ELEC3609: Week 5 lecture: Electronic Commerce: Design and Technologies

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ELEC3609 Week 5 lecture Electronic Commerce
Design and Technologies
Electronic commerce (e-commerce) is defined as
the sharing of business information, maintaining
business relationships, and conducting business
transactions through the use of
telecommunications networks.
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Stages of Using the Internet for Business

• Phase 1 When a company decides to use e-mail
  as a communication tool.
• Phase 2 When a company decides to create a
  public Web site.
• Phase 3 When a company decides to develop a
  private intranet.
• Phase 4 When a company learns to use the
  Internet to actually conduct business
  transactions with its customers, suppliers, and
  other organizations.

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EDI (Electronic Data Interchange)

• EDI refers to the exchange of electronic business
  documents (no human intervention)
• Electronic Data Interchange, the transfer of data
  between different companies using networks, such
  as VANs or the Internet. As more and more
  companies get connected to the Internet, EDI is
  becoming increasingly important as an easy
  mechanism for companies to buy, sell, and trade
  information. ANSI has approved a set of EDI
  standards known as the X12 standards.
• EDI standards - There are four major sets of EDI
  standards
• The UN-recommended UN/EDIFACT is the only
  international standard and is predominant outside
  of North America.
• The US standard ANSI ASC X12 (X12) is predominant
  in North America.
• The TRADACOMS standard developed by the ANA
  (Article Numbering Association) is predominant in
  the UK retail industry.
• The ODETTE standard used within the European
  automotive industry
• http//www.itl.nist.gov/fipspubs/fip161-2.htmFIPS
  _TOP
• The EDI standard says which pieces of information
  are mandatory for a particular document, which
  pieces are optional and give the rules for the
  structure of the document. The standards are like
  building codes. Two EDI documents can follow the
  same standard and contain different sets of
  information. For example a food company may
  indicate a product's expiration date while a
  clothing manufacturer would choose to send color
  and size information

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EDI

• Electronic Data Interchange (EDI) may be most
  easily understood as the replacement of
  paper-based purchase orders with electronic
  equivalents.
• It is actually much broader in its application
  than the procurement process, and its impacts are
  far greater than mere automation.
• EDI offers the prospect of easy and cheap
  communication of structured information
  throughout the corporate community, and is
  capable of facilitating much closer integration
  among remote organisations.
• A more careful definition of EDI is 'the exchange
  of documents in standardised electronic form,
  between organisations, in an automated manner,
  directly from a computer application in one
  organisation to an application in another'.
• EDI's saves unneccessary re-capture of data. This
  leads to faster transfer of data, far fewer
  errors, less time wasted on exception-handling,
  and hence a more stream-lined business process.
  Benefits can be achieved in such areas as
  inventory management, transport and distribution,
  administration and cash management. EDI offers
  the prospect of easy and cheap communication of
  structured information throughout the government
  community, and between government agencies and
  their suppliers and clients.

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EDI

• EDI supports structured business messages (those
  which are expressed in hard-copy, pre-printed
  forms or business documents), and transmits them
  electronically between computer applications,
  rather than between people.
• The essential elements of EDI are
• the use of an electronic transmission medium
  (originally a value-added network, but
  increasingly the open, public Internet)
• the use of structured, formatted messages based
  on agreed standards (such that messages can be
  translated, interpreted and checked for
  compliance with an explicit set of rules)
• relatively fast delivery of electronic documents
  from sender to receiver (generally implying
  receipt within hours, or even minutes) and
• direct communication between applications (rather
  than merely between computers).
• EDI depends on an information technology
  infrastructure. This must include data
  processing, data management and networking
  capabilities, to enable the efficient capture of
  data into electronic form, the processing and
  retention of data, controlled access to it, and
  efficient and reliable data transmission between
  remote sites.
• A common connection point is needed for all
  participants, together with a set of electronic
  mailboxes (so that the organisations' computers
  are not interrupted by one another), and security
  and communications management features. It is
  entirely feasible for organisations to implement
  EDI directly with one another, but it generally
  proves advantageous to use a third-party network
  services provider.

