Unit 2

ECOMMERCE
Course Instructor: Abid Jameel
 Definition • E –commerce is the activity of buying or selling
of E- of products on online services or over the
Internet
Commerce
Process of
E-
Commerc
e
 • A way of organizing the activities of a business so
that each activity adds value or productivity to
the total operation of the business. In e-
commerce a number of business processes and
VALUE activities go unnoticed by the consumer and are
often taken for granted. Within an online
CHAINS IN merchants business value added activities work
together to make the business to consumer
THE interface operational in this section we
systematically analyze a company’s value and
ECOMMER how it make commerce on the internet a reality.
• In 1985, MICHAEL PORTER wrote a book called
CE competitive advantages in which he introduces
the concept of the value chain. Business receive
raw materials as input add value to them through
various processes and sell the finished product as
output to customer.
THE VALUE CHAIN SHOWS RELATIONSHIP
BETWEEN AMONG TWO ACTIVITES

PRIMARY ACTIVITIES SUPPORT ACTIVITIES

• A business unit needs support activities to make sure the primary
activities.
• Inbound logistics
• Operations
• Outbound logistics
• Marketing & Sales
• Service
PRIMARY ACTIVITIES
• Inbound logistics: these are procurement activities vendor selection, comparative
shopping, negotiating supply contract, and just in time arrival of goods.
• Operations: this is the actual conversion of raw materials received into finished product
includes fabrication, assembly, testing & packaging the product.
• Outbound logistics: this activity represents the actual distributing & shipping of the final
product. It involves warehousing, materials handling, shipping & timely delivery to the
ultimate retailer or customer.
• Marketing & Sales: this activity deals with the ultimate customer, it includes advertising,
product promotion, sales management, identifying the products customer base &
distribution channel.
• Service: this activities focuses on after sale to the customer. It includes testing,
maintenance, repair, warranty work & replacement parts.
 SUPPORT
ACTIVITIES
• Support activities are those activities that has been used to support
the primary activities. For the success implement of the primary
activities supporting activities are essential.
• Corporate Infrastructure
• Human Resource
• Technology Development
• Procurement
Corporate Infrastructure: this activity is the backbone of the business unit.
It includes general management, accounting, finance, planning and legal
services.

Human Resource: this is the unique activity of matching the right people to
the job. It involves recruitment, retention, career path development,
compensation, training & development & benefits administration.

Technology Development: this activity adds value in the way it improve the
product and the business process in the primary activities. The output of this
activity contributes to the product quality, integrity, & reliability, which make
life easier for the sales force and for customer relations.

Procurement: this activity focuses on the purchasing function and how well
it ensure the availability of quality raw material for production.
What is E-Commerce?

Electronic commerce is commonly known as e- commerce .

It is a type of industry where buying and selling of products or services is conducted

over electronic systems , such as mobile commerce , electronic fund transfer, internet
marketing, online transaction processing , electronic data interchange.
Trend of
E- • According to data released by Statista, a
German company specialising in market
and consumer data, Pakistan's e-

Commer commerce market is projected to

generate US$7.666 billion revenue in
2022. With an annual growth rate of 6.09

ce in
percent between 2022 and 2025, the
projected market volume would be US$
9.1 billion by 2025.

Pakistan
Top E-Commerce in Pakistan

OLX daraz PakWheels Zameen

Naheed Super
Shophive Homeshopping Cheetay
Market

Food Panda
Payment
Gateway
in E-
Commerc
e
INTERNET
 • Internet was started by Robert E.Kahn and Vint Cerf.
• The Father of internet is Vint Cerf. Cerf is a codesigner of the
Introductio TCP/IP protocols and the architecture of the internet.

n of • when internet was born ? October 29,1969 born the internet

messages sent from computer to computer in different
Internet : locations .
• January 1 1983 ARPANET adopted the standard TCP/IP protocal.
• Meaning of internet: A global computer network providing a
variety of information and communication facilities consisting of
interconnected networks using standardized communication
protocols.
• Definition of internet : According to Cambridge English
dictionary the internet is the large system of connected
computers around the word that allows people to share
information and communicate with each other
 Information Resources : Anyone ,Anywhere can use the internet
as an informative resource ,since it packet wirh so many articles
about almost any topics.

