UNIT - I
E-Commerce
E-Commerce or Electronics Commerce is a methodology of modern business, which
addresses the requirements of business organizations. It can be broadly defined as the
process of buying or selling of goods or services using an electronic medium such as the
Internet. This tutorial takes adopts a simple and practical approach to explain the governing
principles of e-commerce.
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 Interchange (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. Traditional Commerce E-Commerce
No.
1 Heavy dependency on information Information sharing is made easy via electronic
exchange from person to person. communication channels making little
dependency on person to person information
exchange.
2 Communication/ transaction are done in Communication or transaction can be done in
synchronous way. Manual intervention is asynchronous way. Electronics system
required for each communication or automatically handles when to pass
transaction. communication to required person or do the
transactions.
3 It is difficult to establish and maintain A uniform strategy can be easily established and
standard practices in traditional maintain in e-commerce.
commerce.
4 Communications of business depends In e-Commerce or Electronic Market, there is no
upon individual skills. human intervention.
5 Unavailability of a uniform platform as E-Commerce website provides user a platform
traditional commerce depends heavily where al l information is available at one place.
on personal communication.
6 No uniform platform for information E-Commerce provides a universal platform to
sharing as it depends heavily on support commercial / business activities across
personal communication. the 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 support. 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 provides 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 - Business Models / Types of E Commerce
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 endproduct
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.
IT and Business
The IT department is at the epicentre of the building and maintenance of communications
networks for businesses small and large. Not many companies, big or small, could survive
without a good IT department making them imperative to a business’s day to day existence.
From sending an email, to changing a password, accessing databases and everything in
between IT are there to help every step of the way. IT in business is ultimately to help the
business be more efficient and productive. It has a number of different roles including but
not limited to:
Helping the company be more productive, time = money.
Optimising business performance
Safeguarding data and troubleshooting
Saving the business money
Improving customer experience, satisfaction and communication
Streamlining communication systems
Enhancing managerial decision-making
Helping the business expand globally
Providing staff access to company information
In this article, we are going to look at hat is the role of information technology in business
and what makes this department so important to have a safe business.
Safeguarding data and information
The ultimate goal of safeguarding is to protect data from compromise. The IT department
will ensure data Safeguarding, meaning industry-standard safeguards are in place,
company-wide to protect against the destruction, loss, misuse, unauthorised disclosure, or
alteration of the company-related data or employee confidential information. IT also has to
ensure they are abiding by data-protection laws through safeguarding important information
from corruption, compromise or loss.
Examples of data breaches could be hackers stealing information or misused/shared
personal data in regards to the company of the employees.
Troubleshooting of problems
Troubleshooting refers to problem-solving in the digital world. Troubleshooting can be
applied to a number of different things such as the repairing of failed digital products or
processes on a PC or a system. When a problem is troubleshot, a systematic and logical
search is carried out for the source of a problem with the aim to solve it and make the
product or process fully operational again. Troubleshooting is also used to identify the
symptoms when something is wrong.
A competent IT department in any business is the first port of call when it comes to an issue
or problem with a computer. If an employee has locked themselves out of their computer,
forgotten a password or cannot get access to a particular drive, for example, IT is usually a
quick call away from getting this issue fixed.
Security and the maintenance of databases
The IT department is responsible for the efficiency and security procedures of the business
are up to standard. [Link] defines IT security as
‘intending to prevent the manipulation of data and systems by unauthorised third parties.
The meaning behind this is those socio-technical systems, i.e. people and technology,
within companies/organisations and their data are protected against damage and threats’.
IT is also there for the creation, maintenance and administration of databases for things
such as businesses sales transactions, financial records, product catalogues, trends,
customer profiles and marketing activities to name but a few.
The management of cloud-based solutions
So what is a cloud-based solution? It is an on-demand service for almost anything and
everything you can ‘save’ such as computer network information, storage, applications or
resources accessed via the internet and through an external provider’s shared cloud (
servers that are accessed over the Internet,) computing infrastructure. Businesses large
and small, right from the local candle shop to industry giants such as Microsoft and Google
use cloud-based solutions to keep control of their digital or physical offices and employees
globally.
Analyse data
Information technology is able to analyse specific data and help to plan the business journey
accordingly using the trends and information presented in data. IT can also efficiently equip
businesses with plentiful tools which can solve challenging business obstacles and help to
plan the future growth of the company. In this day and age, digital marketing is something
that businesses simply can’t live without as we have moved to the online world and users
have access to the net 24/7 from their smartphone devices. The internet provides a digital
marketing platform that allows businesses to promote their products or services to the global
market, all who can see products sitting in the comfort of their own remote office or home.
