LECTURE NOTES ON

E-COMMERCE COURSE
CODE: CIT 4204

By
Dr. Kelvin K. Omieno
 Lecture-2

2.1 Technological convergence:

Technological convergence is the tendency that as technology changes, different

technological systems sometimes evolve toward performing similar tasks.
Digital convergence refers to the convergence of four industries into one conglomerate,
ITTCE (Information Technologies, Telecommunication, Consumer Electronics, and
Entertainment). Previously separate technologies such as voice data and productivity
applications, and video can now share resources and interact with each other
synergistically.
Telecommunications convergence, network convergence or simply convergence are broad
terms used to describe emerging telecommunications technologies, and network
architecture used to migrate multiple communications services into a single network.
Convergence in this instance is defined as the interlinking of computing and other
information technologies, media content, and communication networks that has arisen as
the result of the evolution and popularization of the Internet as well as the activities,
products and services that have emerged in the digital media space.
Convergent services, such as VoIP, IPTV, Mobile TV, Smart TV, and others, tend to
replace the older technologies and thus can disrupt markets. IP-based convergence is
inevitable and will result in new service and new demand in the market.

2.2 Technology Implications:

Convergent solutions include both fixed-line and mobile technologies. Recent examples of new,
convergent services include:

Using the Internet for voice telephony

Video on demand
Fixed-mobile convergence
Mobile-to-mobile convergence
 Location-based services
Integrated products and bundles

Convergent technologies can integrate the fixed-line with mobile to deliver convergent solutions.
Convergent technologies include:

IP Multimedia Subsystem
Session Initiation Protocol
IPTV
Voice over IP
Voice call continuity
Digital video broadcasting - handheld

2.3 Collaborative Product Development:

CPD is a business strategy, work process and collection of software applications that
facilitates different organizations to work together on the development of a product. It is
also known as collaborative product definition management (cPDM).
Collaborative Product Development helps individual users and companies manage, share
and view your CAD projects without the cost and complexity of purchasing an entire PDM
or PLM solution. CPD comes in the form of a Software as a service delivery model, which
allows for rapid iterations and little or no downloads and installs.
Exactly what technology comes under this title does vary depending on whom one asks;
however, it usually consists of the Product Lifecycle Management (PLM) areas of: Product
Data Management (PDM); Product visualization; team collaboration and conferencing
tools; and supplier sourcing software. It is generally accepted as not including CAD
geometry tools, but does include data translation technology.

Technologies and methods used:

Clearly general collaborative software such as email and chat (instant messaging) is used within
the CPD process. One important technology is application and desktop sharing, allowing one
person to view what another person is doing on a remote machine. For CAD and product
visualization applications an ‗appshare‘ product that supports OpenGL graphics is required.
Another common application is Data sharing via Web based portals.
Specific to product data

With product data an important addition is the handling of high volumes of geometry and
metadata. Exactly what techniques and technology is required depends on the level of
collaboration being carried out and the commonality (or lack thereof) of the partner sites‘
systems.

Specific to PLM and CAx collaboration

Collaboration using PLM and CAx tools requires technology to support the needs of:

1. People: Personnel of different disciplines and skill levels;

2. Organizations: Organizations throughout an enterprise or extended enterprise with
different rules, processes and objectives;
3. Data: Data from different sources in different formats.

Appropriate technologies are required to support collaboration across these boundaries.

➢
People
Effective PLM collaboration will typically require the participation of people who do not
have high level CAD skills. This requires improved user interfaces including tailorable user
interfaces that can be tailored to the skill level and specialty of the user.
Improved visualization capabilities, especially those that provide a meaningful view of
complex information such as the results of a fluid flow analysis will leverage the value of
all participants in the collaboration process. Effective collaboration requires that a
participant be freed from the burden of knowing the intent history typically imbedded
within and constricting the use of parametric models.
➢
Organizations
Community collaboration requires that companies, suppliers, and customers share
information in a secure environment, ensure compliance with enterprise and regulatory
rules and enforce the process management rules of the community as well as the individual
organizations.

➢
Data
 The most basic collaboration data need is the ability to operate in a MultiCAD
environment. That is, however, only the beginning. Models from multiple CAD sources
must be assembled into an active digital mockup allowing change and/or design in context.

2.4 Content Management System:

A content management system (CMS) is a computer application that allows publishing,

editing and modifying content, organizing, deleting as well as maintenance from a central
interface. Such systems of content management provide procedures to manage workflow
in a collaborative environment.
CMSs are often used to run websites containing blogs, news, and shopping. Many
corporate and marketing websites use CMSs. CMSs typically aim to avoid the need for
hand coding, but may support it for specific elements or entire pages.

