Technical Paper on E-Commerce free essay sample

TECHNICAL PAPER ON ELECTRONIC COMMERCE ABSTRACT There is no official definition as to what electronic commerce is. Different experts have different definitions. Communication people say that it is the transmission of information, of products/services of payments through telephone lines, network or any other medium. From a businessman standpoint, e-commerce is the use of technology to automate business transactions and work flows. Someone from the service industry might say that e-commerce is a transaction and work flows. Someone from the service industry might say that e-commerce is a helpful innovation that allows business to cut costs, enabling it to provide better quality products with a quicker delivery time. For our purpose and probably the general and literal definition for e-commerce is that it is the actually the buying and selling of goods or services electronically online. Products are displayed on an online store and potential customers can read information about the product, see them on the website and have the option to purchase them online. We will write a custom essay sample on Technical Paper on E-Commerce or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page There are sites selling everything from pets to automobiles. Virtually any product or service can be sold online. All the principles involved in good business practices apply here. Electronic commerce presents a fantastic opportunity for businesses to increase their sales. Online storefronts operate by using a shopping cart. A shopping cart allows visitors select multiple products and collects payment information. Choosing a shopping cart is a critical step in the design of your site. Shopping carts should be matched to the needs of your website. The internet is a new and existing realm that offers businesses the ability to reach millions of customers at very low costs. It also offers businesses the ability to conduct sales through their website 24 hours a day, 365 days a year. Establishing an E-commerce website requires an experienced e-commerce designer. There is a multitude of issues, which must be addressed that require very specific knowledge in programming, security and in the unique nature of internet transactions. Failure to address many issues surrounding the creation of an e-commerce site can result in lost business, damaged credibility of financial losses. When you fill out a form on a website that information travels from your computer to the website’s server computer. A special program which resides then processes that information on the server computer. Generally this information this information is emailed to the owner of the website. Secure ordering occurs when a website or an order form is accessed through a secure server. A secure server is a server computer which has special encryption software installed. Any information you submit is encrypted or coded when transmitted. It is more complicated than that, but further explanation would require extra jargon. At this point the customer has placed their order; however the transaction is still not complete until the merchant receives the information. Many sites ordering systems are secure to this point. However, security problems can arise after the information arrives on the server computer. Many websites claim to have secure ordering while in fact they do not. The information is only secured during the initial transmission from the visitor’s computer to the server computer. After the information arrives at the server computer, man websites simply email the information to whoever processes the orders. Email is not a secure method of transmitting information. With the proper knowledge anyone can access the information as it is transmitted. There are several ways to handle securing the information after it arrives on the server. One of the options is to keep the information on the server. Generally writing the information to an inaccessible or secured section of the server computer does this. The merchant can then retrieve the information. A security risk does arise with this method if the operators of the hosting service act unscrupulously and access the server using their administrative access. INTRODUCTION E-commerce is an exceptionally cost effective way of generating extra revenue. E-commerce removes all geographical boundaries and time differences. With increased demand for retail services, on-line ordering will enable your organization to sell its products and resources over the internet customers can order directly from a secure server, with Visa payments now being accepted in both Newzealand and American currencies. Implementation of a successful e-commerce site first involves establishing some strategies. E-commerce: Enables automated and 24 hour ordering that reduces the cost and the chances of errors. Improves customer service Allows customers to track orders themselves Provides up-to- date price list and product catalogues Greatly reduces the time between ordering and dispatch Reduces supply chain costs. Some of the terminologies used:- Shopping Carts- programs that arrow visitors to select products as they move through a website. When they are finished shopping it gives them a total purchase amount. An ordering process also is also generally present Membership Sites- sites which offer members specific information for the cost of membership Secure Transactions- using â€Å"Encryption or coding† to encode sensitive information to prevent unauthorized viewing Real Time Credit Card Processing- Where the customer finds out immediately if their credit cards was accepted or denied. Standard or ‘Batch’ Credit Card Processing- Where the merchant transmits the customers ordering information and card number to their credit card processor. What e-commerce represents is a way to reach out to customers. E-commerce will allow you to undertake cost-effective business with large number of customers, and with lower value orders. E-commerce can be divided into: E-tailing or â€Å"virtual storefronts† on websites with online catalogs, sometimes gathered into a â€Å"virtual mail†. The gathering and use of demographic data through web contacts Electronic Data Interchange(EDI) , the business –to-business exchange of data E-mail and fax and their use as media for reaching prospects and established customers( for example with newsletters) Business-to- business buying and selling The security of business transactions CONCEPTS OF E-COMMERCE E-tailing or The Virtual storefront and the Virtual mail As a place for direct retailing shopping, with its 24-hour availability, a global reach, the ability to interact and provide custom information and ordering and multimedia prospects, the web is rapidly becoming a multibillion-dollar source of revenue for the world’s businesses. A number of businesses already report considerable success. As early as the middle of 1997, Dell Computers reported orders of a million dollars a day. But early 1999, projected e-commerce revenues for business were in the billions of ollars and the stocks of companies deemed most adept at e-commerce were skyrocketing. Apart from computer and network products, books(Amazon. com), gardening products(garden. com), music on compact disks(CDNow), and office supplies (Supplies Online) were a few of the better-known e-commerce sites. By early 1999, even businesses that have always counted on fa ce-to-face customer interaction were planning e-commerce websites and many businesses were planning how to coordinate in-store and web store retail approaches. Meanwhile, new businesses based entirely on web sales were being invented daily. Market Research In early 1999, it was widely recognized