Transcript E-commerce
E-COMMERCE AND E-BUSINESS STEPS TO RISE ABOVE THE HERD New networked digital economy would drive and change the twenty first century - Alvin Toffler (Sociologist) Today E-Commerce makes it possible. WHAT IS E-COMM ? • Buying and selling over the internet of – products – information – services WHAT IS E-COMM ? • E-Business is the transformation of – organization’s business – functions processes • Business Transformation through the application of – Technologies – Philosophies – Computing paradigms ESTIMATED SIZE OF E-COMM MARKET • India 1998 2001 $1.2 million $160 million • worldwide 2001 $300bn (source : Forester Research) E-commerce is a dynamic set of technologies , applications and business practices that link an enterprises, customer and suppliers through electronic transactions. -Richard Campbell President (Bright Star Systems) Customers Suppliers E-COMM Technology Business processes SOME POSITIVE FACTORS • • • • • Growing web usage Rapid application tools Single market place Global reach Add-on’s of new application tools everyday Electronic Commerce As Online Selling • means doing business online or selling and buying products and services through Web storefronts. • Products being traded may be physical products such as used cars or services (e.g. arranging trips, online medical consultation, and remote education). • Increasingly, they include digital products such as news, audio and video, database, software and all types of knowledge-based products. • electronic commerce is similar to catalog shopping or home shopping on cable TV. Electronic Commerce As a Market • Electronic commerce is not limited to buying and selling products online. • For example, a neighborhood store can open a Web store and find the world in its door step. • But, along with customers, it will also find its suppliers, accountants, payment services, government agencies and competitors online. • This online or digital partners demand changes in the way we do business from production to consumption • Along with online selling, electronic commerce will lead to significant changes in the way products are customized, distributed and exchanged and the way consumers search and bargain for products and services and consume them. What is the electronic marketplace? • Electronic markets ordinarily refer to online trading and auctions • for example, – online stock trading markets – online auction for computers and other goods. • The electronic marketplace refers to the emerging market economy where producers, intermediaries and consumers interact electronically or digitally in some way. • The electronic marketplace is a virtual representative of physical markets. • The economic activities undertaken by this electronic marketplace collectively represent the digital economy. • The electronic marketplace resembles physical markets (the one we know) in many aspects. As in physical markets, components of the digital economy include: players (market agents such as firms, suppliers, brokers, shops and consumers) products (goods and services;) and processes (supply, production, marketing, competition, distribution, consumption, etc.). When did the age of electronic commerce begin? • Business-centered electronic commerce began more than two decades ago with the introduction of electronic data interchange (EDI) between firms – (sending and receiving order, delivery and payment information, etc.) • each time you use automatic teller machines or present your credit cards, you transact business electronically. • These EDI and ATM, however, operate in a closed system; they are of a more convenient communications medium, strictly between the parties allowed in. • The World Wide Web (WWW), the Internet's client-server, opened up a new age by combining the open Internet and the easy user interface. • WWW was created at the CERN Lab for Particle Physics in Geneva in 1991 (with its Mosaic, the predecessor of Netscape). • It took two years for Mosaic to penetrate the Internet, and another two years before businesses and the general public took notice of its potential. TYPES OF APPLICATIONS • B2B (virtual market portals and market places and e-stores) • B2C ( e-sales) • One to one marketing (e-promotion) • Customer service (e-CS) • Electronic Payments ( e-Payments, e-Banking) • Electronic Auctions SOME E-TRANSACTIONS • An executive ordering a book on the way to airport maybe from AMAZON.COM and read it, while on the plane. • Customer ordering a camera for his grandson from REDIFF.COM in a remote village in India to be delivered next day for his excursion trip. • A doctor ordering an important drug from MEDICINE.COM with help of his mobile in the middle of a surgery to save his patient. E-COMM IMPLEMENTATION • Business is round the clock 365 days • organizations display its products/services in a virtual market place • orders pour from every corner of the globe. • Immediate deliveries are expected. • Wider range of customers can be reached from one continent to another COMPLEX ISSUES • • • • • Pricing Multiple tax Government policies Shipping modes Effectiveness in supply chain management • Procurement and resource availability • Just in time delivery standards How to order online? • Connect to the web site, example amazon.com • Fill up the registration form to become a registered customer (to help in easy identification for future business) • Click on the items of interest and add on to the shopping cart • After completing the order, check the shopping list. • Put your credit card number and delivery date and address. • Once order is accepted, order number is generated and sent thru email to the shopper. E-COMM PROCESS E-PRESENTATION OF GOODS AND SERVICES ONLINE ORDER PROCESSING BILL PRESENTATION ONLINE PAYMENT PROCESSING TRANSACTION HANDELING Electronic payment systems • There are dozens of electronic payment systems proposed or already in practice. • They can be grouped into two based on what information is being transferred online. – Trusted third party – Notational fund transfer • The first type uses a trusted third party • all sensitive information (such as bank account and credit card numbers) for its clients • include both buyers and sellers. • When there is a transaction, order information is transmitted along with information about payment confirmation and clearing • all of which do not include sensitive