UNIT - I

What Is Electronic Commerce

Electronic commerce is the process by which businesses and consumers buy and sell goods and services
through an electronic medium.
Electronic commerce emerged in the early 1990s, and its use has increased at a rapid rate. Today, the
majority of companies have an online presence. In fact, having the ability to conduct business through the
Internet has become a necessity. Everything from food and clothes to entertainment and furniture can be
purchased online.
OR
E-Commerce or Electronics Commerce is a methodology of modern business, which addresses the need of
business organizations, vendors and customers to reduce cost and improve the quality of goods and services
while increasing the speed of delivery. Ecommerce refers to the paperless exchange of business information
using the following ways –

 Electronic Data Exchange (EDI)

 Electronic Mail (e-mail)
 Electronic Bulletin Boards
 Electronic Fund Transfer (EFT)
 Other Network-based technologies

Features
E-Commerce provides the following features –

 Non-Cash Payment − E-Commerce enables the use of credit cards, debit cards, smart cards,
electronic fund transfer via bank's website, and other modes of electronics payment.

 24x7 Service availability − E-commerce automates the business of enterprises and the way they
provide services to their customers. It is available anytime, anywhere.

 Advertising / Marketing − E-commerce increases the reach of advertising of products and services
of businesses. It helps in better marketing management of products/services.

 Improved Sales − Using e-commerce, orders for the products can be generated anytime, anywhere
without any human intervention. It gives a big boost to existing sales volumes.
  Support − E-commerce provides various ways to provide pre-sales and post-sales assistance to
provide better services to customers.

 Inventory Management − E-commerce automates inventory management. Reports get generated

instantly when required. Product inventory management becomes very efficient and easy to maintain.

 Communication improvement − E-commerce provides ways for faster, efficient, reliable

communication with customers and partners.

Traditional Commerce v/s E-Commerce

Sr. No. Traditional Commerce E-Commerce

Information sharing is made easy via electronic

Heavy dependency on information
1 communication channels making little dependency
exchange from person to person.
on person to person information exchange.

Communication or transaction can be done in

Communication/ transaction are done in
asynchronous way. Electronics system automatically
synchronous way. Manual intervention is
2 handles when to pass communication to required
required for each communication or
person or do the transactions.
transaction.
A uniform strategy can be easily established and
It is difficult to establish and maintain
3 maintain in e-commerce.
standard practices in traditional commerce.
In e-Commerce or Electronic Market, there is no
Communications of business depends upon
4 human intervention.
individual skills.
E-Commerce website provides user a platform where
Unavailability of a uniform platform as
al l information is available at one place.
5 traditional commerce depends heavily on
personal communication.
No uniform platform for information E-Commerce provides a universal platform to
6 sharing as it depends heavily on personal support commercial / business activities across the
communication. globe.

E-Commerce – Advantages
E-Commerce advantages can be broadly classified in three major categories –

 Advantages to Organizations
 Advantages to Consumers
 Advantages to Society

Advantages to Organizations

 Using e-commerce, organizations can expand their market to national and international markets with
minimum capital investment. An organization can easily locate more customers, best suppliers, and
suitable business partners across the globe.

 E-commerce helps organizations to reduce the cost to create process, distribute, retrieve and manage
the paper based information by digitizing the information.

 E-commerce improves the brand image of the company.

  E-commerce helps organization to provide better customer services.
 E-commerce helps to simplify the business processes and makes them faster and efficient.
 E-commerce reduces the paper work.
 E-commerce increases the productivity of organizations. It supports "pull" type supply management.
In "pull" type supply management, a business process starts when a request comes from a customer
and it uses just-in-time manufacturing way.

Advantages to Customers

 It provides 24x7 supports. Customers can enquire about a product or service and place orders
anytime, anywhere from any location.
 E-commerce application provides users with more options and quicker delivery of products.
 E-commerce application provides users with more options to compare and select the cheaper and
better options.
 A customer can put review comments about a product and can see what others are buying, or see the
review comments of other customers before making a final purchase.
 E-commerce provides options of virtual auctions.
 It provides readily available information. A customer can see the relevant detailed information within
seconds, rather than waiting for days or weeks.
 E-Commerce increases the competition among organizations and as a result, organizations provide
substantial discounts to customers.