Main features of CMS:

The function and use of content management systems is to store and organize files, and
provide version-controlled access to their data. CMS features vary widely. Simple
systems showcase a handful of features, while other releases, notably enterprise systems,
offer more complex and powerful functions. Most CMS include Web-based publishing,
format management, revision control (version control), indexing, search, and retrieval.
The CMS increments the version number when new updates are added to an already-
existing file. Some content management systems also support the separation of content
and presentation.
A CMS may serve as a central repository containing documents, movies, pictures, phone
numbers, scientific data. CMSs can be used for storing, controlling, revising,
semantically enriching and publishing documentation.

The content management system (CMS) has two elements:

➢
Content management application (CMA) is the front-end user interface that allows a user,
even with limited expertise, to add, modify and remove content from a Web site without
the intervention of a Webmaster.
➢
Content delivery application (CDA) compiles that information and updates the Web site.
2.5 Web Traffic:
Web traffic is the amount of data sent and received by visitors to a web site.
Web traffic is measured to see the popularity of web sites and individual pages or sections within
a site. This can be done by viewing the traffic statistics found in the web server log file, an
automatically generated list of all the pages served. A hit is generated when any file is served.

The following types of information are often collated when monitoring web traffic:

The number of visitors.

The average number of page views per visitor – a high number would indicate that the
average visitors go deep inside the site, possibly because they like it or find it useful.
Average visit duration – the total length of a user's visit. As a rule the more time they
spend the more they're interested in your company and are more prone to contact.
Average page duration – how long a page is viewed for. The more pages viewed, the
better it is for your company.
Domain classes – all levels of the IP Addressing information required to deliver
Webpages and content.
Busy times – the most popular viewing time of the site would show when would be the
best time to do promotional campaigns and when would be the most ideal to perform
maintenance
Most requested pages – the most popular pages
Most requested entry pages – the entry page is the first page viewed by a visitor and
shows which are the pages most attracting visitors
Most requested exit pages – the most requested exit pages could help find bad pages,
broken links or the exit pages may have a popular external link

Top paths – a path is the sequence of pages viewed by visitors from entry to exit, with the
top paths identifying the way most customers go through the site
Referrers; The host can track the (apparent) source of the links and determine which sites
are generating the most traffic for a particular page.

2.6 Content marketing:

Content marketing is any marketing that involves the creation and sharing of media and
publishing content in order to acquire and retain customers.
 It is a strategic marketing approach focused on creating and distributing valuable,
relevant, and consistent content to attract and retain a clearly-defined audience — and,
ultimately, to drive profitable customer action.
Basically, content marketing is the art of communicating with your customers and
prospects without selling.
It is non-interruption marketing. Instead of pitching your products or services, you are
delivering information that makes your buyer more intelligent.
2.7 Call centre:
A call centre is a centralised office used for receiving or transmitting a large volume of
requests by telephone.
An inbound call centre is operated by a company to administer incoming product support
or information inquiries from consumers.
Outbound call centers are operated for telemarketing, solicitation of charitable or political
donations, debt collection and market research.
A contact centre is a location for centralised handling of individual communications,
including letters, faxes, live support software, social media, instant message, and e-mail.
A call centre has an open workspace for call centre agents, with work stations that
include a computer for each agent, a telephone set/headset connected to a telecom switch,
and one or more supervisor stations. It can be independently operated or networked with
additional centres, often linked to a corporate computer network, including mainframes,
microcomputers and LANs.
The contact centre is a central point from which all customer contacts are managed.
Through contact centres, valuable information about company are routed to appropriate
people, contacts to be tracked and data to be gathered. It is generally a part of company‘s
customer relationship management.

2.8 Components of call centre:

There are 6 key components which should be integrated into the call centre operation:
Location, building and facilities
Customer
Technology
Process
People
Finance and business management
➢
Location, building and facilities

Where a centre is located is critical in terms of the cost of the building but more importantly
the ability to recruit and retain employees to work in the centre. The ease and cost to get to a
centre is important for those employed in the centre but also in the integration with the Head
Office functions that the centre needs to work with. The facilities and working environment
is more critical than for functional line departments because of the intensity with which the
Agents have to sit at their desks and the need to manage resource patterns. Visiting a call
centre and looking at how it might feel to work in it will be extremely telling as to how good
the centres performance is, but also how the organisation view and treat their employees.
➢
Customer

Customers can be anyone, and the Agent needs to have the skills to be able to adapt their
style and vocabulary to suit different customer types. The Agent talks to more customers in
any one day that any other person in the organisation. If you want to know what is going on
with customers, ask the Agents! With average call durations of less than 3 minutes, how do
you form a relationship and build loyalty from a customer in that time. That is one of the
biggest challenges that the Agents face, especially given many customers do not like the
impersonal touch that call centres often provide.
➢
Technology

There are significant amounts of technology available and it is very easy to be bamboozled
by it all! It very much depends on the size and nature of your business as to what you require.
The basic equipment to handle calls is the Automated Call Distributor but these can range
from basic to a Rolls Royce! Many centres do not fully utilise the technology that they have.

