05) E-COMMERCE D.K.

MONE

E-Commerce is defined as activities involving commercial transactions in which

order is placed electronically and goods or services are delivered in tangible or
electronic form.

E-business is different from E-commerce as the former involves not only business
transactions but other activities such as product development, production,
inventory control, accounting and finance, human resource management etc.
whereas E-commerce deals only with interactions between a firm and its
customers/ suppliers. Hence E-business is a wider term than E-commerce.

Traditional business e-business

Its formation is difficult Its formation is simple
Involves high cost to set it up Involves low cost to set it up
Involves high operating cost Involves operating cost
Its location needs to be near the source It need not be
of raw material and market
Physical presence of supplier and Not necessary
customer is necessary
Usually deals with customers through Establishes direct contact with
agents customers
Limited scope for expansion World is the market
Feedback from customers takes time Feedback is instant
Requires personal touch with Low
customers
Easy to send samples Difficult to send samples
Transaction are less risky due to face to More risk of personal information
face contact getting exposed
Semi skilled staff will do Highly skilled staff is required
Enjoys less government support Gets more support of government

Benefits of e-commerce over traditional business set up:

1) There are no geographical boundaries restricting the growth of this

business. Wherever computer network is available there the business will
 expand. Hence this business has global presence. This improves the
business operations of the firm. Customer has the freedom to choose the
supplier ignoring the geographical boundaries. Smallest supplier has global
presence.
2) This form of business offers lots of product information, pre and post sales
support to the customer, guidance to customer, and rapid response to
customer’s complaints. Hence this business offers good quality services to
customers.
3) Through the network supplier finds out personal requirements of
customers and tailor make the products to suit each customer’s
requirements. Information is available at the click of mouse.
4) This business makes it possible to send goods from the manufacturer
directly to the customer ignoring the chain of distribution i.e. goods need
not be sent to wholesalers/retailers warehouse/shop. Hence this saves
time of order processing. In case of supply of electronic goods the supply
chain can be eradicated completely for e.g. delivery of video, music,
magazine, newspapers etc. Customer gets goods /services rapidly without
waiting for local supplier who may have limited stock.
5) Major advantage of e-commerce is cost reduction. There are no rentals to
be paid, no need of appointing salesmen, less paperwork etc. Thus it is
possible to offer goods at a low price. This benefits customers immensely.
This has a great advantage of paperless and cashless society.
6) This business offers lot of convenience to the buyer. On the internet
transactions can be conducted 24/7. He can place order from anywhere
and can receive goods within a short time. The time involved in order
processing is reduced substantially.
7) It is much easier to start e-business than traditional business. It requires
lesser capital. Majority investment is required in computer network only.

E-TAILING it is a short form for e-retailing which means selling goods on internet.
It involves business directly with customer (B2C). There are various websites
offering this services such as [Link], [Link], [Link] etc. They
create on line catalogues of goods and services that they offer. Even there are
sites to compare prices of various web sites and this buyers to choose the
appropriate e-tailors.

ADVANTAGES OF E-TAILING:

A) Customers all over the world can be contacted.

B) It is easy and inexpensive method of starting business.
C) Establishment expenditure is low.
D) E-tailors gets valuable information about the buying habits, changing trends
of fashion.
E) For the buyer it is a convenient, time and energy saving shopping. They can
buy goods 24/7 instead of waiting for shopping hours.

DISADVANTAGES OF E-TAILING:

a) It is difficult to gain trust of the customers at least in the initial stage

b) It involves certain expenditure to create and update website. It involves
certain cost to deliver goods, dealing with customers complaints.
c) Customers do not get the shopping experience which they are used in store
shopping. They do not get to hold and feel goods which they want to buy.
They do not even get to clarify their doubts by discussing their issues with
salesmen.
d) Customers are afraid to share their personal details online as they are
worried of information getting misused.

E-ADVERTISING: this means electronic advertising i.e. sending advertisement

messages for customers via internet. Hence it is also called online advertising.
These advertisements are prepared by professional/ advertising agencies and the
server delivers the advertisement.

There are a few types of e-advertising such as :

1) Cookie: it is a file on some computer that records specific information from

their search history to promote a certain advertisement.
2) Web banner: this promotes company’s website through an ad server. It
flashes on the laptop screen.
 3) Pop ups: this kind of an ad pops up on the screen in a small box. Or a
floating ad keeps moving across the screen.