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EDI

• EDI can be formally defined as 'The transfer of
  structured data, by agreed message standards,
  from one computer system to another without human
  intervention'. Most other definitions used are
  variations on this theme. Despite being
  relatively unheralded, in this era of
  technologies such as XML web services, the
  Internet and the World Wide Web, EDI is still the
  data format used by the vast majority of
  electronic commerce transactions in the world.
• The EDI standards were designed to be independent
  of communication and software technologies. EDI
  can be transmitted using any methodology agreed
  to by the sender and recipient. This includes a
  variety of technologies, including modem
  (asynchronous, and bisynchronous), FTP, Email,
  HTTP, AS1, AS2, etc. It is important to
  differentiate between the EDI documents and the
  methods for transmitting them.

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EDI translation software

• EDI translation software provides the interface
  between internal systems and the EDI format
  sent/received. For an "inbound" document the EDI
  solution will receive the file (either via a
  Value Added Network or directly using protocols
  such as FTP or AS2), take the received EDI file
  (commonly referred to as a "mailbag"), validate
  that the trading partner who is sending the file
  is a valid trading partner, that the structure of
  the file meets the EDI standards and that the
  individual fields of information conforms to the
  agreed upon standards.
• Typically the translator will either create a
  file of either fixed length, variable length or
  XML tagged format or "print" the received EDI
  document (for non-integrated EDI environments).
  The next step is to convert/transform the file
  that the translator creates into a format that
  can be imported into a company's back-end
  business systems or ERP.
• This can be accomplished by using a custom
  program, an integrated proprietary "mapper" or to
  use an integrated standards based graphical
  "mapper" using a standard data transformation
  language such as XSLT. The final step is to
  import the transformed file (or database) into
  the company's back-end enterprise resource
  planning (ERP).

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Value Added Networks

• In the most basic form, a VAN (Valued Added
  Network) acts as a regional post office. They
  receive transactions, examine the 'From' and the
  'To' information, and route the transaction to
  the final recipient. VANs provide a number of
  additional services, e.g. retransmitting
  documents, providing third party audit
  information, acting as a gateway for different
  transmission methods, and handling
  telecommunications support. Because of these and
  other services VANs provide, businesses
  frequently use a VAN even when both trading
  partners are using Internet-based protocols.
• Healthcare clearinghouses perform many of the
  same functions as a VAN, but have additional
  legal restrictions that govern protected
  healthcare information.
• VANs also provide an advantage with certificate
  replacement in AS2 transmissions. Because each
  node in a traditionally business-related AS2
  transmission usually involves a security
  certificate, routing a large number of partners
  through a VAN can make certificate replacement
  much easier.

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Web Based Retailing

• Is it working?
• Whilst internet users are very comfortable
  researching product or service information on the
  internet, many are uncomfortable with ordering
  and paying for goods services online. The
  primary reasons for this reluctance are
• lack of confidence that the product or service
  will be delivered as and when promised
• security concerns regarding credit card details
• concerns regarding product or service quality and
  associated concerns regarding returns and
  refunds.

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e-commerce site attributes

• The surveys generally show that the following
  e-commerce site attributes significantly enhance
  buyer confidence and encourage purchasing
  activity
• a high degree of organisation when the site is
  easy to use and particular products are easy to
  find and order users confidence is boosted
• clear instructions and information about the
  purchasing and delivery process when users are
  clearly informed about what will happen and when
  confidence is enhanced
• utilisation of secure servers and particularly
  bank operated real-time payment gateways wherein
  purchasers credit card details are not stored
  once the transaction is complete and clear
  description of such
• strong refund / return policies
• a physical presence (address etc) the knowledge
  of a bricks mortar presence provides
  significant comfort, particularly regarding
  concerns about product quality

