E - Commerce

E-Commerce is an integration of communication, data management and security capabilities that allows organizations to exchange information about sale of goods and services.

Electronic v/s Traditional Commerce

• Information exchange

network computers / person – person

• Processing

Electronic / Paper

• Cost

Reduced / More

• Advertisement

throughout the world / limited area

•Expansion

Easier & cheaper / Difficult & Expensive

•Identifications required

Digital signature / Driver’s license, passport

• Processing Time

Less / More

• Market Analysis

Easier / Difficult

• Banking

Net Banking / Traditional Banking

(e Cash, e Check, EFT etc.) / (Cash, Check, Credit cards etc.)

Electronic Commerce

Electronic Document Interchange

Electronic Publishing

Electronic Messaging

Corporate Digital Library

Electronic Fund Transfer(EFT)

Marketing, Advertising

Electronic Data Interchange (EDI)

Sales, Customer Support

E- Mail, Video ConferencingFax, Mobile Services

Information Sharing

Collaborative Work

E – Commerce Major Spread Areas

Corporate Digital Library

Information Sharing

• Technical Data Interchange

Collaborative Work

• Virtual & Team Based Enterprise

• Outsourcing

•Demand driven Manufacturing

• Net Banking

Advantages of E- Commerce• Instant World wide availability

• Reduce paperwork

• More affordable

Lower Sales & Marketing costs

Reduced processing costs

Reduced inventory cost

• Reduced cycle time

• Improved product analysis

• Easier entry into new markets

• Improved market analysis

• Better customer service

• Faster access of information

• Easy access to geographically remote areas

• Net Banking

E-Commerce Categories• B to C (Business to Consumer)

• Virtual storefront

• E-Banking

•B to B (Business to Business)

• Supplier Management

• Inventory Management

• Distribution Management

• Payment Management

• C to C (Consumer to Consumer)

• Auction using Sites (eBay, Baazi)

B2B / B2C

Inter corporate sales Corporate to customer sales

More investigative Less investigative

Lesser Media attention Greater media attention

Sites more informative & Sites to attract traffic, convert to buyers

Technical

Direct or Shared channel Shared channel

90% of E-commerce revenue 10% of total E-commerce revenue

Requires negotiations Requires discounts, attractive offers

B2B Business ModelsMarketplace / Exchange (B2B hubs) eg. OracleExchange.com DirectAg.com, e-Steel.com

(Bring buyers & sellers together to reduce procurement costs)

• E-Distributor eg. Grainger.com

( Connects businesses directly with others reducing sales cycle)

• Service Providers eg. Employeematters.com

(Supports companies through online business services)

•Matchmaker eg. iShip.com

( Helps businesses find what they want and need on the net)

•Informediary eg. Doubleclick.net

( Gathers information about customers and use it to help advertisers find appropriate audiences )

B2C Business Models• Portal eg. Yahoo.com, AOL.com, MSN.com, Rediff.com etc.

(integrated package of services as search, news, chat, music downloads, calculators etc.)

• E-tailer eg. Amazon.com,Wallmart.com etc.

(On line version of retail, distribution store)

• Content Provider eg. WSI, sportsline.com, CNN.com etc.

(Information & news provider)

• Transaction Broker eg. E-Trade.com etc.

(online transactions brokers, travel agents etc.)

• Service Provider eg. xDrive.com, myCFO.com etc.

(sells services)

• Community Providers eg. About.com, iVallage.com etc.

(Individuals with common interests & hobbies share notes)

Virtual Enterprise

It is an organization composed of geographically dispersed membership, intersecting several traditional organizations, communicating using electronic means.

• within large corporations

• part of business alliances

• Among individuals working independently

Communication channel

Leased lines Internet

Software

Internet servers Reporting software

Database software Accounting software

• Hardware

Server Phone connection

LAN Cable MODEM

Setup

Successful Storefront Ingredients

• Generating Demands

• Ordering

• Fulfillment

• Processing Payments

• Service & Support

• Security

•Community

Generating Demands• Traffic attracted

• Lookers converted to buyers

Online Advertisement

• Banner Ads.

• Targeted E-Mail

• Reference Bouncers

• Partnership

• Contest Promotions

Ordering• Consistent

• Attributes not overstated

• Pages to have consistent look & feel

• Maintain navigation bars

• Eliminate redundant information

• Ease ordering

• Calculate total costs

• use shopping carts

• Accept different payment substitutes

• Include bail out mechanism

Fulfillment

• Create orders

• Sent confirmation / tracking number

• Timely undamaged delivery

Processing Payments

• e-Cash (Digicash.com)

•Check Model (Checkfree.com)

• Credit Model (Credit Cards)

Service & Support

• Automatic call back

• Click to dial

• Co-browsing

Security

• Data confidentiality (encryption,decryption)

• Authentication (Digital Signature)

• Access Control (Firewalls)

• Data Integrity (encryption, Digital Signature)

Community

• Build Loyalty

•Encourage repeat business

• E-Mail special offers

• Cross sell related items

• Crediting frequent business

EDI (Electronic Data Interchange)

Computer to computer exchange of standardized information.

ANSI (American National Standard Institute)

EDI is the transmission in the standard syntax of unambiguous information of business or strategic significance between computers of independent organizations.

Customer

Vendor

PO generated by purchasing system

Sales order entry system

Examples of EDI

Customer

Vendor

Invoice generated by billing system

Accounts payable system

Examples of EDI

Features of EDI• Primary tool a Software which transforms data

to & from ANSI ASC X12 standard format.

• Begins & End with exit & entry points of business applications.

• Uses point to point connectivity

• Data transmitted by

• Dedicated mode

• Dial up mode

Dial up mode

• Direct communication using Net

• VAN provider engaged EDI on NET

Wall-Mart : Links with suppliers (Seminole Manufacturing Co. Ltd.) to reduce delivery time.

General motors : Fund transfer, shipping receipts are sent from GM plant to the computer center where they are matched against electronic invoices and purchase orders.

   US Customs : Accepts electronic custom documentation in advance of goods shipment which reduces port delay.

•      Buyer benefits:

1. Lower inventory level

2. Quick Order Acknowledgement

3. Efficient invoice progressing

4.Productivity enhancing tool

•      Supplier Benefits

1. Elimination of problems and delays caused by order entry errors

2. Personal reduction

3. Inventory reduction

4. Improved Cash flow

5. Improved Customer Service

6. Improved Sales tracking Cost Savings.

 

Benefits of EDI

VAN ’s “Electronic Mailbox” used to deposit EDI transactions & retrieve messages when convenient.

VAN (Value Added Network)

VANTrading Company Transport Company

Financial Institution Manufacturing Company

Translate incoming document

Route to Mailbox ID

Releases data at user’s request

Improved quality

• Focus on core competencies

• Better record keeping

• Reduce process time

• Reduced Inventory

• Better information for management decision

• Enjoy low total cost of ownership

• Expand trading partner community

•Ability to support multiple data formats and standards

Advantages of VAN

FEDI

(Financial Electronic Data Interchange)

Electronic transfer of payments between a payer, a payee & their respective banks.

EFT (Electronic Fund Transfer)

ACH ( Automated Clearing House)

EFT

Instantaneous payment using online transactions

Payers Bank Payees BankFunds Transfer

ACH

Payers Bank Payees Bank

X Y

VAN

Clearing House

Remittance Information Remittance Information

Payment Authorization

Payment Settlement

Notice

Transfer of Funds