Electronic Commerce

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Electronic Commerce COMP3210

• Dr. Paul Walcott
• 01/11/04

The Department of Computer Science Mathematics
and Physics, University of the West Indies, Cave
Hill Campus, Barbados
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Contents

• Electronic Commerce Software
• Finding and Evaluating Web Hosts
• Electronic commerce software
• Basic functions
• Advanced functions

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Finding and Evaluating Web Hosts

• When a company takes on the responsibility of
  hosting their own Web site this is called
  self-hosting
• Small and mid-size businesses tend to outsource
  to a third party, i.e. use a Web hosting service
  provider
• These third parties are called Internet Server
  Providers (ISPs), Commerce Service Providers
  (CSPs), Managed Service Providers (MSPs) or
  Application Service Providers (ASPs)

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Finding and Evaluating Web Hosts (I)

• To find a host a company must determine what type
  of service they require, for example
• A shared hosting service where the Clients Web
  site is on a server which hosts other Web sites
• A dedicated hosting service where only the Client
  is hosted on the Server
• Or, a co-location service where the Client
  installs his own hardware and software, and rents
  a physical space, a reliable power supplier and
  an Internet connection

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Finding and Evaluating Web Hosts (I)

• Lists of Internet service providers can be found
  on
• http//thelist.internet.com
• http//www.hostindex.com
• http//www.tophosts.com
• http//www.hostSearch.com
• Exercise use the above sites to find ISPs in
  North America

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Electronic Commerce Software

• The software requirement for e-commerce site vary
  tremendously and are dependent on several factors
  including
• The size of the enterprise and its projected
  traffic
• The budget

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Electronic Commerce Software (I)

• All e-commerce solutions must provide at least
  the following
• A catalog display
• Shopping cart capabilities
• Transaction processing

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Electronic Commerce Software (II)

• Larger e-commerce site require additional
  functionality, such as
• Middleware that links the companys existing
  system (inventory control, order processing and
  accounting) to the e-commerce system
• Databases and Applications
• Supply chain management software
• Customer relationship management software
• Content management software
• Knowledge management software

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Catalog Display

• This is used to organise the goods being sold
• Static catalog
• This is a simple list written in HTML that
  appears on one or more Web pages
• To add or delete items from the catalog it is
  require to edit the HTML pages
• Dynamic catalog
• Information is stored in a database
• May feature photographs of items, detailed
  descriptions and search facilities

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Catalog Display (I)

• Smaller Web stores selling fewer than 40 items
  only need a list of products or product
  categories
• Images of all the products might be able to fit
  on the same page
• Larger stores require
• More sophisticated navigation, and product
  organisation tools
• Also they must often alternative ways of finding
  products, e.g. product categories as well as a
  free-text search capabilities, e.g. stereos

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Shopping Carts

• In the earlier years of e-commerce text forms
  were used to enter orders. These forms were error
  prone because customers had to
• Write down product codes, unit prices and other
  information about the products before going to
  the order form
• Customers also had to write down the price of the
  item which was often on another page

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Shopping Carts (I)

• Modern shopping carts keep track of the items a
  customer selects, allowing them to add or remove
  items, or simply to view the cart
• All information about the item, including its
  price and product code are stored in the shopping
  cart automatically
• The clicking of a button (e.g. the checkout
  button) executes the purchase transaction

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Shopping Carts (II)

• Some Web commerce sites allow the storage of
  items in a shopping cart over a period of days,
  allowing the user to come back and pay for the
  items at that time

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Shopping Carts (III)

• Companies that sell shopping cart software
  include
• http//www.salescart.com/
• A one off cost of 250-400
• ASP, ASP.Net PHP
• http//www.webgenie.com/
• Single User license 495
• Perl/CGI

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Transaction Processing

• Transaction processing occurs when the Shopper
  proceeds to the virtual checkout
• At this point volume discounts, sales tax and
  shipping costs are calculated (sales tax and
  shipping charges must be kept current)
• These calculations must also include any coupons,
  special promotions or time sensitive offers (e.g.
  make a purchase by a given date and get a
  discount)
• A secure communication link is subsequently
  established to transmit payment information

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Middleware

• Links the e-commerce software to existing system
• Middleware may be written in-house or bought from
  middleware vendors or consulting firms
• The total cost of a middleware implementation can
  range from 50,000 to millions
• E.g. of middleware vendors are www.beasys.com and
  www.broadvision.com

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Databases

• A database manager stores software in a highly
  structured way
• The database structure determine how easy the
  database manager can retrieve the information
  stored in the database
• Smaller e-commerce sites can use low cost
  databases such as Microsoft Access

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Databases (I)

• Larger e-commerce sites require more expensive
  data management software such as
• IBM DB2
• Microsoft SQL Server
• Oracle
• These packages cost between US5,000 and
  US200,000

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Databases (II)

• An increasing number of companies and
  organisations are beginning to use MySQL which is
  open source software
• Customers pay for service support if required

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Application Integration

• Application programs perform specific functions,
  e.g. creates invoices
• An application server receives its input from Web
  servers which in turn is supplied by the user
• The function of the application software is
  dictated by the rules of the business this is
  called business logic

