BSIT-62 E-Commerce

Assignment: TA (Compulsory)1) What arethe categories of operations under E-Commerce? Explain.Ans:-Broadly speaking the following categories of operations came under ecommerce:i. Transactions between a supplier/a shopkeeper and a buyer or between two companies over a public network like the service provider network (like ISP). With suitable encryption of dataand security for transaction, entire operation of selling/buying and settlement of accounts can be automated.ii. Transactions with the trading partners or between the officer of the company located at different locations.iii. Information gathering needed for market research.iv. Information processing for decision making at different levels of management.v. Information manipulation for operations and supply chain management.vi. Maintenance of records needed for legal purposes, including taxation, legal suits etc.Vii.Transactions for information distributions to different retailers, customers etc. includingadvertising, sales and marketing.2) What is the role of encryption in E-Commerce? Explain.Ans:-Encryption can help with authentication, non repudiability, and asset management.Authentication is also a significant problem, and the vendor is usually responsible to ensure that the person using the credit card is its owner. Without encryption there is not way to do this.Security- public-key encryption techniques are being incorporated in variouselectronic mailsystems. This will enable systems to ensure the privacy of EDI messages.3) Explain the architecture frame work of electronic commerce?Ans:-Theelectroniccommerceapplicationarchitectureconsistsofsixlayersoffunctionality, or functionality, or services: (1) applications; (2) brokerage services, data or transaction management; (3) interface and support layers; (4)secure messaging,security,andelectronicdocumentinterchange;(5)middlewareandstructureddocumentinterchange;and(6)networkinfrastructureandbasiccommunications services.(i) Electronic Commerce Application Services:Theapplication serviceslayer ofe-commerce willbecomprised ofexisting andfuture applicationsbuiltontheinnatearchitecture.Threedistrictclassesofelectronic commerceapplicationscanbedistinguished;customer-to-business,business-to-business, and in tra-organization.

(ii) Information Brokerage andManagement:Theinformationbrokerageandmanagementlayerprovidesserviceintegration throughthenotionofinformationbrokerages,thedevelopmentofwhichis necessitated by the increasing information resource fragmentation. We use the notion ofinformationbrokeragetorepresentanintermediarywhoprovidesservice integration between customers and information providers, given some constraint such as a lowprice, fast service, orprofit maximizationfor aclient.Information brokerage does more than just searching. It addresses the issue of addingvalue to the information that is retrieved. For instance, inforeign exchange trading,information is retrieved about the latestcurrency exchange ratesin order to hedge currency holdings to minimize risk and maximize profit. With multiple transactions being the norm inthe real world, service integration becomes critical.

(iii) Interface and Support Services:Interfaceandsupportservices,willprovideinterfacesforelectroniccommerce applications such as interactive catalogs and will support directory services functions necessary for information search and access. Interactive catalogs are the customized interface to consumer applications such ashome shopping.An interactive catalog is an extension of the paper-based catalog and incorporates additional features such as sophisticated graphics and video to make theadvertisingmore attractive.

(iv)Secure Messagingand Structured DocumentInterchange Services:Theimportanceofthefourthlayer,securedmessaging,isclear.Broadlydefined,messaging is the software that sits betweenthe network infrastructureand the clientsor electronic commerce applications, masking the peculiarities of the environment. Ingeneral, messaging products are not applications that solve problems; they are more enablers of the applications thatsolve problems.Messagingservicesoffersolutionsforcommunicatingnon-formatted(unstructured)data-letters, memos, reports as well as formatted (structured) data such as purchase orders, shipping notices, and invoices. It supports both synchronous (immediate) and asynchronous (delayed) message delivery and processing. It is notassociated with any particular communication protocol. No preprocessing is necessary, although there is an increasing need for programs to interpret the message. Messaging is well suited for both client-server and peer-to-peer computingmodels.

(v) Middleware Services:Middleware is a relatively new concept that emerged only recently. With the growth ofnetworks, client-server technology, and all other forms of communicating between /among unlike platforms, the problems of getting all the pieces to work together grew.Insimpleterms,middlewareistheultimatemediatorbetweendiversesoftware programs that enables them talk to one another.Another reason for middle ware is the computing shift from application centric to data centric.Toachievedatacentriccomputing,middle wareservicesfocusonthree elements: transparency, transaction security and management, and distributed object management and services.(vi) Transparency:Transparencyimpliesthatusersshouldbeunawarethattheyareaccessingmultiple systems. Transparency is essential for dealing with higher-level issues than physical media and interconnection that the underlying network infrastructure is in charge of.Theidealpictureisoneofavirtual{network:acollectionofwork-group,departmental, enterprises, andinterenterpriseLANs thatappearstothe enduser or clientapplicationtobeaseamlessandeasilyaccessedwhole.Transparencyis accomplished using middle ware that facilitates a distributed computing environment.Thegoalisformtheapplicationstosendarequesttothemiddlewarelayer,which then satisfies the request any wayit can, usingremote information.