Advantages to Society

 Customers need not travel to shop a product, thus less traffic on road and low air pollution.
 E-commerce helps in reducing the cost of products, so less affluent people can also afford the
products.
 E-commerce has enabled rural areas to access services and products, which are otherwise not
available to them.
 E-commerce helps the government to deliver public services such as healthcare, education, social
services at a reduced cost and in an improved manner.

E-Commerce – Disadvantages
The disadvantages of e-commerce can be broadly classified into two major categories –

 Technical disadvantages
 Non-Technical disadvantages

Technical Disadvantages

 There can be lack of system security, reliability or standards owing to poor implementation of e-
commerce.
 The software development industry is still evolving and keeps changing rapidly.
 In many countries, network bandwidth might cause an issue.
 Special types of web servers or other software might be required by the vendor, setting the e-
commerce environment apart from network servers.
 Sometimes, it becomes difficult to integrate an e-commerce software or website with existing
applications or databases.
 There could be software/hardware compatibility issues, as some e-commerce software may be
incompatible with some operating system or any other component.

Non-Technical Disadvantages
  Initial cost − The cost of creating/building an e-commerce application in-house may be very high.
There could be delays in launching an e-Commerce application due to mistakes, and lack of
experience.
 User resistance − Users may not trust the site being an unknown faceless seller. Such mistrust
makes it difficult to convince traditional users to switch from physical stores to online/virtual stores.
 Security/ Privacy − It is difficult to ensure the security or privacy on online transactions.
 Lack of touch or feel of products during online shopping is a drawback.
 E-commerce applications are still evolving and changing rapidly.
 Internet access is still not cheaper and is inconvenient to use for many potential customers, for
example, those living in remote villages.

What is trade cycle

It is the series of exchanges, between a customer and supplier that take place when a commercial exchange
is executed. A general trade cycle consists of:

 Pre-Sales: Finding a supplier and agreeing the terms.

 Execution: Selecting goods and taking delivery.
 Settlement: Invoice (if any) and payment.
 After-Sales: Following up complaints or providing maintenance.

For business-to-business transactions it typically involves the provision of credit with execution preceding
settlement whereas in consumer-to-business these two steps are typically co-incident.
The nature of this can indicate the e-Commerce technology most suited to the exchange.

Electronic Commerce under different perspectives:

Let’s see how Electronic Commerce (EC) is defined under each perspective.

1. Communications Perspective

EC is the delivery of information, products /services, or payments over the telephone lines, computer
networks or any other electronic means.

2. Business Process Perspective

EC is the application of technology toward the automation of business transactions and work flow.

3. Service Perspective

EC is a tool that addresses the desire of firms, consumers, and management to cut service costs while
improving the quality of goods and increasing the speed of service delivery.

4. Online Perspective

EC provides the capability of buying and selling products and information on the internet and other online
services.

Classifications of E-Commerce Applications

Electronic Commerce (e-Commerce) is a general concept covering any form of business transaction or
information exchange executed using Information and Communication Technologies (ICTs). E-Commerce
takes place between companies, between companies and their customers, or between companies and public
administrations. Electronic Commerce includes electronic trading of goods, services and electronic material.

E-Commerce systems include commercial transactions on the Internet but their scope is much wider than
this; they can be classified by application type:

Electronic Markets:

The principle function of an electronic market is to facilitate the search for the required product or service.
Airline booking systems are an example of an electronic market.

Electronic Data Interchange (EDI):

Electronic Data Interchange (EDI) is the electronic exchange of business documents in a standard, computer
process able, and universally accepted format between-trading partners.

EDI is quite different from sending electronic mail, messages or sharing files through a network. In EDI, the
computer application of both the sender and the receiver, referred to as Trading Partners (TPs) have to agree
upon the format of the business document which is sent as a data file over electronic messaging services.

The two key aspects of EDI that distinguish it from other forms of electronic communication, such as
electronic mail, are:

1. The information transmitted is directly used by the recipient computer without the need for human
intervention is rarely mentioned but often assumed that EDI refers to interchange between
businesses. It involves two or more organization or parts of organization communicating business
information with each other in a common agreed format.
2. The repeated keying of identical information in the traditional paper-based business.

Communication creates a number of problems that can be significantly reduced through the usage of EDI.
These problems include: -

 Increased time
 Low accuracy
 High labour charges
 Increased uncertainty.

