E-commerce applications

1
E-commerce applications

• Luisa Calcagno
• Course of Software Engineering 2
• May 29th 2002

2
Plan of the talk

• Introduction to e-commerce and e-commerce
  applications
• Issues in developing e-commerce applications
• Architecture of e-commerce applications
• Bookstore example
• Perspectives for e-commerce
• References

3
A definition for e-commerce

• A universally accepted definition does not exist
• Anything that uses electronic technology in order
  to do business can be intended as e-business
• We can look at e-commerce as to a subset of
  e-business concerning commerce
• Commerce is intended as the activity of
  exchanging goods and services with some kind of
  payment

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The EU definition for e-commerce

• e-commerce is based on the electronic processing
  and transmission of data. It encompasses many
  diverse activities including electronic trading
  of goods and services, on-line delivery of
  digital content, electronic fund transfer,
  electronic share trading, public procurement.
  (EU(97)/157)

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Origins of e-commerce applications

• E-commerce applications existed long before
  Internet
• EDI (Electronic Data Interchange)
• EFT (Electronic Funds Transfer)
• Internet offered the general public the
  opportunity to conduct businesses online

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Taxonomy of e-commerce applications

• Three main categories
• Business to consumer (B2C)
• Business to business (B2B)
• Consumer to consumer (C2C)
• Other categories
• Business to government (B2G)
• Mobile Commerce

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B2C applications

• Offer directly to the customer an interface of
  activity
• Typical examples
• Online book store (e.g. amazon.com)
• Online car purchasing (e.g. automall.com)
• Booking and purchase of airline tickets (e.g.
  ryanair.com)
• Correspond to retail sale
• Growth of B2C applications thanks to Internet
• A new kind of B2C applications are the Cybermalls

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B2C applicationsadvantages and disadvantages

• Advantages
• Allow company to extend existing services to
  customers
• Allow company to increase its customers
• Offer a wider choice and allow cheaper prices
• May give to the company a worldwide visibility
• Online shops are accessible 24h a day
• Disadvantages
• Low order conversion rates
• High risk (see Cyberphobia)

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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

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B2B applicationsadvantages and disadvantages

• Advantages
• Help to automate communications between
  companies making them easier and quicker
• Allow to cut prices drastically
• Help in reducing mistakes
• Disadvantages
• Often need legacy integration

11
C2C applications

• Concern the consumers who run negotations with
  other consumers sometimes utilizing as
  intermediary a company
• Examples
• Ebay
• Autotrader.com

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C2C applicationsadvantages and disadvantages

• Advantages
• Allow consumers to interact directly among them
• Give to the consumers a new way of purchasing and
  selling services and goods
• Disadvantages
• Little earning capacity

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B2G applications

• Correspond to all kind of transactions between
  company and public administrator
• Utilized mostly in the USA

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Mobile commerce applications

• Concern doing businesses by means of mobile
  wireless devices
• Can be both B2B and B2C
• Have a growing importance in the future of
  e-commerce applications
• Will introduce completely new forms of electronic
  commerce
• E.g. E-tickets
• The development of such applications faces some
  of the greatest challenges in the security area
  to secure the trust of consumers

15
Plan of the talk

• Introduction to e-commerce and e-commerce
  applications
• Issues in developing e-commerce applications
• Architecture of e-commerce applications
• Bookstore example
• Perspectives for e-commerce
• References

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Issues in developing e-commerce applications (1/2)

• Many of the following issues
• Security
• Flexibility
• Scalability
• Fault tolerance
• Integration
• Interfaces (graphical and not)
• Time-to-market
• are common to many applications, but they are
  all critical in the case of e-commerce because of
  its nature

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Issues in developing e-commerce applications (2/2)

• A state-of-the-art application always fail if
  people do not utilize it
• A constant attention must be payed to the users
  over the whole development process
• A close integration with every business aspect is
  needed
• For an online buyer security and easy access to
  the informations are the primal needs
• A manager will need a flexible application to
  adapt the business to the new trends in a faster
  way

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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

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Flexibility Issues

• E-commerce systems are subject to frequent
  structural changes because of mutations of
• Products and services provided by the firm
• Commercial partnerships

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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

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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 lose customers forever
• It is necessary to redirect the users without
  they perceive it

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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

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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

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Multi-channel interfaces

• Application interfaces must support several kinds
  of connections
• Web browsers
• Web TV
• Cellular phones (via WAP)
• PDA

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Time-to-market

• Has greater importance than elsewhere
• Emphasis on COTS and reuse

26
Plan of the talk

• Introduction to e-commerce and e-commerce
  applications
• Issues in developing e-commerce applications
• Architecture of e-commerce applications
• Bookstore example
• Perspectives for e-commerce
• References

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Two-tier Architecture (client server)

• Data reside on a server
• Business logic and user interfaces reside on
  clients
• Drawbacks
• Clients sustain the main load and consequently
  result to be monolithic and heavyweight
• Excessive overhead
• Simple but unsuitable for e-commerce applications

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Three-tier architecture

• Separates the business logic of the application
  from user interfaces and from data access
• Middle tier can be furtherly divided
• In this case we call it multi-tier architecture
• Easier to modify one component
• Lower cost to deploy and maintain

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Three-tier architecture
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Application server

• Software that runs on the middle tier of a
  three-tier environment
• In multi-tier environments it is often a
  distributed and complex software
• Commercial implementations exist
• Microsoft Commerce Server 2000
• Sun iPlanet
• IBM WebSphere Application Server

