Electronic Commerce

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Electronic Commerce

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Title: 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
3
Contents
  • Electronic Commerce Software
  • Finding and Evaluating Web Hosts
  • Electronic commerce software
  • Basic functions
  • Advanced functions

4
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)

5
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

6
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

7
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

8
Electronic Commerce Software (I)
  • All e-commerce solutions must provide at least
    the following
  • A catalog display
  • Shopping cart capabilities
  • Transaction processing

9
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

10
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

11
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

12
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

13
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

14
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

15
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

16
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

17
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

18
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

19
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

20
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

21
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

22
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

23
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)

24
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

25
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

26
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

27
E-Commerce Software for Small to Mid-Size
E-Businesses (I)
  • E.g. ValueWeb hosts over 180,00 Web site for over
    130 countries

28
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

29
Mall-style CSP (I)
  • Examples include eBay Stores and Yahoo! Stores

30
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

31
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

32
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

33
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

34
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)

35
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

36
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

37
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

38
Customer Relationship Management (II)
  • E.g. Siebel Systems price starts at around
    US200,000 an average of about US5,000 per user

39
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

40
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

41
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

42
References
  • Sch2004 Schneider, Gary, P., Electronic
    Commerce The second wave, Thomson Course
    Technology, Fifth Annual Edition, 2004
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