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Electronic Business


OMT II Mam Saima Gul Overview/Introduction to E-Business/ E-Commerce * E-Commerce has different definitions: The use of electronic transmission mediums ... – PowerPoint PPT presentation

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Title: Electronic Business

Electronic Business
OMT II Mam Saima Gul
  • Overview/Introduction to E-Business/

Introduction to Ecommerce
  • E-Commerce has different definitions
  • The use of electronic transmission
    mediums(telecommunications) to engage in the
    exchange, including buying and selling, of
    products and services requiring transportation,
    either physically or digitally, from location to
  • From a business process perspective, ecommerce is
    the application of technology toward the
    automation of business transactions and
  • From an online perspective, ecommerce provides
    the capability of buying and selling products and
    information on the internet and other online
  • From a service perspective, ecommerce is a tool
    that addresses the desire of firms, consumers and
    management to cut service costs while improving
    the quality of goods and increasing the speed of
    service delivery.
  • All of the above definitions are valid.

Difference between E-Business and E-Commerce
  • All e-commerce is part of e-business. Not all
    e-business is e-commerce.
  • If there is a direct financial transaction
    involved with the electronic process using
    Internet technologies it is e-commerce. If there
    is a non-financial transaction with an electronic
    process using Internet technologies it is
    e-business. Any transaction with an electronic
    process using Internet technologies is
  • For example, ordering a book on Amazon.com is
    e-commerce and e-business. Creating a map with
    directions from your home to the post office on
    Google maps is e-business (no e-commerce

Potential Benefits of E-Commerce
  • Following are some of the benefits that
    businesses gain from engaging in e-commerce.
  • Internet and web based electronic commerce can
    reach a more geographically dispersed customer
  • Cost of purchases can be lowered.
  • Reduction in inventories.
  • Better customer service.
  • Lower sales and marketing costs.
  • Many More

Benefits to Customers
  • Consumers also gain benefits from Internet
    e-commerce. Some benefits that consumers may
    expect to receive are
  • Increased choice of vendors and products.
  • Convenience from shopping at home or office.
  • Greater amounts of information that can be
    accessed on demand.
  • More competitive prices and increased price
    comparison capabilities.
  • Greater customization in the delivery of
    services(e.g many online news services allow
    their customers to design the look of their
    daily newspaper).

Types of E-Ccommerce
  • Business
  • Business
  • Consumers

Business to Business(B2B)/ Inter-organizational
  • In this case both the buyers and sellers are
    business organizations. E.g. one company sells
    raw material and another manufacturing company
    buys raw material for manufacturing products etc.
  • From B2B perspective, E-commerce facilitates the
    following business applications
  • Supplier management Electronic applications
    facilitate business partnerships by reducing
    purchase order processing costs and cycle times
    and by increasing the no. of purchase orders
    processed with fewer people.

  • Inventory management Electronic applications
    shorten the order-ship-bill cycle. If the
    majority of a businesss partners are
    electronically linked, information once sent by
    fax or mail can now be instantly transmitted.
    Businesses can also track their documents to
    ensure that they were received, thereby improving
    auditing capabilities.
  • Payment management electronic applications link
    companies with suppliers and distributors so that
    payments can be sent and received electronically.
    Electronic payments reduces clerical error,
    increases the speed at which companies compute
    invoices and lower transaction fees and costs.

Business to Consumer(B2C)/Intra-organizational
  • It is called business to customer delivery. In
    this case the seller is a business organization
    whereas the buyer is a consumer. Typically
    electronic stores are setup on the internet to
    sell goods to the consumer. e.g. www.amazon.com
  • Intra-organizational e-commerce facilitates the
    following business applications
  • Workgroup communications These applications
    enable managers to communicate with employees
    using e-mail, videoconferencing and bulletin
    boards. The goal is to use technology to increase
    the dissemination of information, resulting in
    better informed employees.

  • Electronic publishing These applications enable
    companies to organize, publish and disseminate
    human resources manuals, product specifications
    and meeting minutes using tools such as the World
    Wide Web. Online publishing reduce costs for
    printing and distributing documentation, faster
    delivery f information and reduction of outdated

Consumer to Consumer(C2C)/ Intermediaries and
  • This refers to situation where both the sellers
    and buyers are consumers. An online auction sites
    provides an effective means for supporting C2C
    ecommerce. e.g. ebay.com, pakiauction.com
  • Intermediaries (or electronic brokers) are
    economic agents that stand between the parties of
    a contract (or transaction), namely buyers and
    sellers, and perform functions necessary to the
    fulfillment of a contract. Most firms in the
    financial service sector including banks,
    insurance companies, mutual funds and venture
    capital firms, are intermediaries.
  • E.g. a customer can order flowers through online
    intermediaries that divert the order to regular
    stores for delivery. The flowers are shipped
    directly to the buyers home.

  • In more complex cases, intermediaries create
    software that allows customers to view and choose
    cars(products) by computer, eliminating
    time-consuming trips to the car lot. These
    programs then provide valuable data to the car
    companies manufacturing and inventory systems
    that actually control the production and
    distribution of the car.
  • The result is more efficient production and
    distribution and lower prices.

Consumer to Business(C2B)
  • This is a new form of ecommerce in which a
    consumer specifies the requirements to business,
    which provides a product that meet that
    requirements. e.g. www.priceline.com
  • In C2B transactions, customers learn about
    products through electronic publishing, buy
    products with e-cash and other secure payment
    systems and even have information goods delivered
    over the network.