Internet Commerce

The Internet (and similar network facilities) can be used for advertising goods and services and transacting
one-off deals. Internet commerce has application for both business to- business and business to consumer
transactions.
Porter's Value Chain model

Porter's Value Chain focuses on systems, and how inputs are changed into the outputs purchased by
consumers. Using this viewpoint, Porter described a chain of activities common to all businesses, and he
divided them into primary and support activities, as shown below.

Primary Activities

Primary activities relate directly to the physical creation, sale, maintenance and support of a product or
service. They consist of the following:

 Inbound logistics – These are all the processes related to receiving, storing, and distributing inputs
internally. Your supplier relationships are a key factor in creating value here.

 Operations – These are the transformation activities that change inputs into outputs that are sold to
customers. Here, your operational systems create value.

 Outbound logistics – These activities deliver your product or service to your customer. These are
things like collection, storage, and distribution systems, and they may be
internal or external to your organization.

 Marketing and sales – These are the processes you use to persuade (agree) clients to purchase
from you instead of your competitors. The benefits you offer, and how well you communicate them,
are sources of value here.

 Service – These are the activities related to maintaining the value of your product or service to your
customers, once it's been purchased.

Support Activities

These activities support the primary functions above. In our diagram, the dotted lines show that each
support, or secondary, activity can play a role in each primary activity. For example, procurement supports
operations with certain activities, but it also supports marketing and sales with other activities.
  Procurement (purchasing) – This is what the organization does to get the resources it needs to
operate. This includes finding vendors and negotiating best prices. How a company obtain raw
materials or fixed assets.
 Human resource management – This is how well a company recruits, hires, trains, motivates,
rewards, and retains its workers. People are a significant source
of value, so businesses can create a clear advantage with good HR practices.

 Technological development – These activities relate to managing and processing information, as

well as protecting a company's knowledge base. Minimizing information technology costs, staying
current with technological advances, and maintaining technical excellence are sources of value
creation.

 Infrastructure – These are a company's support systems, and the functions that allow it to maintain
daily operations. Accounting, legal, administrative, and general management are
examples of necessary infrastructure that businesses can use to their advantage.

Inter-Organizational Value Chain

The value chain of a company is part of overall value chain. The overall competitive advantage of an
organization is not just dependent on the quality and efficiency of the company and quality of products but
also upon the of its suppliers and wholesalers and retailers it may use. The analysis of overall supply chain is
called the value system.

Different parts of the value chain

1. Supplier
2. Firm
3. Channel
4. Buyer

Value system in automobile assembly, food supermarkets and the insurance sector are summaries as

 Automobile assembly
 Food supermarkets
 Insurance sector

Automobile assembly
Automobile assembly uses vast number of component; the making of a car is a
component assembly job. Some of the component, such as engine and body panels, may be produced by the
company, whereas most of the parts lights, brakes, wheels, tyres, etc. are bought in from suppliers.
Food supermarkets
Food retailers divide into those, such as the large supermarket chains, who deal direct
with the manufacturing and the small retailers who need to deal with a wholesaler.
The supermarket supply chain is from the food manufacturing. The supply chains of the supermarket differ
from smaller retailers who get much of their produce from a wholesaler rather than direct from the
manufacturing.

Insurance sectors
Insurance policies to the public can be
 Sold by an agent employed by the insurance company;
 Sold by an intermediary(the channel), typically an insurance broker;
 Direct sales using telesales or the internet.

Competitive strategy
The ability of an organization to prosper arises from its competitive advantage over the other organization
operating within its market sector.
The three basic strategies for competitive advantage are
 Cost leadership
 Differentiation
 Focus

Cost leadership means you provide reasonable value at a lower price. Companies do this by
continuously improving operational efficiency. That usually means paying their workers less. Some
compensate by offering intangible benefits such as stock options, benefits or promotional opportunities.
Others take advantage of unskilled labor surpluses. As these businesses grow, they can use economies of
scale and buy in bulk.

Differentiation means you deliver better benefits than anyone else. A company can achieve
differentiation by providing a unique or high-quality product. Another method is to deliver it faster. A third
is to market in a way that reaches customers better. A company with a differentiation strategy can charge a
premium price. That means it usually has a higher profit margin.