4. List the OMCs [order Management Cycle] generic steps.ANS:-OMC [Order Management Cycle] has the following generic steps:Order Planning and Order GenerationCost Estimationand PricingOrder Receipt and EntryOrder Selection andPrioritizationOrder SchedulingOrder Fulfillment and DeliveryOrder Billing and Account /Payment ManagementPost-sales Service

5. Explain mercantile models from themerchants perspective?ANS:-Theorder-to-deliverycyclefromthemerchantsperspectivehasbeenmanaged with an eye toward standardization and cost.To achieve abetter understanding, it isnecessary to examine theorder management cycle (OMC) that encapsulates the more traditional order-to-delivery cycle. OMC has the following generic steps.

i.Order Planning and Order GenerationThe business process begins long before an actual order is placed by the customer.The first step is order planning. Order planning leads into order generation. Orders are generatedinnumberofwaysinthee-commerceenvironment.Thesalesforce broadcastsads(directmarketing),sendspersonalizede-mailtocustomers(cold calls), or creates a WWW page.

ii.Cost EstimationandPricingPricing is the bridge between customer needs and company capabilities. Pricing at the individual order level depends on understanding, the value to the customer that is generated by each order, evaluating the cost of filling each order; and instituting a system that enables the company to price each order based on its valued and cost.Although order-based pricing is difficult work that requires meticulous thinking and deliberate execution, the potential for greater profits is simply worth the effort.

iii.OrderReceipt andEntryAfter an acceptable price quote, the customer enters the order receipt and entryphase of OMC. Traditionally, this was under the purview of departments variously titled customer service, order entry, the inside sales desk, or customer liaison. These departmentsarestaffedbycustomerservicerepresentatives,usuallyeithervery experienced, long-term employees or totally inexperienced trainees. In either case,these representatives are in constant contact with customers.

iv.Order Selection and PrioritizationCustomer service representatives are alsooften responsible for choosing which orders to accept and which to decline. In fact, not all customer orders are created equal;some are simply better for the business than others.Anothercompletelyignoredissue concernsthe importanceoforderselection and prioritization.Companies that put effort into order selection and link it to their business strategy stand to make more money.

v.Order SchedulingDuring the ordering scheduling phase the prioritized orders get slotted into an actual productionoroperationalsequence.Thistaskisdifficultbecausethedifferent functionaldepartmentssales,marketing,customerservice,operations,or production-may have conflicting goals.Communication between the functions is often nonexistent, with customer service reporting to sales and physically separated from production scheduling, which reportsto manufacturing or operations. Theresult is lack ofinterdepartmental coordination.

vi.Order Fulfillment andDeliveryDuring the order fulfillment and delivery phase the actual provision of the product or service is made. While the details vary from industry to industry, in almost every company this step has become increasingly complex. Often, order fulfillment involves multiplefunctionsandlocations.Themorecomplicatedthetaskthemore coordination required across the organization.

vii.Order Billingand Account / Payment ManagementAfter the order has been fulfilled and delivered, billing is typically handled by the finance staffs, who view their job as getting the bill out efficiently and collecting quickly.