Quick and effective communication
The beauty of being in the 21st century for business is the ease of communication. We live
in an era where you can usually contact a business in an instant. The success of a company
largely depends on understanding its customer’s needs, behaviours, buying trends,
behaviours and satisfaction scales. Efficient and quick communication is the best
mechanism when it comes to dealing with customer demands, problems and solutions. The
beauty of information technology is that it allows businesses to communicate with potentially
millions of customers in real-time on a global scale. IT provides countless ways to
communicate with customers without them even having to leave the house. Such channels
include emails, social media chats video calls, webinars, member forums, email newsletters
or through the smartphone.
Concept of Electronic Communication
Electronic communication can be defined as, the communication which uses electronic media to
transmit the information or message using computers, e-mail, telephone, video calling, FAX
machine, etc. This type of communication can be developed by sharing data like images, graphics,
sound, pictures, maps, software, and many things.
Because of this e-communication, there is a lot of changes have occurred in work areas, society, etc.
Thus, people can simply access global communication with no physical movement. Please refer to
this link to know about – Electronic Communication Protocols
Electronic communication can be classified into different types like messaging, voice call, e-mail,
social media, etc. We know that e-communication has changed due to the way public interact and
communicate with each other for different purposes like personal or business. By using this, it is very
simple to communicate with the world.
1. PCs and Networking
Computer Networking
A network set up by connecting two or more computers and other supporting hardware
devices through communication channels is called a computer network. It enables
computers to communicate with each other and to share commands, data, etc., including
the hardware and software resources.
Uses of Computer Network:
o It allows you to share resources such as printers, scanners, etc.
o You can share expensive software and database among network users.
o It facilitates communications from one computer to another computer.
o It allows the exchange of data and information among users through a network.
Popular Computer Networks:
o Local Area Network (LAN)
o Metropolitan Area Network (MAN)
o Wide Area Network (WAN)
Local Area Network (LAN):
As the name suggests, the local area network is a computer network that operates in a small
area, i.e., it connects computers in a small geographical area like within an office, company,
school, or any other organization. So, it exists within a specific area, e.g. home network,
office network, school network, etc.
A local area network may be a wired or wireless network or a combination of both. The
devices in a LAN are generally connected using an Ethernet cable, which offers an interface
to connect multiple devices like router, switches, and computers. For example, using a single
router, few Ethernet cables, and computers, you can create a LAN at your home, office, etc.
In this network, one computer may act as a server and other computers, which are part of
the network, may serve as clients.
Topologies of LAN:
Topology: It refers to the arrangement of computers (nodes) in a computer network. The
main topologies of a local area network are as follows:
Ring Topology:
As the name suggests, in a ring topology, the computers are connected in a circular and
closed loop. The message in this topology moves only in one direction around the ring from
one node to another node and is checked by each node for a matching destination address.
So, the data keeps moving until it reaches its destination. All nodes are equal; a client-server
relationship does not exist between them. As the nodes are in the form of a ring, if one node
fails to transmit the data, the flow of communication is severed.
Star Topology:
In this topology, all the computers are separately connected to a central node or connection
point, which can be a server, a hub, a router, or a switch. This topology offers an advantage
that if a cable does not work, only the respective node will suffer, the rest of the nodes will
work smoothly. All data or messages that one node sends to another passes through the
central hub.
This topology is easy to design and implement as well as it is easy to add additional nodes
to the central node. The major drawback of this topology is that it is prone to bottleneck or
failure at the central connection point, i.e., failure at the central node will affect the entire
communication.
Bus Topology:
In this arrangement, the nodes (computers) are connected through interface connectors to
a single communication line (central cable) that carries the message in both the directions.
The central cable to which all the nodes are connected is the backbone of the network. It is
called a bus. The signal in this arrangement travels in both directions to all the machines
until it finds the recipient machine. It is easy to set up than other topologies as it uses only
a single central cable to establish the network.
Benefits of LAN:
o It offers a higher operating speed than WAN and MAN.
o It is less expensive and easy to install and maintain.
o It perfectly fulfills the requirement of a specific organization, such as an office, school, etc.
o It can be wired or wireless or a combination of both.
o It is more secure than other networks as it is a small set up that can be easily taken care of.