ADVANTAGES OF E-ADVERTISING:

1) Compared to TV or a print advertisement the cost of e-advertising is low

hence suits the budget of the company. These advertisements appear 24/7.
2) This advertisement reaches across the world hence wide range of
customers can be contacted.
3) Once the customer is attracted he can place his order online hence it is very
convenient and result oriented.
4) It is possible to expose the advertisement to a desired consumer or desired
geographic audience.

DISADVANTAGES:

1) Every company wants to grab attention of consumers. Hence these ads

create a clutter and their effectiveness and connectivity with consumers is
lost. Most of them are ignored by the computer user.
2) The advertiser needs to search for niche sites to connect with desired
customers for increasing its effectiveness.
3) A large number of users in India still prefer traditional forms of ads.
4) Once an ad flashes on Internet it is exposed to masses. Hence a bad ad can
damage the reputation of the company. This requires constant monitoring
and control over the content of an ad.

E-MARKETING also called electronic marketing is the process of marketing

company’s goods/services via internet. It is also called Internet marketing, Web
marketing, Digital marketing or Online marketing. This can be in the form of Video
marketing, e-mail marketing, Blogging etc.

E-SECURITY: use of internet involves high risk of frauds, hacking, phishing etc.
protection of data and information stored in computer exposed through internet
is a serious challenge. Some of the threats are as follows:
 Malware, botnet, Computer viruses, worms, ransomware, spyware, Trojan
horse, keylogger or keyboard capturing etc.

There are various security measures suggested such as Network layer security,
Internet protocol security, Security token, encryptions, digital signature etc.

ERP i.e. ENTERPRISE RESOURCE PLANNING:

ERP is a software or a Computer system used to manage the resources/activities

of an organization. The business processes of different departments of an
organization are managed through a centralized application. This system helps
taking decisions. The system can manage and track everything. It is a cross-
functional software that provides support to all the processes within an
organization. ERP can efficiently streamline the business operations of
organization. ERP system can have following modules:

A) Human Resource Module: this helps HR team in efficient management of

Human Resources. It helps to manage employee information, track
employee records like performance review, designations, job description,
training etc. It helps the management to track down the qualifications,
attendance, job performance, promotions, retirement date etc. It can have
a sub-module such as Payroll System to show salaries paid, bonus paid,
increments due, and deductions from salaries etc.
B) Inventory Module: this module can be used to track the stock of items.
Items can be identifies by unique serial number. This system helps the
management to track down purchases made, sale of goods, orders to be
placed for separate items, trace the location of each item etc. This module
can be integrated with Purchase module.
C) Sales Module: Sales process include sales queries and enquiry analysis and
handling, quotation drafting, accepting sales orders, drafting sales invoices,
dispatch of goods, pending sales orders etc. CRM module can take help of
Sales module for future opportunity creation and lead generation.
D) Purchase module: this system deals with procurement of raw material
required, list of suppliers linking them with items to be bought from them,
sending quotations request, receiving quotations, analyses of quotations,
 placing order, updating stocks and various reports etc. This module can be
integrated with Inventory module.
E) Finance and Accounting module: this module deals with inflow and outflow
of money/capital. This module deals with income, expenditure, profit and
loss, balance sheet, budgeting, bank statements, tax management etc. Any
financial data required for running business is available on one click in
Finance module.
F) Customer Relationship Management (CRM): this module deals with
boosting the sales performance through better customer service and
establishing healthy relationship with customers. This system deals with
customer services, history of customer’s dealings, calls, meetings etc. This
module is linked with Sales module to enhance sales opportunities.
G) Production module: this module is of great help to a manufacturing firm.
This system deals with designing a product, machine scheduling,
production planning, raw material required, daily production progress,
production forecasting and actual production reporting etc.
H) Supply chain management (SCM) : this module deals with flow of supply
from manufacturer to customers. This module deals with record of
wholesalers, super stockiest, distributors, demand and supply
management, retailers appointed to sale goods, their orders, their reports
about the market trends, sales returns and replacing process etc.

ERP can be formulated to suit the requirements of each organization.