Focus means you understand and service your target market better than anyone else. You can use either
cost leadership or differentiation to do that. The key to focusing is to choose one specific target market.
Often it's a tiny niche that larger companies don't serve. For example, community banks use a focus strategy
to gain sustainable competitive advantage. They target local small businesses or high net worth individuals.
Their target audience enjoys the personal touch that big banks may not be able to give. They are willing to
pay a little more in fees for this service. These banks are using a differentiation form of the focus strategy.
 Porter’s Five Forces Model:
Michael Porter described a concept that has become known as
the “five forces model”. This concept involves a relationship between competitors within an industry,
potential competitors, suppliers, buyers & alternative solutions to the problem being addressed.

Threat of Potential Entrants:

The threat of new entrants relates to the ease with which a new
company or a company in a different product area can enter a given trade sector. Barrier to entry into
a particular market include the need for capital, knowledge and skills. The barriers to entry for e.g.
to the vehicle assembly sector are massive; to start building cars there is the need to develop a new
model range, build a car assembly plant, contract a large number of component suppliers and sign up
a dealer network. Getting into business in building personal computers is, in contrast, much easier;
the components are readily available and there is not the same need for investment in product
development or large scale production facilities before the company makes a start.
Threat of Substitution:

Substitution is a threat to existing players where a new product becomes available that supplies the
same function as the existing product or service. The classic examples are the (partial) substitution of
natural fibers such as cotton and wool by synthetic fibers or the replacement of glass bottles by a
plastic alternative in some sectors of the packaging industry. Existing players can protect themselves
by keeping their product up-to-date.

 Bargaining power of Buyers:

For a business to be profitable the cost of producing and distributing its product has to be less than
the price it can fetch in the market place. Where there are a number of competitors in the market or a
surplus of supply the buyer is in a strong position to bargain for a low price and for other favorable
conditions of trade.
 Bargaining power of Suppliers:
The organization, while trying to get an adequate price from its buyers, will be looking to get
favorable terms from its own suppliers at the next stage along the value chain. The organization’s
ability to get a good deal is the mirror image of its position with its buyers. If the supply is plentiful
and/or there are several suppliers it should get a good price. If the product is scarce or the number of
suppliers that are able to meet its need is limited then the supplier is in a more favorable position.

 Competition between existing players:

The final force is the completion between existing players in the market. The competition is to get
the buyers and to trade at a price that produces an acceptable profit. That competition is won on the
basis of the generic competitive advantage of cost or differentiation. The competitive position of
each organization is determined by the deal it is able to make with the suppliers.

Important Points of Value Chain:

1. The Organization need to establish which of its inter organizational relationships add to its
competitive advantage & which fail to achieve appropriate levels of quality & price.
2. The Linkages in the value system have to be managed.
3. The Physical Linkage involves good handling, transport & warehousing
4. Value chain must be clear & understandable.
5. The essential stages of a value chain are: Pre-sale, Execution, settlement & after-sales.

First Mover Advantage

The first mover advantage refers to an advantage gained by a company that first
introduces a product or service to the market. The first mover advantage allows a company to establish
strong brand recognition and product/service loyalty before other entrants.
It is important to note that the first mover advantage only refers to a large company that moves into a
market. For example, Amazon was not the first company to sell books online. However, it was the first large
company to do so.
First mover is a term that describes a certain competitive advantage a business obtains by virtue of being the
first to bring a specific product or service to market. Among other things, being first typically enables a
company to establish strong brand recognition and customer loyalty before other entrants to the market arise.
Another advantage is the additional time a first mover business has to perfect or improve its product or
service.

Sustainable Competitive Advantages

Sustainable competitive advantages are company assets, attributes, or abilities that are difficult to duplicate
or exceed; and provide a superior or favorable long term position over competitors.

Types and Examples of Sustainable Competitive Advantages

 Low Cost Provider/ Low pricing

 Market or Pricing Power
 Powerful Brands
 Strategic assets
 Adapting Product Line
Business Strategy
Definition: Business strategy can be understood as the course of action or set of decisions which assist the
entrepreneurs(stakeholders) in achieving specific business objectives.

It is nothing but a master plan that the management of a company implements to secure a competitive
position in the market, carry on its operations, please customers and achieve the desired ends of the business.

A business strategy is a set of competitive moves and actions that a business uses to attract customers,
compete successfully, strengthening performance, and achieve organizational goals. It outlines how
business should be carried out to reach the desired ends.