Primary Functions of LAN:
o Sharing of files: It allows you to share or transfer files from one computer to another
computer within the LAN. For example, in a bank, it can be used to send a file with the details
of transactions of a customer from the server to clients.
o Sharing of printers: It also allows shared access to a printer, file servers, etc. For example,
ten computers that are connected through LAN can use a single printer, file server, fax
machine, etc.
o Sharing of Computational capabilities: It allows the clients to access to the computational
power of a server, e.g., an application server as some applications which run on clients in a
LAN may require higher computational capabilities.
o Mail and message related services: It allows sending and receiving mails between
computers of a LAN. You are required to have a mail server for this.
o Database services: It also allows storing and retrieving data with the help of a database
server.
Metropolitan Area Network (MAN):
MAN is a high-speed network that spreads over a large geographical area such as a metro
city or town. It is set up by connecting the local area networks using routers and local
telephone exchange lines. It can be operated by a private company, or it may be a service
provided by a company such as a local telephone company.
MAN is ideal for the people of a relatively large area who want to share data or information.
It provides fast communication via high-speed carriers or transmission media such as
copper, fiber optics, and microwaves. The commonly used protocols for MAN are X.25,
Frame Relay, Asynchronous Transfer Mode (ATM), xDSL (Digital Subscriber Line), ISDN
(Integrated Services Digital Network), ADSL (Asymmetrical Digital Subscriber Line), and
more.
The area covered by MAN is larger than the LAN but smaller than a WAN. Its network ranges
from 5 to 50 km. Furthermore, it also provides uplinks for connecting LANs to WANs and
the internet. An organization can use a MAN to connect all of its LANs located at its different
offices across the city.
Examples of MAN:
o Cable TV Network
o Telephone service provides that provide high-speed DSL lines
o IEEE 802.16 or WiMAX
o Connected fire stations in a city
o Connected branches of a school in a city
Advantages of MAN:
o Less Expensive: It is less expensive to set up a MAN and to connect it to a WAN.
o High Speed: The speed of data transfer is more than WAN.
o Local Emails: It can send local emails fast.
o Access to the Internet: It allows you to share your internet connection, and thus multiple
users can have access to high-speed internet.
o Easy to set up: You can easily set up a MAN by connecting multiple LANs.
o High Security: It is more secure than WAN.
Wide Area Network (WAN):
WAN extends over a large geographical area. It is not confined within an office, school, city, or town
and is mainly set up by telephone lines, fiber optic, or satellite links. It is mostly used by big
organizations like banks and multinational companies to communicate with their branches and
customers across the world. Although it is structurally similar to MAN, it is different from MAN in
terms of its range, e.g., MAN covers up to 50 Kms, whereas WAM covers distances larger than 50
Km, e.g., 1000km or more.
A WAN works by using TCP/IP protocol in combination with networking devices such as switches,
routers, firewalls, and modems. It does not connect individual computers; rather, they are designed
to link small networks like LANs and MANs to create a large network. The internet is considered the
largest WAN in the world as it connects various LANs and MANs through ISPs.
The computers are connected to the wide area network through public networks, such as telephone
systems, leased lines or satellites. The users of a WAN do not own the network as it is a large setup
connecting the remote computer systems. However, they are required to subscribe to a service
provided by a telecommunication provider to use this network.
Advantages of a WAN:
o Large Network Range: It spans a large geographical area of 2000 km or more, e.g., from
one country to another countries.
o Centralized data: It allows your different office branches to use your head office server for
retrieving and sharing data. Thus, you don?t need to buy email servers, files server and back
up servers, etc.
o Get updated files and data: It provides an ideal platform for companies who need a live
server for their employees to exchange updated files within seconds.
o High bandwidth: It offers high bandwidth than a normal broadband connection. Thus, it
can increase the productivity of your company by offering uninterrupted data transfer and
communication.
o Workload Distribution: It helps distribute your workload to other locations. You can hire
employees in different countries and assign them to work from your office.
Examples of WAN:
Internet
US defense department
Stock exchanges network
Railway reservation system
Big Banks' cash dispensers' network
Satellite systems
2. E-Mail
E-Mail or electronic mail is the most used type of electronic communication. By using this
communication, one can send a message to another person through a mail immediately. For that, we
need to create an account to send an e-mail, media files, photos, documents, etc. This type of
communication has replaced many conventional types of communication due to many benefits.