Education Resource : The internet can be a very handy and

Uses of
instant educative platform for any student from any machine
with an internet connectivity .

internet Online Magazines and Newspapers : Now-a-days you don’t

really need to buy a newspaper (or) magazine due to their
online availability.

Online Shopping and Commerce : This Is pretty obvious too you

can buy & sell online. A very big advantage of E-Commerce is
that you can target a wrider audience as compared to a business
which is local to a country
 Information ,knowledge, and learning.

Connectivity , Communication and Sharing

Advanta
Address mapping and contact information

Banking bills and shopping

ges of Selling and making money

Internet Collaboration work from home and access to a global workforce.

Donations and funding

Entertainment
 Bullying , trolls , stalkers and crime .

Exploitation and pornography and violent images.

Addiction , time waster , and cause distractions.

Disadvanta Never being able to disconnect.

ges of Identify theft, hacking, viruses and cheating.

Internet Spam and advertising.

Affects focus and patience.

Depression , loneliness and social isolation.

Health issue and obesity

 1. Inventions of new internet technologies for business
2. Internet is in role of business successor .
3. Internet marketing and advertising is most accessed
part of the internet by business
4. Internet is essential tool for business do product
Importance 5.
survey and testing
Internet platform helping business to sell products and
of internet : services online
6. Internet helping business to execute employee training
and development programs
7. Internet building business and customer relationship
8. Internet speedup and making business process
accurate
Different types of internet
connections

Dial –up (Analog 56 k) DSL (digital subscriber line )

Cable
Wireless
Satellite
Cellular
Tools of Internet :
HTPP (Hyper Text FTP (File Transfer
E – mail
Transfer Protocol ) Protocol)

Internet Relay WWW (World

Gopher
Chat Wide Web)

Telnet and SSH

(Secure Shell)
WEB BASED
TOOLS FOR
E-
COMMERCE
OBJECTIVES
1. Computers that support Web servers
2. Hardware requirements of typical Web server and software
packages.
3. Fundamental duties of a Web server
4. Other ancillary Web server functions
5. Specific Web server software
6. Advanced Web server tools
Web Platform Choices
• Faster servers are better than slower ones
• Good choice for the present, and for the future
• Intranet and external traffic demands
• Operating systems supported
• Scalable
WEB SERVER
• A Web server is a program that uses HTTP (Hyper Text Transfer
Protocol) to serve the files that form Web pages to users, in response
to their requests, which are forwarded by their computers' HTTP
clients.
• Dedicated computers and appliances may be referred to as Web
servers as well.
 Core capabilities

Web • Process and respond to web client

requests using the HTTP Protocol.
Server Security
Software • Validation of username and password

Feature • Processing certificates and key pairs

Sets FTP

• Transferring of files to or from the server

Web Server Software Feature Sets
• Searching
– Searching the existing site or entire web for documents
– Indexing provides full-text indexes for files stored on the server
– Data Analysis - Capture visitor information
-Who , how long , date& time , what pages were visited
Web Server Software and Tools
• Apache Http server
• Microsoft Internet Information Server
• Netscape Enterprise Server
• O’Reilly Website Professional
• Others
 Dominates the Web in numbers, largely because it’s free

Runs on many operating systems

Apache • - AIX, BSD/OS, FreeBSD, HP-UX, Irix, Linux, Microsoft NT, QNS, SCO, Solaris

Http server Security is well thought out

• Password authentication
• Digital certificate authentication
• Access restrictions
Microsoft Internet Information
Server
• Bundled (free) with Microsoft Windows NT operating system
• Robust and capable, suitable for small sites up to enterprise-class sites
• Tightly integrated security with NT
 Powerful development environment

Link management

Netscape
Enterpris Web publishing

e Server Agent services

Upload Web pages to host computer

 O’Reilly Website Professional

VARIOUS ADD-ON FLEXIBLE EASY GOOD

TOOLS SCRIPTING INSTALLATION DOCUMENTATION
 Web portal is a site that people use as a launching point
to enter the Web.