In addition there is usually a disjoint between what the technology can do and what it is
actually used for.
➢
Process

Every centre has a multitude of processes, but the biggest challenge that it faces is to
understand the end to end process from the customer perspective. The customer journey is
what happens from the point in time when a customer decides to contact you through to the
completion of that request or transaction. How long does this journey take and what does it
feel like taking the steps along the way. How long is spent waiting? Does the agent have the
customer details to hand? Can the agent answer the query first time? Does the fulfilment
when expected? One very easy but critical way of looking at the customer journey is to
mystery shop the centre and to see what it really feels like to be the customer. Put yourselves
in the shoes of your key customer demographic type and call your own centre today.
➢
People

People are the most critical asset in a call centre as it is they who really deliver the business
performance. Unfortunately the investment and perception of your staff may be rather poor.
 The people (Agents) often have to deal with difficult situations when things have gone wrong
in your organisation and deal with a large volumes of calls that result, whilst not always
having the necessary training or skills. However, the teams in Centres can be very resilient
and are often very social, making the centre a great place to work. There are many different
roles on offer and so they can a good environment to start and develop a career.
➢
Finance and business management

There will be more management information statistics in a call centre than in any other part
of the organisation. The centre is measured from every different angle but unfortunately, this
does not always give a complete picture!

One of the most challenging roles is the planning, measuring and reviewing of performance
because so many centres are under pressure from calls and other expectations, that being able
to step back and take an objective view maybe difficult. Most centres are run to very tight
budgets so factors such as turnover of staff will have a huge impact.

2.9 Customer-Premises Equipment:

Customer-premises equipment or customer-provided equipment (CPE) is any terminal and

associated equipment located at a subscriber's premises and connected with a carrier's
telecommunication channel at the demarcation point . The demarc is a point established in a
building or complex to separate customer equipment from the equipment located in either the
distribution infrastructure or central office of the communications service provider.

CPE generally refers to devices such as telephones, routers, switches, residential gateways (RG),
set-top boxes, fixed mobile convergence products, home networking adapters and Internet access
gateways that enable consumers to access communications service providers' services and
distribute them around their house via a local area network (LAN).

2.10 Supply Chain Management:

It is the process of planning, implementing, and controlling the operations of the supply chain
with the purpose to satisfy customer requirements as efficiently as possible. Supply chain
management spans all movement and storage of raw materials, work-in-process inventory, and
finished goods from point-of-origin to point-of-consumption.

Supply chain management must address the following problems:

Distribution Network Configuration: Number and location of suppliers, production

facilities, distribution centers, warehouses and customers.
Distribution Strategy: Centralized versus decentralized, direct shipment, cross docking, pull
or push strategies, third party logistics.
 Information: Integrate systems and processes through the supply chain to share valuable
information, including demand signals, forecasts, inventory and transportation.
Inventory Management: Quantity and location of inventory including raw materials, work-
in-process and finished goods.

2.11 Features Of Supply Chain Management:

In electronic commerce, supply chain management has the following features.

An ability to source raw material or finished goods from anywhere in the world
A centralized, global business and management strategy with flawless local execution

• On-line, real-time distributed information processing to the desktop, providing total supply
chain information visibility
The ability to manage information not only within a company but across industries and
enterprises
The seamless integration of all supply chain processes and measurements, including third-
party suppliers, information systems, cost accounting standards, and measurement systems
The development and implementation of accounting models such as activity based costing
that link cost to performance are used as tools for cost reduction
A reconfiguration of the supply chain organization into high-performance teams going from
the shop floor to senior management.

2.12 Components of Supply Chain Management:

The following are five basic components of SCM.

➢
Plan:
This is the strategic portion of SCM. You need a strategy for managing all the resources
that go toward meeting customer demand for your product or service. A big piece of planning
is developing a set of metrics to monitor the supply chain so that it is efficient, costs less and
delivers high quality and value to customers.

➢
Source:
Choose the suppliers that will deliver the goods and services you need to create your product.
Develop a set of pricing, delivery and payment processes with suppliers and create metrics
for monitoring and improving the relationships. And put together processes for managing the
inventory of goods and services you receive from suppliers, including receiving shipments,
 verifying them, transferring them to your manufacturing facilities and authorizing supplier
payments.

➢
Make:
This is the manufacturing step. Schedule the activities necessary for production, testing,
packaging and preparation for delivery. As the most metric-intensive portion of the supply
chain, measure quality levels, production output and worker productivity.