So this type of communication is more suitable for different methods of communication. The benefits
of this communication are ease of usage, completely free, etc. Additionally, this type of electronic
communication doesn’t affect the surroundings.
3. The Internet
The Internet is a public and global communication network that provides direct connectivity
to anyone over a local area network (LAN) or Internet Service Provider (ISP).
The Internet is a public network that is connected and routed over gateways. End users are
connected to local access providers (LANs or ISPs), who are connected to the Internet access
providers, to network access providers, and eventually to the Internet backbone.
Since access to the Internet is open to all, there is a lack of control that may result in an unruly
proliferation of information.
It is a global system of interconnected computer networks.
Not regulated by any one
Thus content in the network is accessible to every one connected.
It is largest in terms of number of connected device.
It is owned by no one.
It is means of sharing information through out the world.
Security is depending of the user of device connected to network.
Users can access internet anonymously.
4. Intranet:
An intranet is a computer network that uses Internet Protocol technology to share
information, operational systems, or computing services within an organization. This term
is used in contrast to extranet, a network between organizations, and instead refers to a
network within an organization.
An intranet is a corporate LAN or wide area network (WAN) that uses Internet technology
and is secured behind company’s firewalls (see security and protection).
The objective is to organize each individual's desktop with minimal cost, time and effort to
be more productive, cost efficient, timely, and competitive.
An intranet may host multiple private websites and constitute an important component and
focal point of internal communication and collaboration.
Any of the well known Internet protocols may be found in an intranet, such as HTTP (web
services), SMTP (e-mail), and FTP (file transfer protocol). Internet technologies are often
deployed to provide modern interfaces to legacy information systems hosting corporate data.
The Intranet is a Web-based architecture used for managing internal information. Another
definition can be given as: Intranet is an organisation’s internal information system that uses
Internet tools, protocols, and technology. An Intranet could be something as simple as a single
HTML document made accessible on a Local Area Network with no access to the Internet at
large; or it could be as complex as one or more dedicated Web servers with thousands of
HTML documents linking together a worldwide network of corporate offices; or it could be
anything in between.
Uses of Intranet:
Increasingly, intranets are being used to deliver tools, e.g. collaboration (to facilitate working
in groups and teleconferencing) or sophisticated corporate directories, sales and customer
relationship management tools, project management etc., to advance productivity.
Intranets are also being used as corporate culture-change platforms. For example, large
numbers of employees discussing key issues in an intranet forum application could lead to new
ideas in management, productivity, quality, and other corporate issues.
In large intranets, website traffic is often similar to public website traffic and can be better
understood by using web metrics software to track overall activity. User surveys also improve
intranet website effectiveness. Larger businesses allow users within their intranet to access
public internet through firewall servers. They have the ability to screen messages coming and
going keeping security intact.
When part of an intranet is made accessible to customers and others outside the business, that
part becomes part of an extranet. Businesses can send private messages through the public
network, using special encryption/decryption and other security safeguards to connect one part
of their intranet to another.
Intranet user-experience, editorial, and technology teams work together to produce in-house
sites. Most commonly, intranets are managed by the communications, HR or CIO departments
of large organizations, or some combination of these.
Because of the scope and variety of content and the number of system interfaces, intranets of
many organizations are much more complex than their respective public websites. Intranets
and their use are growing rapidly.
The Extranet
An extranet, or “extended intranet”, uses the TCP/IP protocol network of the Internet, to link
intranets in different locations.
Extranet transmission is usually conducted over the Internet, which offers little privacy or
transmission security.
Therefore, when using an extranet, it is necessary to improve the security of connecting portions of
he Internet. This can be done by creating tunnels (see paragraph on security and protection) of
secured data flows, using cryptography and authorization algorithm.
The Internet with tunneling technology is known as a virtually private network (VPN).
Extranets provide secured connectivity between corporation’s intranets and the intranets of its
business partners, material suppliers, financial services, government, and customers.
Access to intranets is usually limited by agreements of the collaborating parties, is strictly controlled,
and is only available to authorized personnel.
The protected environment of the extranet allows groups to collaborate, sharing information
exclusively, and exchanging it securely.
Since an extranet allows connectivity between businesses through the Internet, it is an open and
flexible platform suitable for supply chain management.
To increase security, many companies replicate the database they are willing to share with their
business partners and separate them physically from their regular intranets.