WEB A portal almost always includes a Web directory and

search engine, but it also includes other features that

PORTALS
help visitors find what they are looking for on the Web
and thus make the Web more useful.

Most portals include features such as shopping

directories, white pages and yellow pages searchable
databases, free e-mail, chat rooms, file, storage services,
games, and personal and group calendar tools.
WEB PORTALS
Personal Portals
Government Web Portals
News Portals
Corporate Web Portals
Stock Portals
Search Portals
Hosted Web Portals
 PERSONAL PORTALS : A personal portal is a site
on the World Wide Web that typically provides
personalized capabilities to its visitors, providing
a pathway to other content.

WEB GOVERNMENT WEB PORTALS: At the end of the

dot-com boom in the 1990s, many governments

PORTALS
had already committed to creating portal sites for
their citizens. Eg- australia.gov.au for Australia.

NEWS PORTALS: The traditional media rooms all

around the world are fast adapting to the new
age technologies. This marks the beginning of
news portals by media houses across the globe.
WEB PORTALS
STOCK PORTALS: Stock market portals or stock exchange portals are Web-based applications
that facilitates the process of informing the share-holders with substantial online data such as
the latest price, ask/bids, the latest News, reports and announcements.

CORPORATE WEB PORTALS: Many companies began to offer tools to help webmasters manage
their data, applications and information more easily, and through personalized views. Portal
solutions can also include workflow management, collaboration between work groups, and
policy-managed content publication.

SEARCH PORTALS: Search portals aggregate results from several search engines into one page.
HOSTED WEB PORTALS The hosted portal market fundamentally changed the composition of
portals. they served simply as a tool for publishing information instead of the loftier goals of
integrating legacy applications or presenting correlated data from distributed databases
Search Engines
• A special kind of Web page software that finds other Web pages that
match a word or phrase the user enters
• Contains three major parts:
1. Spider, crawler, or bot – searches the Web
2. Index – catalogs what is found
3. Search engine utility – provides search results
 An intelligent agent (IA) is an autonomous entity which observes
and acts upon an environment.

Intelligent agents may also learn or use knowledge to achieve

INTELLIGE
their goals.

NT Intelligent agents are often described schematically as an

abstract functional system similar to a computer program.
AGENTS
Intelligent agents are software applications that have a
predefined knowledge base and/or learning system about their
user's goals and wishes and, through adaptive reasoning, use
this information to execute their user's request.
E-COMMERCE SOFTWARE
• Businesses on the Internet can face challenges when trying to
exchange information with each other
— information such as invoices and inventory tracking information
—using XML.
• With XML and webMethods software, a manufacturing company’s
order can be translated into a Web page that both the manufacturer’s
software and the Web
• server can understand.
WEB HOSTING
• The most important factors to evaluate when selecting a hosting service include:
• Functionality
• Reliability
• Bandwidth and server scalability
• Security
• Backup and disaster recovery
• Cost
COST
ANALYSIS
 COST ANALYSIS
• A key part of creating a business plan for electronic commerce
initiatives is the process of identifying potential benefits, identifying
the costs required to generate those benefits, and evaluating whether
the benefits exceed the costs.
• Companies should evaluate each element of their electronic
commerce strategies using this cost/benefit approach.
Electronic Data Interchange [EDI]
It enables the firms to exchange business information faster, more cheaply and accurately than
possible using paper based documents.

The whole point of EDI is to enable your company to communicate with other applications that
are always on the distal end of some long distance link and always “black boxes” from the
viewpoint of your own network and applications.
It is a standard for the electronic exchange of business documents, such as invoices and
purchase orders.