Levels of Business Strategy

1. Corporate level strategy: Corporate level strategy is a long-range, action-oriented, integrated and
comprehensive plan formulated by the top management. It is used to ascertain business lines, expansion
and growth, takeovers and mergers, diversification, integration, new areas for investment and divestment
and so forth.
2. Business level strategy: The strategies that relate to a particular business are known as business-
level strategies. It is developed by the general managers, who convert mission and vision into concrete
strategies. It is like a blueprint of the entire business.
3. Functional level strategy: Developed by the first-line managers or supervisors, functional level
strategy involves decision making at the operational level concerning particular functional areas like
marketing, production, human resource, research and development, finance and so on.
WHAT IS STRATEGY FORMULATION?
Strategy formulation is the process of using available knowledge to document the intended direction of a
business and the actionable steps to reach its goals.

This process is used for resource allocation, prioritization, organization-wide alignment, and validation of
business goals.

OR

Strategy formulation refers to the process of choosing the most appropriate course of action for the
realization of organizational goals and objectives and thereby achieving the organizational vision.

Implementation planning
An implementation plan—also known as a strategic plan

The purpose of an implementation plan is to ensure that your team can answer the who, what, when, how,
and why of a project before moving into the execution phase. In simple terms, it's the action plan that turns
your strategy into specific tasks.

OR

Strategy implementation is the translation of chosen strategy into organizational action so as to achieve
strategic goals and objectives. Strategy implementation is also defined as the manner in which an
organization should develop, utilize, and organizational structure, control systems, and culture to follow
strategies that lead to competitive advantage and a better performance.
 UNIT II

E-Commerce - Business Models

E-commerce business models can generally be categorized into the following categories.

 Business - to - Business (B2B)

 Business - to - Consumer (B2C)
 Consumer - to - Consumer (C2C)
 Consumer - to - Business (C2B)
 Business - to - Government (B2G)
 Government - to - Business (G2B)
 Government - to - Citizen (G2C)

Business - to – Business

A website following the B2B business model sells its products to an intermediate buyer who then sells the
product to the final customer. As an example, a wholesaler places an order from a company's website and
after receiving the consignment, sells the end product to the final customer who comes to buy the product at
one of its retail outlets.

Business - to – Consumer

A website following the B2C business model sells its products directly to a customer. A customer can view
the products shown on the website. The customer can choose a product and order the same. The website will
then send a notification to the business organization via email and the organization will dispatch the
product/goods to the customer.
Consumer - to - Consumer

A website following the C2C business model helps consumers to sell their assets like residential property,
cars, motorcycles, etc., or rent a room by publishing their information on the website. Website may or may
not charge the consumer for its services. Another consumer may opt to buy the product of the first customer
by viewing the post/advertisement on the website.

Consumer - to – Business

In this model, a consumer approaches a website showing multiple business organizations for a particular
service. The consumer places an estimate of amount he/she wants to spend for a particular service. For
example, the comparison of interest rates of personal loan/car loan provided by various banks via websites.
A business organization who fulfills the consumer's requirement within the specified budget, approaches the
customer and provides its services.
Business - to – Government

B2G model is a variant of B2B model. Such websites are used by governments to trade and exchange
information with various business organizations. Such websites are accredited by the government and
provide a medium to businesses to submit application forms to the government.

Government - to – Business

Governments use B2G model websites to approach business organizations. Such websites support auctions,
tenders, and application submission functionalities.

Government - to – Citizen

Governments use G2C model websites to approach citizen in general. Such websites support auctions of
vehicles, machinery, or any other material. Such website also provides services like registration for birth,
marriage or death certificates. The main objective of G2C websites is to reduce the average time for
fulfilling citizen’s requests for various government services.
E-Commerce - B2B Model
B2B covers a large number of applications, which enables business to form relationships with their
distributors, re-sellers, suppliers, etc. Following are the leading items in B2B ecommerce.

 Electronics
 Shipping and Warehousing
 Motor Vehicles
 Petrochemicals
 Paper
 Office products
 Food
 Agriculture

Key Technologies

Following are the key technologies used in B2B e-commerce –

 Electronic Data Interchange (EDI) − EDI is an inter-organizational exchange of business

documents in a structured and machine process able format.

