Electronic Commerce and E-Business

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Electronic Commerce in Perspective Electronic commerce (e-commerce): sharing business information, maintaining business relationships, and conducting business transactions through the use of telecommunications networks

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Electronic Commerce in Perspective

E-commerce currently accounts for about 5 percent of the total U.S. economy. Internet-related revenue growth is about 20 times the growth rate of the overall U.S economy. Compared with U.S. business overall, a company selling goods and services over the Internet is:

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Electronic Commerce in Perspective

A new aspect of e-commerce is mobile commerce (m-commerce).

Historical and projected commerce growth from 2000 to 2006

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Electronic Commerce in Perspective

E-Commerce Models
Business-to-business (B2B)
B2B is an interorganizational information system in which a company handles transactions within its own value chain or with other businesses and organizations. business-to-employee (B2E)

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Electronic Commerce in Perspective

Business-to-consumer (B2C)
Retailing transactions between a company and individual customers are B2C transactions.

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Electronic Commerce in Perspective Consumer-to-consumer (C2C)

Individuals selling and buying directly with each other via a Web site are using C2C.

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Intranets: E-Commerce to Support Internal Business Processes

Characteristics of a B2E Intranet
Intranet

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Intranets: E-Commerce to Support Internal Business Processes

The physical elements of an intranet are:
A network (can be a LAN or WAN ) At least one computer with server software installed (including TCP/IP) Additional computers with client software installed (including TCP/IP and Web browsers)

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Intranets: E-Commerce to Support Internal Business Processes

The communication software for an intranet includes middleware and TCP/IP.
Middleware TCP/IP

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Intranets: E-Commerce to Support Internal Business Processes

An intranet also includes firewall software for security. User identification and authentication software, data encryption software, and virus protection software

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Intranets: E-Commerce to Support Internal Business Processes

How Organizations Use B2E Intranets
Information access for employees Collaboration and teamwork in the United States Internal business transactions

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Extranets to Connect Business Alliances

Extranet: a private interorganizational information system Plays an important role in the global business strategy of many companies

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Extranets to Connect Business Alliances

Characteristics of a B2B Extranet
Organizations can set up an extranet in one of three ways:
Secure private network

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Extranets to Connect Business Alliances

Public network

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Extranets to Connect Business Alliances

Virtual private network (VPN)
Internet VPN

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Extranets to Connect Business Alliances

How Business Alliances Use B2B Extranets
Benefits of using an extranet
Increases the speed of business-to-business transactions Reduces errors in intercompany transactions Reduces costs of telecommunications Increases the volume of business with partners Allows exchange of business-to-business documents Streamlines checking on inventory and order status from suppliers Enables collaborating with business partners on joint projects

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B2C: The Customer Connection

Customer-Centered Web Design
Characteristics of effective B2C Internet sites:
Speed of transactions Large, up-to-date product selection Ease of use Secure transactions After-sale features

Three interactive features are often included on public Web sites: email, discussion groups, and chat rooms.

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B2C: The Customer Connection

Apples iTunes music store allows consumers to buy downloadable songs, which can be burned to CDs, played on a Mac or PC, and/or moved to an iPod portable music player.

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B2C: The Customer Connection Customer Relationship Management

Customer relationship management, or CRM, can be the difference between success and failure.

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Some Technical Requirements of E-Commerce

Web server requirements:

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Some Technical Requirements of E-Commerce

E-commerce software requirements:
Catalog display On-demand customer service Transaction processing

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Ethical Issues of E-Commerce

An organizations code of ethics should 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 the company will secure permission from customers for those uses A statement that addresses issues of ownership with respect to network postings and communications A policy of how the company monitors, or tracks, user behavior on Web sites

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Lesson Summary
E commerce is sharing business information, maintaining business relationships, and conducting business transactions through the use of telecommunications networks, especially the Internet. E-commerce is also about reorganizing internal business processes, fostering external business alliances, and creating new consumer-oriented products. There are three main e-commerce configurations using the Internet: intranets, extranets, and public Web sites.

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Lesson Summary (continued)

An intranet is an internal information system based on Internet technology, including TCP/IP protocols and Web tools, that supports value chain activities between individuals and departments within an organization. An intranet comprises physical technology and information content. An extranet is a private interorganizational information system connecting the intranets of two or more companies in a business alliance.

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Lesson Summary (continued)

An extranet extends the cross-functional activities between trusted business partners and facilitates their working relationships. E-commerce also means conducting business transactions with customers. Although e-commerce has many technical requirements, Web server and e-commerce software requirements are particularly important. A company conducting business on the Internet should develop an information code of ethics that ensures that users of the Web site will be aware of the companys e-commerce policies.

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