Edi consists of standardized electronic message formats for common business documents such
as purchase order, request for quotation, bills of lading, invoice and similar documents.
 • Lower Processing cost: The cost of the processing EDI
documents is much lower than processing paper
documents.
• Improves the overall quality of data: Improvements in
overall quality can be achieved through better record
keeping, fewer errors in data, reduced processing time
and less reliance on human interpretation
• Helps to reduce inventory level: Inventory level can be
Benefits of reduced.EDI permits faster and accurate filling and
exchange of orders which helps to reduce the unwanted
EDI level of inventoty
• Data is entered only at the source: Transfer of
information from computer to computer is automatic
and there is no need of feeding data frequently. Helps to
manage information system effectively and efficiently.
• Customer relations can be improved: Customer
relations are improved through better quality and speed
of services.Business relations with trading partners can
also be improved .
 1. Preparation of electronic documents
• The first step in the sequence of EDI is the
collection of information and data.
• The way to collect the required information
should be same as the way to do it in the
Working of traditional system.
• However, instead of printing out the data on
EDI paper in tradition, the system has to build an
electronic file or database to store those data.
• In the case of companies who already use
computer to issue their documents like purchase
orders, they may already have some sort of
databases which store those information, then
they fan start with the next step described below.
2. Outbound translation
• The next step is to translate the electronic file or database in to a standard format according
to the specification of the corresponding document.
• The resulting data file should contain a series of structured transactions related to the
purchase order for example. If more than one company is involved in the particular
transaction, individual files should be produced for each of them.
3. Communication
• Then the computer should connect and transmit those data files to the pre arranged Value
Added Network [VAN} automatically. The VAN should then process each file and route the
appropriate electronic mailboxes according to the destination set in the file. * Inbound
translation The designated company should be able to retrieve the file from their electronic
mailboxes in a constant period, and then reverse the process by translating the file from the
standard format into the specific format required by the company’s application software.
Drawbacks
• High cost: One of the severe criticisms levelled against EDI is its high cost.
EDI applications are costly to develop and operate
• Limited accessibility: EDI applications do not allow consumers to
communicate and transact with the suppliers in an easy and a direct way,as
Networking facilities require certain software to access and communicate
forms through EDI
• Rigid requirements: EDI applications require highly structured
protocols,software etc for information interchange.EDI insists up on
transactingparties to follow rigid agreements about the structure and
meaning of data. These agreements are time consumingto negotiate,rigid
and difficult to maintain.
Cont.…
• Partial solutions: EDI applications suggest only partial solutions to
organisation in their transacting process.Complete automationof
transacting process is difficult to materialise in the constantly
changing business environment.There will be time gap between
placing order for products and the final settlement of bills.This may
lead to discrepancies between transactions.
• Closed world: The scope of EDI application is very limited.The concept
of closed world is outdated consequent on the popularity of WWW
makes it easier for organisations to enter into open web related
market place.
Components on
Electronic data
Interchange
• Standard document format
• a standard format agreed upon by both partices which do not require
complicated hardware or software to access information. Both parties
communicate direactly through a business application.
• Translator and mapper
• a translator is used to convert the raw data into meaningful information
according to specifications provided by a mapper. A mapper is used to create
conversion specification. It compiles the specification and then gives
instructions to the translator on how to convert the date.
Communication software
• a communication software is used to
transmit data and convert business
documents into a standard format. It
follows a standard communication protocol
which is incorporated in the software.

Trade agreement
• a legally binding trade agreement between
you and your trading partner.

Communication network
• a communication network provides a direct
link between trading partners who are will
to exchange business documents through
electronic data interchange.
 Modem Van Point to point link
it is a hardware device that transmits stands for value added network a a direct communication link
data from one computer to another. network that connect the computer between two computer. Some
system of one organization to trading partners affer a direct
another. connection to their edi computer.
trading partners may optimize for
this method of communication
instead of using a van.