information. • In effect, no real financial transaction is done online. • In this type of system, the information need not be encrypted since financial transactions are done completely off-line. • The second type is an extension of the conventional notational fund transfer. • In credit card or check transactions, sensitive information is being exchanged. • For example, you give your credit card to a merchant, who sends the card number through phone line and receives confirmation. • Banks meanwhile receive the same information and adjust buyer's and merchant's accounts accordingly. • The information being transmitted online in this case is encrypted for security. • The primary example is the use of digital credit cards (e.g. CyberCash and VISA/Mastercard's SET-based transactions). • This type is becoming the mainstay of online payment methods because consumers are familiar with this system • The problem with transactional security has been overly played on the traditional media • But with proper caution and encryption, the Internet may be more secure Shop Safely in Unknown Corners • First, take a long look at the welcome page. • Note the number of links to other sites, as well as the nature of those sites. Ties to associations, guilds, or other organizations denote legitimacy. • Also look for BBBOnLine, TrustE, and VeriSign Digital ID logos. These organizations work to maintain security and integrity on the Internet, and they let members post a logo linking back to their pages. If the logo or link isn't clickable, it may be pirated. • Try to learn how long the site has been in business. If you can't tell, send the proprietor an e-mail query. What's the deal with digital currency? Do we need them? • Digital money, currency or coins are but an encrypted serial number representing money • but money in all sense since they are convertible to real money (e.g. US dollar) if desired. • (Just as US dollar bill is only a paper with funny graphics.) It took hundreds of years before people accepted paper money (and checks) as payment. • Digital currency will become dominant when paperbased economy finally turns into the digital economy. • In the short run, digital money is just a convenient form of existing money since digital money is created against existing money. • Next, check the Usenet boards to see if there are any flames (complaints) posted against the site, and then post your own follow-up query. • Also look for a variety of payment schemes offered-credit card using a secure server, phone, personal check, or money order. • Some sites also let you mail in your credit card information. • If you're asked to e-mail this information, don't; there are countless ways for hackers to intercept it. Is the Internet secure? – The electronic marketplace lacks some elemental safeguards available in physical markets. – For example, buyers have certain assurance about a seller with a retail store although that seller might be operating a bogus shop that particular moment. – But bogus operations are more difficult to recognize on the internet. – Indeed, any online trading partner cannot be sure about the identity of the other person. – Technologies and legal frameworks are needed to address such problems, e.G. Nation-wide digital ids. BENEFITS OF ETRANSACTIONS • Cost control leading to larger profit margin due to – on-line channel – paper based processes replaced by electronic transactions – EFT’s • faster and more responsive service to customers • Cheaper cost in advertising and marketing What is supply chain management? – A supply chain is a collection of interdependent steps that, when followed, accomplish a certain objective such as meeting customer requirements. – Supply-chain management is a generic term that encompasses • the coordination of order generation • order taking • and offer fulfillment/distribution of products, services, or information. – Numerous, independent firms and customers are involved in a supply chain (e.g., manufacturers and parts suppliers; parcel shippers, senders and receivers; wholesalers and retailers). – The WWW and extranets (connected intranets) have shown a great potential in linking and managing these entities into a virtual organization. SUPPLY CHAIN MANAGEMENT • SCM is about managing resources upstream and downstream.(intranet, extranet support systems) • Manufacturers and suppliers can – – – – – share sales forecasts manage inventories schedule labor optimize deliveries improve productivity • faster dissemination of information and enable two way communication. CUSTOMER RELATIONSHIP MANAGEMENT • Attracting profitable customers and keeping them loyal • analysing customer behaviour thru the concept of customer self service • enables – management of your relation with your customer – gives customers tools to manage their relations with you BUSINESS TRENDS TO BE SUCCESSFUL IN E-COMM • Have a professional looking site clean and easy to navigate • Encourage memberships • Have a 30/60/90 days money back guarantee • Have competitive price • Have quality customer services • Use post customer testimonies • Offers for a free trial periods • Have a contact page TRIVIAL FACTOIDS • Business thru internet is largest in North America and Canada with over 36 million users on the net • Trade in US is expected to rise by $1.3 trillion in 2003 • More than 43 percent durable goods manufacturers worldwide are expected to do business by 2001 of over $ 99 billion • companies that wholesale office supplies and electronic goods and scientific goods will sell over $7.1 AMAZON.COM • A virtual store on the web without real world address. • Has over 4.70 million book titles on sale • from $100 million 1997sales rose to $ 1 billion in 1998 • The destination is Fernley, Nev., a town where truck stops outnumber stoplights and the home to Amazon's 786,000square-foot warehouse. It is one of 12 centers worldwide. Eight are located in strategic spots around the U.S. Amazon's regular 500-employee workforce in Fernley has doubled to about 1,000. The warehouse has surged to near capacity, and the workers, who are used to the center's 24-hours-a-day, seven-days-a-week schedule, are working harder than ever. • This holiday season will be Amazon's biggest • The company has already booked orders for 7.2 million items since Nov. 2. • That compares with 20 million items ordered in all of November and December last year.