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Application Servers

• Application servers are divided into two groups
• Page-based application systems which return pages
  generated by scripts containing rules for
  presenting the data
• Examples include Macromedia ColdFusion, Java
  Server Pages (JSP), Active Serer pages (ASP) and
  PHP Hypertext Preprocessor (PHP)
• This technology works well for small to mid size
  sites

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Application Servers (I)

• Component-based application systems separate the
  presentation logic from the business logic. Each
  logical component is created in a separate module
• E.g. Enterprise JavaBeans (EJBs), Microsoft
  Component Object Model (COM) and Object
  Management Group Common Object Request Broker
  Architecture (COBRA)

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Web Services

• An accepted definition. is not yet available
• However it is a combination of software tools
  that allow application software in one
  organisation to speak to application software in
  another organisation over a network

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Web Services (I)

• E.g. a mortgage application service company
  obtaining information from consumers
• forwarding the information to a Building Society
  for a mortgage decision
• decision is relayed back to the service company
• These services use XML

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E-Commerce Software for Small to Mid-Size
E-Businesses

• E-commerce software for small to mid-size
  business is typically provided by commerce
  service providers (CSP)
• CSP have the advantage of
• Offering free or low-cost e-commerce site
  building software
• Cost typically less than US20 month
• Service appropriate for small businesses selling
  no more than 50 items
• Transaction volumes of fewer than 20 a day

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E-Commerce Software for Small to Mid-Size
E-Businesses (I)

• E.g. ValueWeb hosts over 180,00 Web site for over
  130 countries

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Mall-style CSP

• Provide small businesses with
• An Internet connection
• Web site creation tools
• Little or no banner advertising clutter
• Shopping cart software, and payment processing
• The monthly fee is higher than lower-end
  providers (therefore less ads)
• May charge a one-time setup fee
• Percentage or fixed charge for every transaction

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Mall-style CSP (I)

• Examples include eBay Stores and Yahoo! Stores

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Estimating Operating Costs For Small Web Business
Using ISP

• The first year cost (in US dollars) for Web
  businesses that sell less than 50 different items
• Initial site setup fee 200
• Annual maintenance 1200
• Domain name registration 70
• Scanner or digital camera 500
• Photo editing software 100
• Occasional HTML design help 400
• Merchant credit card setup 200
• Total first year cost 2670

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Cost of Self Hosting a Site for a Small Business

• Setup and Web site maintenance includes
• Equipment (server and network gear) one time
  cost of US3000 - 20000
• Communication T1 or fractional T1 cost US1200 -
  US12,000 per year
• Physical location including room security, air
  conditioning and communication access cost 5,000
  a year
• Staff minimum cost US50,000 - US100,000
  annually
• Total cost US60,000 - US100,000 or more for the
  first year, and about the same in subsequent years

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Cost of Self Hosting a Site for a Medium-Size and
Large Business

• The startup cost is US100,000 - US500,000
• Recurring annual cost of 50 this amount
• Large businesses spend US1 million - US50
  million to launch, with 50 recurring annual cost

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Software Tools For Medium-Size to Large
E-Businesses

• The software tools for midsize to large
  businesses include
• Macromedia Dreamweaver
• Microsoft FrontPage
• Visual Studio .Net for dynamic pages
• Shopping carts, content management software
• Middleware

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Software Tools For Medium-Size to Large
E-Businesses (I)

• Buying an using mid-range e-commerce software has
  an annual cost of US2,000 - US50,000
• Offers connectivity to database systems
• Provides connections to existing inventory
  control software
• E,g, IBM Websphere Commerce Professional Edition
  (cost US80,000 per processor)

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E-Commerce Software for Large Businesses

• Higher transaction loads required
• Software cost much more
• Extensive support for B2B commerce
• Requires several dedicated computers, Web server
  systems and firewalls
• E.g. IBM WebSphere Commerce Business Edition

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Customer Relationship Management

• The goal is to understand the customers specific
  needs and customise the product to suit them
• A customer whose needs are being met exactly is
  willing to pay more for goods or services

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Customer Relationship Management (I)

• CRM software requires input from
• Sales automation
• Customer service centre operation
• Marketing campaigns
• Customer activity data from the Web site
• This helps managers to
• Gather business intelligence
• Plan marketing strategy
• Perform customer behaviour modelling
• Product and service customisation

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Customer Relationship Management (II)

• E.g. Siebel Systems price starts at around
  US200,000 an average of about US5,000 per user

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Supply Chain Management

• Helps to coordinate planning and operations with
  industry partners
• SCM software helps with
• Planning helps companies develop coordinated
  demand forecast using information from partners
• Execution helps with warehousing and
  transportation management
• E.g. i2 Technologies. A wholesaler with 3-4
  distribution Centres might have to pay US1
  million for the SCM software

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Content Management Software

• Used to update or maintain Web site content
• Allows control of large amount of text, graphics
  and media files
• E.g. Documentum which cost between US200,000 -
  500,000

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Knowledge Management Software

• Helps companies to
• Collect and organise information
• Share information among users
• Enhance the ability of users to collaborate
• Retain knowledge gained to be used by future
  users
• E.g. IBM Lotus Discovery Server
• KM software can cost between US50,000 to US1
  million or more

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References

• Sch2004 Schneider, Gary, P., Electronic
  Commerce The second wave, Thomson Course
  Technology, Fifth Annual Edition, 2004