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Application Server-basede-commerce platform
architecture
ERP
E-commerce platform
Presentation Layer
Business Logic Layer
Data Legacy Access Layer
Legacy systems
Transactions
Security
Session
Resource Pooling
Load balancing
Database
Horizontal Services
Application Server
Client tier
Server tier
Data tier
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Example iPlanet architecture
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Plan of the talk

• Introduction to e-commerce and e-commerce
  applications
• Issues in developing e-commerce applications
• Architecture of e-commerce applications
• Bookstore example
• Perspectives for e-commerce
• References

34
Domain Model
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Use Case Model
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Plan of the talk

• Introduction to e-commerce and e-commerce
  applications
• Issues in developing e-commerce applications
• Architecture of e-commerce applications
• Bookstore example
• Perspectives for e-commerce
• References

37
Future Perspectives (1/2)

• Electronic commerce is going to reduce a lot of
  overhead in the economy
• It will allow a purchase order to go from being
  about a 75 cost to about 10
• if you had to pick who's the big winner in all
  of this, you'd definitely have to pick consumers
• It lets you go out to the Internet and look at
  products and services of every kind, that never
  would have been available through traditional
  distribution channels
• (Bill Gates at the White House Conference on the
  New Economy, April 2000)

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Future Perspectives (2/2)

• In spite of Bills words, people still lack trust
  in e-commerce
• However, in Europe there is a strong tendency
  towards the acceptance of Mobile Commerce
• EITO (European Information Technology
  Observatory) 2002 highlights the growing
  importance of Mobile Commerce (see next page)

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Trends in Mobile Commerce for the EU Markets
entertainment
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Trends in Mobile Commerce for the EU Markets
banking and finance
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Worldwide TLC markets by region
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Plan of the talk

• Introduction to e-commerce and e-commerce
  applications
• Issues in developing e-commerce applications
• Architecture of e-commerce applications
• Bookstore example
• References

43
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
• EU definition for e-commerce
• A European Initiative in Electronic Commerce
  Communication to the European Parliament, the
  Council, the Economic and Social Committee and
  the Committee of the Regions (COM(97)/157)

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References (2/4)

• Electronic Data Interchange
• Intodruction to EDI, vv.aa. ,DevEdge online
• Cyberphobia and trends in e-commerce
• http//www.webmergers.com
• Application Servers
• Introduction to iPlanet Application Server
  Architecture, Robert Schulteis, Sun Microsystems,
  2002
• http//www.sun.com/developers/evangcentral

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References (3/4)

• Platforms for e-commerce
• Building Applications in the Net Economy,
  Netscape Communications Corporation White paper,
  1997
• Architectures for e-commerce
• Architetture, tecnologie e modelli funzionali
  nelle-commerce, Castrogiovanni, Magliano,
  Sciarappa, Notiziario tecnico Telecom Italia,
  December 2001
• Statement of Bill Gates
• The White House Conference on the New Economy
  April 5, 2000

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References (4/4)

• E-procurement and e-marketplaces
• E-procurement white paper, Digital Union 2001
  (http//www.digitalunion.com)
• European Information Technology Observatory
  (EITO)
• http//www.eito.com
• The Bookstore example
• UML for E-Commerce, Doug Rosenberg
• http//www.iconixsw.com

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The End
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Electronic Data Interchange (EDI)

• Electronic exchange of
• Business documents
• Business data
• 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

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Electronic Funds Transfer (EFT)

• The banking equivalent of EDI
• Denotes the transfer of
• Electronic checks
• Customer accounts
• Payment informations
• in automated way

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Order conversion rates

• Defined as
• of orders / of contacts
• By month or year, four-month periods, etc.
• Measure the capability of a certain B2C
  application to convert an user into a buyer
• A survey carried out in August 2000 showed that
  order conversion rates in USA were of 1.9
  (Boston Consulting Group and Shop.org)

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E-procurement applications (1/3)

• Automate enterprise purchasing processes, i.e.
  perform all of the activities related to
  generating an order on the buyers side
• Purchased goods can be
• Direct goods (critical items in the supply chain)
• Indirect goods (MRO Maintenance Repair and
  Operations - such as office items)

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E-procurement applications (2/3)

• Automating procurement of indirect goods can
  dramatically reduce costs since
• Lessens maverick buying
• Reduces supplier response time

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E-procurement applications(3/3)
4. Purchase order is electronically placed
3. Order approvation compliant to company
standards and procedures
2. Purchase request is performed by employees via
a Web interface
5. Order is fulfilled by the supplier
Indirect goods e-procurement
1. Product selection from available catalogues
6. Product delivery
8. Payment request electronically forwarded
7. Product receipt
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E-marketplace

• An environment that brings buyers and sellers
  together in a virtual space for e-commerce,
  enabling them to reach new customers and reduce
  transaction costs
• E-marketplaces are becoming more fashionable

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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

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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

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Business Logic Layer

• The heart of the application itself
• Contains the business rules and /or processes
• Its components link between presentation and
  data/legacy layers

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Data Legacy access Layer

• Its purpose is to give to the business logic
  components access to backend data sources such
  as
• Databases
• ERP systems
• Other custom systems

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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

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Session Management

• Mantains the correlation among requests generated
  by the same user

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Resource Pooling

• Caching the instances of used resources (e.g.
  database connections) improves performances

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Load Balancing andFail Over

• Make possible to distribute incoming requests
• Handle clients reconnection in the case of system
  crash

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Cyberphobia and the .com crash

• Cyberphobia is the markets irrational fear of
  the Internet due to the several bankruptcies
  occured in the past years
• B2C represent 75 of bankruptcies

Internet shutdowns
2000 2001 2002
Jan-Apr 6 220 66

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