viii.Post-sales ServiceThisphaseplaysanincreasingly importantroleinallelements ofacompanysprofit equation: customer value, price, and cost. Depending on the specifics of the business,itcanincludesuchelementsasphysicalinstallationofaproduct,repairand maintenance, customer training, equipment upgrading and disposal. Because of the information conveyed and intimacy involved, post sales service can affect customer satisfaction and company profitability foryears.6. What are thethree types electronic tokens? Explain.ANS:-Electronic tokens are of three types:Cashorreal-time.Transactionsaresettledwiththeexchangeofelectronic currency. An example of on-line currency exchange is electronic cash(e-cash)Debit or prepaid. Users pay in advance for the privilege of getting information.Examplesofprepaidpaymentmechanismsarestoredinsmartcardsand electronic purses that store electronic money.Credit or postpaid. The server authenticates the customers and verifies with the bankthatfundsareadequatebeforepurchase.Examplesofpostpaid mechanisms are credit / debit cardsand electronic checks.7. What is e-cash? Givethe properties of e-cash.ANS:-Electronic cash (e-cash) is a new concept in on-line payment systems because it combines computerized convenience with security and privacy that improve on paper cash. Its versatility opens up a host of new markets and applications. E-cash presents someinterestingcharacteristicsthatshouldmakeitanattractivealternativefor payment over the Internet.E-cash focuses on replacing cash as the principal payment vehicle in consumer-oriented electronic payments.Thepredominanceofcashindicatesanopportunityforinnovativebusinesspractice that revamps the purchasing process where consumers are heavy users of cash. To really displace cash, the electronic payment systems need to have some qualities ofcashthatcurrentcreditanddebitcardslack.Forexample,cashisnegotiable,meaning it can be given or traded to someone else. Cash is legal tender, meaning the payee is obligated to take it. Cash is a bearer instrument, meaning that possession isprimefacileproof of ownership. Also, cash can be held and used by anyone even those who dont have a bank account, and cash places no risk on the part of theaccept-orthat the medium of exchange may not be good.Properties of e-cash: E-cash must have the following four propertiesMonetary valueInteroperabilityRetrievabilitySecurity E-cash must have a monetary value; it must be backed by either cash (currency), bank-authorized credit, or a bank-certified cashierscheck. When e-cash created by one bank is accepted by others, reconciliation must occurwithoutanyproblems.Statedanotherway,e-cashwithoutproperbank certification carries the risk that when deposited, it might be returned for insufficient funds.E-cash must beinter-operable thatis, exchangeable aspayment for other e-cash, paper cash, goods or services, lines of credit, deposits in banking accounts, bank notes or obligations, electronic benefits transfers, and the like. E-cash must be storable and retrievable. The cash could be stored on a remote computersmemory,insmartcards,orinothereasilytransportedstandardor special-purpose devices. Because it might be easy to create counterfeit cash that is stored in a computer, it might be preferable to store cash on a dedicated device that cannot be altered. This device should have a suitable interface to facilitate personal authentication using passwords or other means and a display so that the user canview the cards contents.E-cash should not be easy to copy or tamper with while being exchanged; this includes preventing or detecting duplication anddouble-spending.Counterfeiting poses a particular problem, since acounterfeiter may, in the Internetenvironment, be anywhere in the world and consequently bedifficult to catch withoutappropriate international agreements. Detection is essential in order to auditwhether prevention is working. Then there is thetricky issue of double spending(DFN88). For instance,one could use e-cash simultaneously to buy something in Japan, India, and England. Preventing double-spending from occurring is extremely difficult if multiple banks areinvolved in the transaction. For this reason, mostsystems rely on post-fact detection andpunishment.Assignment: TB (Compulsory)PART A1. Explain different operations carried out in e-commerce.Ans:-1) Transaction between a supplier/ a shopkeeper and a buyer or between two companies over a public network like the service provider network (like ISP). With suitable encryption of data and security for transaction, entire operation of selling/buying and settlement of accounts can be automated.2) Transaction with the trading partners or between the officers of the company located at different locations.3) Information gathering needed for market research.4) Information processing for decision making at different levels of management.5) Information manipulation for operations and supply chain management.7) Transaction for information distributions to different retailers, customers etc. Including adverting, sales and marketing.The use of computers in these area not only make the operations quicker, but also error free and provides for consolidated approach towards the problem.It is not that the concept of e-commerce is totally without side effect.There are several areas of security, safety against fraud etc., the concept of legal acceptance that is however to be solved.2. What are the basic banking services provided in e-commerce ?Ans:-1).Basic banking services:-normal customer would be transacting with his bank most of the time. They are mainly related to personal finances. A customer has with his bank can be classified into the following:i)Checking his accounts statementsii)Round the clock banking (ATM)iii)Payment of bills etc.iv) Fund transfer andv)Updating of his pass books etc.2).Home shopping:-We assume it is television based shopping. It may be noted that this concept is picking up now in India in a small way, wherein the channels set apart only a very small portion of their broadcasting time to teleshopping. Customer can order the items over phone. The goods are delivered to his home and payment can be made in the normal modes. Concepts of traditional marketing like negotiations, trial testing etc. are missing from this scheme and it is most suitable for those customers who are almost sure of what they need to buy but who