➢
Deliver:
This is the part that many insiders refer to as logistics. Coordinate the receipt of orders from
customers, develop a network of warehouses, pick carriers to get products to customers and
set up an invoicing system to receive payments.

➢
Return:
The problem part of the supply chain. Create a network for receiving defective and excess
products back from customers and supporting customers who have problems with delivered
products.

2.13 Measuring A Supply Chain’s Performance:

The performance of a supply chain is evaluated by how it reduces cost or increases value. SCM
performance monitoring is important; in many industries, the supply chain represents roughly 75
percent of the operating budget expense. Three common measures of performance are used when
evaluating SCM performance:
➢
Efficiency focuses on minimizing cost by decreasing the inventory investment or value
relative to the cost of goods sold. An efficient firm is therefore one with a higher inventory
turnover or fewer weeks‘ worth of inventory on hand.
➢
Responsiveness focuses on reduction in both inventory costs and missed sales that comes
with a faster, more flexible supply chain. A responsive firm is proficient in an uncertain
market environment, because it can quickly adjust production to meet demand.
➢
Effectiveness of the supply chain relates to the degree to which the supply chain creates
value for the customer. Effectiveness-focused supply chains are called ―value chains‖
because they focus more on creating customer value than reducing costs and improving
productivity.
To examine the effect of the Internet and electronic commerce on the supply chain is to examine
the impact the Internet has on the efficiency, responsiveness, effectiveness, and overall
performance of the supply chain.

2.14 Advantages of Internet/E-Commerce Integrated Supply Chain:

The primary advantages of Internet utilization in supply chain management are speed, decreased
cost, flexibility, and the potential to shorten the supply chain.
➢
Speed:

A competitive advantage accrues to those firms that can quickly respond to changing
market conditions. Because the Internet allows near instantaneous transfer of information
between various links in the supply chain, it is ideally suited to help firms keep pace with
their environments. Many businesses have placed a priority upon real-time information
regarding the status of orders and production from other members of the supply chain.

➢
Cost decrease:
Internet-based electronic procurement helps reduce costs by decreasing the use of paper
and labor, reducing errors, providing better tracking of purchase orders and goods delivery,
streamlining ordering processes, and cutting acquisition cycle times.
➢
Flexibility:

The Internet allows for custom interfaces between a company and its different clients,
helping to cost-effectively establish mass customization. A manufacturer can easily create a
custom template or Web site for a fellow supply chain member with pre-negotiated prices
for various products listed on the site, making re-ordering only a mouse click away. The
information regarding this transaction can be sent via the Internet to the selling firm‘s
production floor and the purchasing firm‘s purchasing and accounting departments. The
accuracy and reliability of the information is greater than the traditional paper and pencil
transaction, personnel time and expense is reduced, and the real-time dissemination of the
relevant information to interested parties improves responsiveness. These advantages can
benefit both firms involved in the transaction.
➢
Shortening the supply chain:

Dell computers has become a classic example of the power the Internet can have on a
supply chain. Dell helped create one of the first fully Internet-enabled supply chains and
revolutionized the personal-computer industry by selling directly to businesses and
consumers, rather than through retailers and middlemen. In mid-1996, Dell began allowing
 consumers to configure and order computers online. By 1998, the company recorded
roughly $1 billion in ―pure‖ Internet orders. By reducing sales costs and attracting
customers who spend more per transaction, Dell estimates that it yields 30 percent greater
profit margins on Internet sales compared to telephone sales.

2.15 Disadvantages of Internet/E-Commerce Integrated Supply Chain:

➢
Increased interdependence:
Increased commoditization, increased competition, and shrinking profit margins are forcing
companies to increase outsourcing and subcontracting to minimize cost. By focusing on its
core competencies, a firm should be able to maximize its economies of scale and its
competitiveness. However, such a strategy requires increased reliance and information
sharing between members of the supply chain. Increased dependency on various members
of the supply chain can have disastrous consequences if these supply chain members are
unable to handle the functions assigned to them.

➢
The costs of implementation:
Implementation of a fully-integrated Internet-based supply chain is expensive. This
expense includes hardware cost, software cost, reorganization cost, and training costs.
While the Internet promises many advantages once it is fully integrated into a supply chain,
a significant up front investment is needed for full deployment.
➢
Keeping up with the change in expectations:
Expectations have increased as Internet use has become part of daily life. When customers
send orders electronically, they expect to get a quick confirmation and delivery or denial if
the order can not be met. Increasingly, in this and other ways, customers are dictating terms
and conditions to suppliers. The introduction of Internet-based supply chains make possible
the change to a ―pull‖ manufacturing strategy replacing the traditional ―push‖ strategy
that has been the standard in most industries.