e-commerce
channel depends heavily on whether a company’s unique
business operations provide strategic capabilities and
resources to support a profitable business model
successfully for its e-commerce channel.
• Most companies are implementing some measure of clicks-
and-bricks integration because “the benefits of integration
are almost always too great to abandon entirely.

Critical Factors of E-Business

04.10.15
Critical Factors 21
e-Business application development is based on four critical
e-Business factors: (1) where the assets reside (databases),
(2) how they are processed (applications),
(3) who manages the processes or applications
(IT/Operating Staff) and
(4) who is the beneficiary (end-user)?

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 Information Technology
By Md. Monowar Hossain, FCA,CISA, CPA,CPFA(UK)
[email protected]

04.10.16 22
The Key Differences Between E-Commerce and
Key Differences E-Business
Between • E-Business is not limited to just buying and selling products
E-Commerce and or services. Whereas E-Commerce is the name of buying
E-Business and selling products/services with the help of the internet.
• E-Commerce is a main part of E-Business.
• There is no need for an E-Business to have a physical
presence. If the company has physical offices along with
their online business activities then it can be referred to as
E-Commerce.
• E-Commerce supports any kind of business transaction
related to money, but E-Business includes monetary and
allied activities.
• E-Commerce needs the internet to be able to communicate
with their online customers from all over the world.
E-Business can use the internet, intranet and extranet to
be able to connect with the parties.

04.10.17 Order Fulfillment Process

Order Fulfillment Order fulfillment process is based on all the activities needed
Process for a customer to get his ordered product or service including
In E-Business the related customer services. What is e-business and how the
orders are processed is discussed with the help of particular
figures.
(1) Product inquiry
You are surfing the website of any well-reputed business brand
manufacturing laptops, desktops, or monitors, and able to view
their all products.
(2) Sales Quote
Laptop prices, screen size or usage are clearly mentioned on
the website for the sales quotation for customers.
(3) Order Configuration
Once the customers select what he proposed to purchase, the
number of products are easily adjusted or canceled during this
phase.

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 Information Technology
By Md. Monowar Hossain, FCA,CISA, CPA,CPFA(UK)
[email protected]

23

(4) Order Booking

This phase includes the booking of products available on the
website, such as desktops, laptops, or necessary accessories.
(5) Order Confirmation
This process ensures the details of the order such as prices
and quantities are accurate.
(6) Billing
Billing is the process that enables customers to pay for the
products by Visa, cheque, ATM, or other available payment
methods.
(7) Order Planning
Every customer has different options for delivery, so the order
will be delivered accordingly.
(8) Order Processing
Once the order is confirmed, the company ensures the right
item in the right quantity, time, place, price, and condition to
the right customer.
(9) Shipment
According to the customers’ requirements, the products will be
delivered by means of an express, Air-to-Sea initiative, and so
on.
(10) Delivery
The products will be delivered within a given time slot at the
right address.
(11) Settlement
It is the method to settle all the remaining charges, like
delivery costs or extra products’ care expenditure.
(12) Returns
Most of the companies offer the returns option with their
particular terms and conditions. So, any customer who has
received the products with any technical or physical problems
of products, they can easily return their products within a
specified period.

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 Information Technology
By Md. Monowar Hossain, FCA,CISA, CPA,CPFA(UK)
[email protected]

04.10.18 Electronic Business (E-Business) is the administration of

E-commerce conducting any business using internet, extranet, web and
is a part of intranet. This would include buying and selling of goods or
e-business services using commercial transactions conducted electronically
along with providing customer or technical support with the help
of the internet. E-business is similar to E-commerce but it is
more than just a simple act of buying and selling services or
goods online. In fact, it is the method of utilizing digital
information and advanced communication technologies to
streamline different business processes – from the initial to
implementation phase.
E-business includes a lot of business processes including
- online order processing,
- CRM (Customer Relationship Management),
- supply chain management and
- many more.
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