are to busy to go to the shops.3).Home entertainment: The next example of this type of commerce is home entertainment. Dubbed on line movies, it is possible for the user to select a movie/CD online and make his cable operator play the movie exclusively for him (movie on demand) cause against paymentlike Tata Sky. Payment can be either online/ payable to his account. It is also possible to play interactive games online/download them to your computer to play. The concept of downloading games/news etc. At a cost to the mobiles is also a similar concept.4).Micro-transaction for information: The telephone directories provide a basic type of micro-transaction. If we want by one particular type of item say books they list the addresses and phone numbers of the various book dealers whom we may contact. Similar facilities are available on the internet may be for more number of items and also with more details. This can be though of as an extension of the earlier described television based ordering.3. Explain the three stages of e-commerce architecture on web ?Ans:-The electronic commerce application architecture consists of six layers of functionality or services:(1)Applications Services:The application services layer of e-commerce will be comprised of existing and hope applications built on the native architecture.(2)Brokerage services, data or transaction management:The information brokerage and management layer provides service integration through the concept of information brokerages, the development of which is necessitated by the increasing information resource fragmentation. The concept of information brokerage to represent an intermediary who provides service integration between customers and information providers, given some constraint such as a low price, fast service, or profit maximization for a client. In foreign exchange trading, information is retrieved about the latest currency exchange rates in order to hedge currency holdings to minimize risk and maximize profit. The brokerage function is the support for data management and traditional transaction services. Brokerages may provide tools to accomplish more sophisticated, time-delayed updates or future- compensating transactions.(3)Interface and support layers:Interface and support services, will provide interfaces for electronic commerce applications such as interactive catalogs and will support directory services job needed for information search and access. Interactive catalogs are the modified interface to consumer applications such as home shopping. An interactive catalog is an extension of the paper-based catalog and incorporates additional features. The primary difference between the two is that unlike interactive catalogs, which deal with people, directory support services interact directly with software applications. For this reason, they need not have the multimedia flash and ballet generally associated with interactive catalogs.4. What are the desirable characteristics of an electronic market place ?Ans:-Desirable characteristics of E-Marketplace:The following criteria are essential for consumer-oriented electronic commerce:i).Critical mass of buyers and sellers. The trick is getting a critical mass of corporations and consumers to use electronic mechanisms. In other words, the electronic marketplace should be the first place customers go to find the products and services they need.ii).Opportunity for independent evaluations and for customer dialogue and discussion. In the marketplace, not only do users buy and sell products or services, they also compare notes on who has the best products and whose prices are outrageous. The ability to openly evaluate the wares offered is a fundamental principle of a viable marketplace.iii).Negotiation and bargaining. No market place is complete if it does not support negotiation. Buyers and sellers need to be able to haggle over conditions of mutual satisfaction, including money, terms and conditions, delivery dates, and evaluation criteria.iv).New products and services. In a viable marketplace, consumers can make requests for products and services not currently offered and have reasonable expectations that someone will turn up with a proposed offering to meet that request.v).Seamless interface. The biggest barrier to electronic trade is having all the pieces work together so that information can flow seamlessly from one source to another. This requires standardization. On the corporate side, companies need compatible EDI software and network services in order to send electronic purchase orders, invoices, and payments back and forth.5. Explain electronic tokens present in payment systems.Ans:-None of the banking or selling payment methods is completely adequate in their present form for the consumer-oriented e-commerce environment. Totally new forms of financial instruments are also being developed. One such new financial instrument iselectronic tokensin the form ofelectronic cash / money or checks.Electronic tokens are designed as electronic analogs of various forms of payment backed by a bank or financial institution.Simply stated, electronic tokens are equivalent to cash that is backed by a bank.Electronic tokens are of three types:Cash or real-time. Transactions are settled with the exchange of electronic currency. An example of on-line currency exchange is electronic cash (e-cash).Debit or prepaid. Users pay in advance for the privilege of getting information. Examples of prepaid payment mechanisms are stored in smart cards and electronic purses that store electronic money.Credit or postpaid. The server authenticates the customers and verifies with the bank that funds are adequate before purchase. Examples of postpaid mechanisms are credit / debit cards and electronic checks. PART B1. a) How does the commence and e-commerce are related ? Explain.