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Brief History
1970s: Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s: Electronic Data Interchange (EDI) for e-commerce within companies
Used by businesses to transmit data from one business to another
1990s: the World Wide Web on the Internet provides easy-touse technology for information publishing and dissemination
Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Electronic commerce is doing commerce with the use of computers, networks and commerce-enabled software (more than just online shopping)
What is E-Business?
E-Commerce electronic transactions conducted by business partners (narrow definition) E-Business: buying and selling, servicing customers, collaborating with business partners, and conducting electronic transactions within an organisations
What is E-Business? 2
E-Commerce as digitally enabled commercial transactions between and amongst organisations and individuals
E-Business refers primarily to the digital enablement of transactions and processes within a firm, involving only the information systems under the control of the firm
What is E-Business 3
For this module, a broad definition of EBusiness is adopted It encompasses all internal and external electronically based activities and processes. E-commerce is part of E-Business, which focuses on the electronic commercial transactions between and amongst organisations and individuals
ADVANTAGES OF E-COMMERECE
LOWER COST ECONOMY HIGHER MARGIN BETTER CUSTOMER SERVICE QUICK COMPARISION SHOPPING PRODUCTIVE GAINS MARKET KNOWLEDGE TEAM WORK INFORMATION SHARING CONVINIENCE
Loss of ability to inspect products from remote locations Rapid developing pace of underlying technologies Difficult to calculate return on investment Cultural and legal impediments
Internet offered the general public the opportunity to conduct businesses online
Other categories:
Business to government (B2G) Mobile Commerce
B2C applications
Offer directly to the customer an interface of activity
Typical examples:
Online book store (e.g. amazon.com) Online Apple, Hp, Dell, Sony Booking and purchase of airline tickets (e.g. makemetrip.com)
Correspond to retail sale Growth of B2C applications thanks to Internet A new kind of B2C applications are the Cybermalls
Disadvantages:
Low order conversion rates High risk (see Cyberphobia)
B2B applications
Realize transactions needed to perform financial or commercial activities by companies over the Internet Some typical applications:
E-procurement E-Marketplace
The turnover is much greater than that dealed with B2C applications
C2C applications
Concern the consumers who run negotations with other consumers sometimes utilizing as intermediary a company
Examples:
Ebay Autotrader.com
Disadvantages
Little earning capacity
B2G applications
Correspond to all kind of transactions between company and public administrator Utilized mostly in the USA An example of a business to government company is a firm that offers IT consulting services to a government agency. The government uses the B2G arrangement in order to keep its technology up to date and in working condition,
The development of such applications faces some of the greatest challenges in the security area to secure the trust of consumers
are common to many applications, but they are all critical in the case of e-commerce because of its nature
Security Issues
Security is a crucial feature
Most transactions take place in a fully automated way Restricted data are transmitted through a public network
Users must be sure that their money will not be lost or stolen
Flexibility Issues
E-commerce systems are subject to frequent structural changes because of mutations of:
Products and services provided by the firm Commercial partnerships
Scalability
Capability to support a certain number of users (thousands, even millions) without compromising performances It is important because a slow application often means to lose customers (especially in B2C) since they have very small patience
Fault tolerance
A less fault-tolerant application will be less available to the user Every minute that a site is not available costs 1400$ to the company (survey on 400 major companies by Oracle) It is easy to loose customers forever It is necessary to redirect the users without they perceive it
Integration
Always needed since no application offering every commercial functionality can be realized Critical because the commercial funcionalities are often realized by many different legacy and third-party applications
Examples:
ERP systems Legacy systems
User Interfaces
Must be intuitive,easily comprehensible and of simple utilization In the case of B2C must support profiling in order to anticipate the customer requests They also need to be customizable
Time-to-market
Has greater importance than elsewhere Emphasis on reuse
Client
Web Server
Application Server
Database Server
Legacy systems
Transactions
Security
Session
Horizontal Services
Database
Application Server
Client tier Server tier Data tier
Domain Model
References (1/4)
Introduction to e-commerce and the development of e-commerce applications:
Professional Java E-Commerce, M.Kerzner et al., Wrox Press, 2001
References (2/4)
Electronic Data Interchange:
Intodruction to EDI, vv.aa. ,DevEdge online
Application Servers:
Introduction to iPlanet Application Server Architecture, Robert Schulteis, Sun Microsystems, 2002 http://www.sun.com/developers/evangcentral
In a standard format (ANSI X12,EDIFACT) Established between 1968 and 1975 in the transportation industries (U.S.) Application-to-application communication without human intervention
in automated way
E-procurement applications(3/3)
3. Order approvation compliant to company standards and procedures 2. Purchase request is performed by employees via a Web interface 4. Purchase order is electronically placed
7. Product receipt
E-marketplace
An environment that brings buyers and sellers together in a virtual space for ecommerce, enabling them to reach new customers and reduce transaction costs E-marketplaces are becoming more fashionable
Cybermalls
Include more virtual shops Appear as web portals with links to single e-shops grouped by different product categories (e.g. music or books) Advantages for smaller businesses:
Reduced initial investment Easily traceability through the malls brand
Presentation Layer
Its purpose is to provide a user interface to the end user of the application Controls the look-and-feel of the application and responds to user events Serves actually as the front-end of the application
Horizontal services
Services provided by the application server by means of an underlying technology (CORBA, EJB, COM,etc.) Typical services:
Transactions Security Session Management Resource pooling Load balancing and fail over
Session Management
Mantains the correlation among requests generated by the same user
Resource Pooling
Caching the instances of used resources (e.g. database connections) improves performances
2000 Jan-Apr 6
2001 220
2002 66
Source:Webmergers.com