 Internet − Internet represents the World Wide Web or the network of networks connecting
computers across the world.

 Intranet − Intranet represents a dedicated network of computers within a single organization.

 Extranet − Extranet represents a network where the outside business partners, suppliers, or
customers can have a limited access to a portion of enterprise intranet/network.

 Back-End Information System Integration − Back-end information systems are database

management systems used to manage the business data.

Architectural Models

Following are the architectural models in B2B e-commerce −

 Supplier Oriented marketplace − In this type of model, a common marketplace provided by

supplier is used by both individual customers as well as business users. A supplier offers an e-store
for sales promotion.

 Buyer Oriented marketplace − In this type of model, buyer has his/her own market place or e-
market. He invites suppliers to bid on product's catalog. A Buyer company opens a bidding site.

 Intermediary Oriented marketplace − In this type of model, an intermediary company runs a

market place where business buyers and sellers can transact with each other.
Consumer Shopping Procedure

Following are the steps used in B2C e-commerce −

A consumer −

 Determines the requirement.

 Searches available items on the website meeting the requirement.
 Compares similar items for price, delivery date or any other terms.
 Places the order.
 Pays the bill.
 Receives the delivered item and review/inspect them.
 Consults the vendor to get after service support or returns the product if not satisfied with the
delivered product.

E-Commerce – EDI
EDI stands for Electronic Data Interchange. EDI is an electronic way of transferring business documents in
an organization internally, between its various departments or externally with suppliers, customers, or any
subsidiaries. In EDI, paper documents are replaced with electronic documents such as word documents,
spreadsheets, etc.

EDI Documents

Following are the few important documents used in EDI −

 Invoices
 Purchase orders
 Shipping Requests
 Acknowledgement
 Business Correspondence letters
 Financial information letters
Steps in an EDI System

Following are the steps in an EDI System.

 A program generates a file that contains the processed document.

 The document is converted into an agreed standard format.
 The file containing the document is sent electronically on the network.
 The trading partner receives the file.
 An acknowledgement document is generated and sent to the originating organization.

Advantages of an EDI System

Following are the advantages of having an EDI system.

 Reduction in data entry errors. − Chances of errors are much less while using a computer for data
entry.

 Shorter processing life cycle − Orders can be processed as soon as they are entered into the system.
It reduces the processing time of the transfer documents.

 Electronic form of data − It is quite easy to transfer or share the data, as it is present in electronic
format.

 Reduction in paperwork − As a lot of paper documents are replaced with electronic documents,
there is a huge reduction in paperwork.

 Cost Effective − As time is saved and orders are processed very effectively, EDI proves to be highly

cost effective.
 Standard Means of communication − EDI enforces standards on the content of data and its format
which leads to clearer communication.
Software Agents
Software agents are a piece of software which works for the user. However software agent is not just a
program. An agent is a system situated within and a part of an environment that senses that environment and
acts on it. Important use of agent concept is, as the tool for analysis not as dosage. As the system changes on
can understand it. OR

Software agents represent an evolutionary step beyond conventional computer programs. Software agents
can activate and run themselves, not requiring input from or interaction with a human user. Software agents
can also initiate, oversee, and terminate other programs or agents including applications and online
intelligent agents.

Characteristics of Software agents:

Software agents are like guards and locomotives of most E-Commerce. The following are very few
characteristics:
Software agents can do their task without any outsource intervention.
Social interaction with other software agents and human.
Software agents are specific in their goals.
Good software agent is the one which has the attitude to receive and adopt changes
 The agent must be programmed in a powerful language so as to express the rules.
Safety of the information must be promised by the agent.
Effective usage of the existing resources.
Agent must be a good sailor
Agents must be very careful in handling unauthorized users. The same information must be accessed
by the user to which they have right.

Type of Software agents:

Agents are classified into different types based on the characteristics they possess. In order to possess the
above properties agents must have distinct features such as locomotion, integration, co-operation,
information, stimulation, etc. For the same sake software agents are classified into 8 agents.

Collaborative agents:
A collaborative agent is a software program that helps users solve problem, especially in complex or
unfamiliar domains by correcting errors, suggesting what to do next, and taking care of low level details.
Collaborative agents are also refereed as collagen. In spite of their behavior of autonomy, co-Operation,
and learning, collagen punctuate the first two behaviors. In order to perform these they have to
agree on acceptable protocols.