(chech answer itself)Ans:-Concept of Commerce and E-Commerce:-Commerce is normally associated with the buying and selling of items. Commerce is one of the oldest activities of human beings and the concept of traders selling and buying items is a part of history. Markets are a common place where the buyers and sellers meet along with their products. Money is also an essential part of the market place. The concept of money, we have several concepts of banking, various methods of representing and transferring money like cheques, MOUs, Drafts etc.The key element of e-commerce is information processing. Every stage of commerce, except of route production of goods and their physical delivery can be automated. The tasks that can be automated include information gathering, processing, and manipulation and information distribution.b) What are the desirable characteristics of e-commerce ?Ans:-Desirable characteristics of E-Commerce: Commonsense tells us that few transactions are friendlier for e-marketing than others. We list out the desirable features of a hypothetical market pace let us call it e-market.a).A minimal size of the place:Obviously for any such place to thrive there is a critical size, below which it is not profitable to operate. This minimal number of buyers and sellers characterizes the profitability of the place.b).A scope for interactions:Interactions include trial runs of the products, classifications of doubts on the part of the customers, details of after sales services, ability to compare different products and of course scope for negotiations and bargaining.c).Scope for designing new products:The customer need not buy only what is available. He can ask for modifications, up-gradations etc. The supplier must be able to accept these and produce made to order items.d).A seamless connection to the marketplace:It is obvious that each customer will be operating with a different type of computer, software, connectivity etc. There should be available standards sot that any of these costumers will be able to attach himself to any of the markets without changing his hardware/software/interfaces etc.e).Recourse for disgruntled users:It is nave to believe that transaction of such a place end up in complete satisfaction to all parties concerned. Especially because of the facelessness of the customer and the supplier, there should be a standard recourse to settle such disputes.2. a) Explain the architecture frame work of electronic commerce ?Ans:-The electronic commerce application architecture consists of six layers of functionality or services:(1)Applications Services:The application services layer of e-commerce will be comprised of existing and hope applications built on the native architecture.Three district classes of electronic commerce applications can be famous:a) Customer-to-business:b) Business-to-business:c) Intra-organization:(2)Brokerage services, data or transaction management:The information brokerage and management layer provides service integration through the concept of information brokerages, the development of which is necessitated by the increasing information resource fragmentation. The concept of information brokerage to represent an intermediary who provides service integration between customers and information providers, given some constraint such as a low price, fast service, or profit maximization for a client (3)Interface and support layers:Interface and support services, will provide interfaces for electronic commerce applications such as interactive catalogs and will support directory services job needed for information search and access. Interactive catalogs are the modified interface to consumer applications such as home shopping. An interactive catalog is an extension of the paper-based catalog and incorporates additional features.(4)Secure messaging, security, and electronic document interchange:The importance of the fourth layer, secured messaging, is clear. Messaging is the software that sits between the network infrastructure and the clients or e-commerce applications, masking the peculiarities of the environment. Messaging products are not applications that solve problems; they are more enablers of the applications that solve problems.(5)Middleware and structured document interchange: Middleware is a relatively new concept. With the growth of networks, client-server technology, and all other forms of communicating between / among unlike platforms, the harms of getting all the pieces to work together grew. Middleware is the ultimate mediator between diverse s/w programs that enables them talk to one another. Middleware is the computing shift from application centric to data centric.(6)Network infrastructure and basic communications services:Transparency implies that users should be unaware that they are accessing multiple systems. Transparency is essential for dealing with higher-level issues than physical media and interconnection that the underlying network infrastructure is in charge of. Transparency is accomplished using middle ware that facilitates a distributed computing environment.Marketing researchers have isolated several types of purchasing:1.Specifically planned purchases. The need was recognized on entering the store and the shopper bought the exact item planned.2.Generally planned purchases. The need was recognized, but the shopper decided in-store on the actual manufacturer of the item to satisfy the need.Reminder purchases. The shopper was reminded of the need by some store influence. This shopper is influenced by in-store advertisements and can substitute products readily.3.Entirely unplanned purchases. The need was not recognized entering the store like gift items.b) List the OMCs (order management cycle) generic steps.Ans:-1)Order Planning and Order Generation: The business process begins long before an actual order is placed by the customer. The first step is order planning. Order planning leads into order generation. Orders are generated in number of ways in the e-commerce environment. 2)Cost Estimation and Pricing: Pricing is the bridge between customer needs and company capabilities. Pricing at the individual order level depends on understanding, the value to the customer that is generated bye each order, evaluating the cost of filling each order. 3)Order Receipt and Entry: After an acceptable price quote, the customer enters the order receipt and entry phase of OMC.4)Order Selection and Prioritization: Customer service representatives are also often responsible for choosing which orders to accept and which to decline. In fact, not all customer orders are created equal; some are simply better for the business than others.5)Order Scheduling: Ordering scheduling phase the prioritized orders get slotted into an actual production or operational sequence.6)Order Fulfillment and Delivery: The order fulfillment and delivery phase the actual provision of the product or service is made.