Electric commerce
e
c
o
m
m
e
r
electronic An introduction to e-Commerce outlining:
commerce
The three basic e-Commerce technologies
c strategy
technologies
and
The trading exchanges to which they apply
e
applications
1
Definition of e-Commerce
e
c ‘Formulating commercial transactions at a site
remote from the trading partner and then using
o electronic communications to execute that
transaction.’
m
m The definition includes business to business and
business to consumer transactions.
e Many definitions are much broader covering, for
r
electronic
commerce example, the commercial use of
e-mail.
c strategy
technologies
and
e
applications
2
E-Commerce technologies
e
c Electronic
o Markets
m
m EDI Internet
Commerce
e
r
electronic
commerce
The three e-Commerce technologies are:
c strategy
technologies
and
Electronic Markets
Electronic Data Interchange
e
applications
Internet Commerce
3
Electronic markets
e
c The use of information and communications
technology to present a range of offerings available
o in a market segment and hence enable:
the purchaser to compare the prices (and other
m attributes);
m make a purchase decision.
e The usual example of an electronic market is an
airline booking system.
r
electronic
commerce
c strategy
technologies
and
There is the potential for new electronic markets to
be created using Internet technologies.
e
applications
4
Electronic Data Interchange (EDI)
e
c EDI provides a standardised system for coding
trade transactions so that they can be
o communicated directly from one computer system
to another.
m EDI removes the need for printed orders and
m invoices and avoids the delays and errors implicit in
paper handling.
e EDI is used by organisations that make a large
r
electronic
commerce number of regular transactions. Examples are the
large supermarket chains and the vehicle
c strategy
technologies
and
assemblers which use EDI for transactions with
their suppliers.
e
applications
5
Internet commerce
e
c Information and communications technologies can
also be used to advertise and make once-off sales
o of a wide range of goods and services.
m This type of e-Commerce is typified by the
commercial use of the Internet. The Internet can,
m for example, be used for the purchase of books that
are then delivered by post or the booking of tickets
e that can be picked up by the clients when they
arrive at the event.
r
electronic
commerce
It is to be noted that the Internet is not the only
c strategy
technologies
and
technology used for this type of service and this is
not the only use of the Internet in e-Commerce.
e
applications
6
The trade cycle
e
c Conducting a commercial transaction involves the
following steps:
o Pre-Sale:
m
• Search - finding a supplier
• Negotiate – agreeing the terms of trade
m Execution:
• Order
e • Delivery
r
electronic
commerce
Settlement:
• Invoice
c strategy
technologies
and
• Payment
e
applications
After-sales, e.g. warrantee and service
7
Generic trade cycles
e
c The trade cycle varies depending on:
The nature of the parties to the transaction
o The frequency of trade exchanges
m The nature of the goods or services being
exchanged.
m Three generic trade cycles can be identified:
e Regular, repeat transactions between
r
electronic commercial trading partners (Repeat)
commerce
Irregular transactions between commercial
c strategy
technologies
and
trading partners (Credit)
Irregular transactions in once-off trading
e
applications relationships (commercial or retail) (Cash)
8
Generic trade cycles
e
c Trade Cycle: Repeat Credit Cash
o Search
Pre-Sale
m Negotiate
m Order
Execution
e Deliver
r Invoice
electronic
commerce
Settlement
c strategy
Payment
technologies
and
e
After Sales After Sale
applications
9
Electronic markets
e
c Emphasis on the search phase of the trade cycle
Typically an inter-organisational credit trade cycle
o Search
Pre-Sale
m Negotiate
Order
EM
m
Execution
Deliver
e
Invoice
Settlement
Payment
r
electronic After Sales After Sale
commerce
Limited applications – airline seat bookings and
c strategy
technologies
and
financial sector – the operation of the electronic
e
market is not necessarily in the vendor’s interests.
applications
10
Electronic Data Interchange
e Used for standardised, repeat, inter-organisational
c transactions
o
Search
Pre-Sale
Negotiate
m Order
Deliver EDI
Execution
m Invoice
Settlement
e
Payment
After Sales After Sale
r
electronic
commerce Notable users of EDI are vehicle assemblers,
c strategy
technologies
and
component supplier’s, and supermarkets (and other
multiple retailers), ordering the goods to restock
e
applications
their shelves.
11
Internet commerce
e
c Used for once-off transactions – consumer or inter-
organisational transactions.
o Search
Pre-Sale
m
Negotiate
Order
m
Execution
Deliver Internet
Invoice
e Payment
Settlement
r
electronic After Sales After Sale
commerce
Can apply to Search, Execution / Settlement and /
c strategy
technologies
and
or After Sales.
Consumers pay at time of ordering – businesses
e
applications
may have credit arrangements with the suppliers.
12
e-Commerce in perspective
e
c e-Commerce is not appropriate to all business
transactions and, within e‑Commerce, there is no
o one technology that can or should be appropriate to
all requirements.
m
m Electronic Markets
e
r
electronic
commerce
EDI Internet
c strategy
technologies
and
Comerce
e
applications
13