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Easy to create web sites

• http//www.homestead.com/?s_cidGC31139

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• Choose from 2,000 detailed website templates.
• Browse their library of more than 2,000 website
  templates created for 100 business categories.
  You can easily combine elements from several
  templates for a completely unique look.
• Start with a complete, functional site, including
  images and text.
• Change anything and everything.
• Customize and update your site.
• Get your own personalized "domain name and get
  email addresses personalized with your company's
  domain name.
• Track and collect visitor information
• Get help / support every step of the way
• Accept payments 24 hours a day through PayPal

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Advertising, Marketing

• The 4 Ps of Internet marketing
• Product
• Physical product(requiring distribution, after
  sales service)
• Virtual productCampbells soups use Internet to
  give information about products
• Price
• New phenomenon free product(product is used to
  sell advertising space GeoCities)
• On-line auctions
• Traditional pricing strategies
• Place (Distribution) streamline supply chain
• Promotion
• Web site information
• E-mail
• Internet banners

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Intranets to Support Internal Business Processes
An intranet is an internal information
systembased on Internet client/server
activitiesbetween individuals and departments
within an organization.
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How Real-World Companies Use Intranets

• Provide access to important information
• Facilitate teamwork and collaboration
• Conduct internal business transactions

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Extranets to Connect Business Alliances
An extranet, or extended intranet, is aprivate
interoganizational information system connecting
the intranets of twoor more companies in a
business alliance.
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Characteristics of an Extranet
Three Types ofExtranets

• Secure Private Network
• Public Network
• Virtual Private Network

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Virtual Public Network
Company B Intranet
Company A Intranet
Internet
ISP
ISP
Encrypted Tunnel
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How Real-World Companies Use Extranets

• Increasing the speed of business-to-business
  transactions
• Reducing errors on intercompany transactions
• Reducing costs of telecommunications
• Increasing the volume of business and partners
• Exchanging business-to-business documents
• Checking on inventory and order status from
  suppliers
• Collaborating with business partners on joint
  projects

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Connecting with Customers on the Internet
Characteristics of Effective Business-Customer
Internet Sites

• Speed of transactions
• Large, up-to-date product selection
• Ease of use
• Secure transactions
• After-sale features
• Connecting to the Internet
• Designing the Web site

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Technical Requirements of E-Commerce
Web Server Requirements
A company that engages in e-commercemust
maintain a stable, secure,environmentally sound
computerroom for its Web site servers andother
equipment.
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Technical Requirements of E-Commerce
Software Requirements

• Catalog displayfor finding and delivering
  business information
• On-demand customer servicefor shopping cart
  capability that keeps track of the items a
  customer has selected to purchase.
• Transaction processingto do typical calculations
  for atransaction, including computing taxes and
  shipping costs. To collect payments from
  customers accurately and securely.

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Ethical Issues of E-Commerce
Electronic commerce policies may include

• A clear, explicit statement of the organizations
  privacy policy
• A policy statement addressing situations in which
  a persons permission must be secured before
  his/her ID, photo, ideas, or communications are
  used or transmitted
• A clear policy stating how the company will
  inform customers of the intended uses of personal
  information gathered during an online transaction
  and how to secure permission from customers for
  those used
• A statement that addresses issues of ownership
  with respect to network postings and
  communications
• A policy of how the company monitors, or tracks,
  user behaviors on the Web site.

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Security Issues

• 1.       Confidentiality
• Privacy of message (encryption)
• 2.     Integrity
• Detecting message tampering(Hashing)
• 3.     Non-repudiation
• Provision of irrefutable evidence of origin,
  receipt and contents (Digital signatures etc)
• 4.     Authentication
• Is the sender who he/she claims to be? (Digital
  signature, password etc)
• 5.     Authorisation
• Access control (limiting entry to authorised
  users) (Firewalls, passwords etc)