Interface agents:
Interface agents are computer programs that employ machine learning techniques in order to provide
assistance to a user dealing with a particular application. These agents take sufficient amount of time to
understand and learn human behavior before they are onto work. In spite of their artificial learning
thoughts they are limited co-operative with other agents.
Mobile agents:
A mobile agent is an executing program that can migrate during execution from one machine to another in
a hetero generous network. Mobile agents are used to solve many problem of network
Computing with minimum bandwidth and connectivity. The theme behind these agents is, „give program
the ability to move‟. The main advantages of mobile agent over stationery agent are:
(a)This is not bound to the system where it begins execution.
(b) Can move from one system to another within the network.
(c) Both the state and code is transported.

Information/Internet agents:
 The intelligent part of software which can automatically search for information on the web site is termed
as information agents. Information system can be considered as knowledge base system.

Hybrid agents:
Combining two or more of the previous mentioned agent philosophies will yield a better
Functioning agent. E.g. Synergy of reactive and collaborative model. The expectation is that this
hypothesis will come true.

Heterogeneous agents:
These agent systems unlike hybrid, refers to an integrated set up of at least two or
more agents which belong to two or more different agent classes. These may also contain two or more
hybrid agents.

Smarts agents:
The smart agents are the new form of software agents that interface with other agents forming an artificial
intelligence. SMART stands for System for Managing Agents for Real Time. The key concept lies here is
not the entire individual agent need be intelligent.

Role of Software Agents in E-Commerce:

This part focus on the basic fundamentals including, the terms used in E-Commerce with respect to
software agents and different examples which explains the role.

Software Agents enabling the formation of virtual organization:

Virtual systems are the decentralized
business networks which work in flexible. To have efficient operation and productivity virtual organizations
must be able to communicate, Co-operate and Co-ordinate(the3Cs of business) with each other. Software
agents are effective tool to virtual organizations since they provide mechanisms to automate several
activities like, gathering data, refining information, negotiate business deals and also intelligent agents work
like human beings in supplying and buying goods having the artificial machine knowledge.

The reason behind the use of Software Agents: The software agents are used due to the effect of
following reasons:

Software Agents and Mobility:

Mobile agents are a kind of software agent that represent a revolution in how programs are distributed ,run
and server resources shared and how computer users interact with online services.

Coping with Emergencies:

There are situations where people, organizations or computer systems will undergo stress. During this stage
they fail to take quick actions which are common or daily tasks. For an
individual, if there are some natural problems like death in the family, illness, or job problem etc. they fail
to take care of simple thing like paying phone bill or electricity bill etc.

Life agents:
Life agents are software agents that are initiated and run in the background and act directly or indirectly on
the clients side automatically, monitoring the progress over the period of time.
Applications And Benefits Of Software Agents:

 Agents make less work for the end user and application developer.
 The agent can adapt to its user preferences and habit over a course of time.
 It will intelligently get shared among the community.
 Mobile agents manage the users E-mail, fax, phone and pager as well as linking the user to
Telescript-enabled messaging and communication services such as America Online and AT&T
Persona Link Services
 The most favorite area with respect to reactive agents is games and entertainment industry
 Shopping agents are ideal applications of Agent Builder agents. These agents can be used to locate
merchandise, compare prices, place orders, etc.

Just-in-Time Delivery

Just-in-time (JIT) delivery is a strategy in supply-chain management intended to sync orders

to suppliers with production or delivery schedules. For example, a company that sells home
furniture items but doesn’t manufacture them will order the furniture from the manufacturer
when a customer makes a purchase.

OR

It is inventory management method where labor, material, goods (which will be used in
manufacturing) are refilled or schedules to arrive exactly needed in manufacturing process.

Advantages and Disadvantages of JIT

JIT inventory systems have several advantages over traditional models. Production runs are
short, which means that manufacturers can quickly move from one product to another. Also,
this method reduces costs by minimizing warehouse needs. Companies also spend less
money on raw materials because they buy just enough resources to make the ordered
products and no more.

The disadvantages of JIT inventory systems involve potential disruptions in the supply
chain. If a raw-materials supplier has a breakdown and cannot deliver the goods promptly,
this could conceivably stall the entire production line. A sudden unexpected order for goods
may delay the delivery of finished products to end clients.