Component Based Development of E-Commerce
  • There are some basic components that all
    e-commerce sites include, such as product or
    service description pages, a shopping cart - so
    that buyers can select and keep items from your
    product list till they generate a purchase order
    or an invoice, a payment mechanism so that
    buyers can pay for your products online or
  • E-commerce is an online trading mechanism in
    which all the business activities are carried out
    exclusively on the internet through a secure and
    reliable web site. The ecommerce components are
    features that are very essential for the success
    of this mechanism of trade and business.
    E-commerce cannot survive and propagate without
    managing these critical components

1. Website
  • Your online connection to your prospects and
    customers. There are a number of places on the
    web to get "free" websites - although you may be
    required to display an advertisement. The design
    of your site is critical to the success of your
    business! If it does not look like a
    professional, legitimate business - NO ONE WILL
    ORDER ANYTHING - no matter how great the products
    you have. If you are serious about doing business
    on the web, either learn html, java, cgi, etc.,
    or hire a professional to design your site. 

1. Website (Contd.)
  • The website is the critical component through
    which the online client interacts with the
    ecommerce. If the web site is built
    professionally and have an authenticated look
    more people are attracted to the ecommerce
    mechanism. However if the website is poorly
    designed, it would repel the clients from the
    ecommerce mechanism no matter how strong it is.
    Therefore it is very necessary that the website
    is designed exclusively with utmost importance
    given to the design and pattern of the web site

2. Merchant Account
  • Getting a merchant account is also very necessary
    for ecommerce and consider as a critical
    components. A merchant account is the one through
    which all the cash transaction activities take
    place through ecommerce (which allows you to
    accept major credit cards, electronic checks,
    etc). It is therefore vital for ecommerce to get
    a merchant account before starting this
    mechanism. Failure to get a merchant account
    would result in failure to initiate an ecommerce
    business as the cash transaction process could
    not take place.
  • In order to process credit card orders and
    eChecks from Internet customers, you will need to
    select an affordable merchant account provider.
    You can obtain an Online Merchant Account either
    from your bank or from one of many merchant
    account services available on the Internet.

3. Payment Transaction Software
  • Software which actually processes customer order
    information, address, credit card number, etc.
    The data is sent to a credit card authorization
    network which verifies that the credit card is
    valid and verifies that the shipping address
    matches the billing address. A possible warning
    sign that the card has been stolen is that the
    billing and shipping addresses do not match. 

4. Different Ordering Methods
  • The ultimate goal of your e-commerce site is to
    make sales. Many people still dont feel
    comfortable to make payments through online
    transactions. You would be better off if you
    include ordering processes by fax, telephone and
    ordinary mail. In fact, to have a telephone
    number for customer support and order is a must
    for any e-commerce site as it gives buyers some
    extra feelings of security. That way they know
    that they can always talk to a live person if
    anything goes wrong.

5. Web Server/Secure Server Connection
  • The internet sever also plays a critical role for
    ecommerce. It is important that the ecommerce
    sites are affiliated with well known servers to
    ensure security. https// - Link to a special
    computer which encrypts confidential ordering
    data for customer protection. If your website
    collects sensitive information from your
    customers, you should use security systems like
    SSL (Secure Socket Layer). This guarantees that
    the data provided by your customer will not fall
    into the hand of a malicious hacker while
    transferring from his computer to the web server.
    This also will reassure your customers that you
    are truly concerned about the security of their
    personal and sensitive information
  • .

5. Web Server/Secure Server Connection (Contd.)
  • You know you are on a secure server when the URL
    in your browser says "https//". The "s" stands
    for "secure." If ordering information is not sent
    via a secure server it can be intercepted by
    computer hackers. 
  • Security protocols and digital signatures are
    also critical components for ecommerce. These are
    encryption techniques to secure the ecommerce
    websites from hackers and virus attacks. Security
    protocols should be developed using the latest
    programming techniques to ensure maximum

6. Hosting Account
  • You will need an account from a web hosting
    provider and you will need to register a domain
    name for your business (such as
    www.adamssite.com). To ensure security of online
    transactions, your E-Commerce Hosting account
    must have SSL capability -- which is provided by
    SSL Certificates.

7. Shopping Cart
  • Shopping carts is one of the major critical
    components for ecommerce mechanism. These are
    specially designed software that allow online
    viewers to buy and purchase products on a
    website. If this component is carefully designed,
    then it helps in to bring more business to the
    ecommerce business. The shopping carts provide a
    user friendly interface which enable online
    customers to buy products without much
  • As with your website's files, any shopping cart
    program you select will need to be uploaded to
    your hosting account and installed there. A good
    Shopping Cart Program will have its own online
    administrative webpage that allows you to easily
    add / remove product offerings and update
    information pricing on each product.

8. Product Information
  • Buyers take their decision whether to buy a
    product from your site or not depending on the
    information that you provide. Thats why the
    product should have a clear and high-quality
    picture, short and detailed specifications. If
    necessary add attachments of diagrams, sketches,
    video etc. along with the product specification.
    Write clearly and prominently all sales terms and
    after sales supports terms, etc.
  • If you have many products, it is better to use an
    industry standard classification system to
    categorize your products. The goal is to have all
    the information related to the product available
    on the website, so that the customer can take a
    positive buying decision instantly.

9. Guarantees
  • As money back guarantees are becoming
    increasingly common on online sales you should
    consider prominently posting your money back
    guarantee on your website. Be sure to make your
    money back guarantee generous! Customers are
    becoming pickier on this issue. For example, if
    you sell knowledge base products like e-books,
    reports etc. make your hundred percent guarantees
    at least of two months. For tangible products,
    after sales warrantees should be also
    considerably generous. Customers should feel
    completely secured to buy at your website.

10. Privacy Policy
  • Your website must have a privacy policy.
    Customers are very concerned about the
    information that they are relaying to you. You
    must clearly explain them what you plan to do
    with the various information that you collect
    from your customers.

  • The End
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