that because of the interactive nature of the internet, companies could gather data about prospects and customers in unprecedented amounts-through site registration, questionnaires and as part of taking orders. The issue of whether data was being collected with the knowledge and permission of market subjects had been raised. (Microsoft referred to its policy of data collection as profiling and a proposed standard has been developed that allows internet users to decide who can have what personal information) Electronic Data Interchange (EDI) EDI is the exchange of business data using an understood data format. It predates today’s Internet. EDI involves data exchange among parties that know each other will and make arrangements for one-to-one (or point-to-point) connection, usually dial-up. E-Mail, Fax, and Internet Telephony E-commerce is also conducted through the more limited electronic forms of communication called e-mail, facsimile or fax and the emerging use of telephone calls over the internet. Most of this is business-to-business, with some companies attempting to use e-mail and fax for unsolicited ads (usually viewed as online junk mail or spam) to consumers and other business prospects. An increasing number of business websites offer e-mail newsletters for subscribers. A new trend is opt-in email which web users voluntarily sign up to receive email, usually sponsored or containing ads, about product categories or other subjects they are interested in. Business –to-business buying and selling Thousands of companies that sell products to other companies have discovered that the web providers not only a 24- hour-a-day showcase for their products but a quick way to reach the right people in a company for more information. The Security of Business Transactions Security includes authenticating business transactions, controlling access to resources such as Web pages for registered or selected users, encrypting communications and in general ensuring the privacy and effectiveness of transactions. Among the most widely used security technologies are SSL and RSA. Secure Electronic Transactions (SET) is an emerging industry standard. *E –* Business â€Å"E –business† ( â€Å" electronic business ,† derived from such terms as â€Å"e-mail† and â€Å"e-commerce†) is the conduct of business on the internet, not only buying and selling but also servicing customers and collaborating with business partners. One of the firsts to use the term was IBM, when in October 1997, it launched a thematic campaign built around the term. Today, major corporations are rethinking their businesses in terms of the Internet and its new culture and capabilities. Companies are using the Web to buy parts and supplies from other companies, to collaborate on sales promotion and to do joint research. Exploiting the convenience availability and worldwide reach of the internet, many companies, such as Amazon. com, the booksellers, have already discovered how to use the internet successfully. Increasingly, much direct selling (or e-tailing) is taking place on the Internet of computer related equipment and software. One of the firsts to report sales in the millions of dollars directly from the web was Dell computer. Travel bookings directly or indirectly as a result of web research are becoming significance. Customer-orderable golf clubs and similar specialties are considered good prospects for the immediate future. With the security built into today’s browsers and with the digital certificates now available for individuals and companies from VeriSign, a certificate issuer, much of the early concern about the security of business transaction on the web has abated and e-business by whatever name is accelerating. IBM also considers the development of intranets and extranets to be part of business. Trade and commerce between individuals is as old as the existence of mankind. There have been innumerable channels that have facilitated this exchange. The latest to join this is e-commerce. The debatable topic now is what extent this new venture will make roads into business operations. In 1997-98 experts predicted the e-commerce trade to be worth $ 200-250 billions and expected figures today are $ 3 trillion of its volume. E-commerce method of doing business differs from traditional commerce because it combines information and technology, telecommunications technology and business process to make it practical to do business in ways that could not be done otherwise. Types of e-commerce E-commerce is divided into three major segments i. e. Inter – organizational Intra – organizational Retail inter-organizational, between different business entities It reduces suppliers and facilitates business partnerships by reducing purchase orders, processing costs and inventory cycle timings. It could be operated on Internet or extranet which just lets us select a few participants. Supply chain management or payment management is examples of inter-organizational application. Intra organizational e-commerce occurs within a business entity. The objective is to link the constituents together and increase the flow of information within the organization. Examples of it include human resource or department websites that disseminate information and services through an intranet. Retail e-commerce, as the name suggests, is directed at the consumer. It can be used for any business for consumer interaction. Technological dimensions of e-commerce While many technologies can fit within the definitions of e-commerce, the most important are electronic data interchange(EDI), bar codes, electronic mails, internet, World Wide Web, product data exchange and electronic forms. Electronic Data Interchange is the computer to computer transfer of structured information in a standard electronic format. Information stored in one computer is translated by software programs into standard EDI format for transmission to one or more trading partners. The trading partner’s computer, in turn, translates the information using software to a form, which they can understand. Bar codes are used for automatic product identification by a computer. They are rectangular type of lines of varying widths and spaces. The most common example of bar codes is consumer products like packaged food, books etc. These codes allow the product to be scanned at the checkout corners. As the product is identified, the price of the product is entered in cash register, while internal systems are automatically updated. Electronic Mails are message composed by individuals and sent to other recipients via Internet. Internet is decentralized network of millions of computers and computer networks. World Wide Web is a collection of documents written and encoded with hypertext marker language. With the aid of a relatively small piece of software, the user can ask for these documents and display them on the users local computer. Product Data Interchange is exchange of data usually in the graphic form that is needed to describe a project. Electronic Forms is a technology that combines the familiarity of paper forms with the power of storing information in digital form. To the user and the electronic form is simply a digital analogue of such a paper form, but appears on a computer screen and is filled out via mouse and keyboard. FUNCTIONS OF E-COMMERCE There are four functions of e-commerce:- Communication Process management Service management Transactional capabilities The communication function is aimed at the delivery of information and /or document to facilitate business transactions. Email is an excellent example of this. The process management function covers the automation and improvement of business process. The best example of this would be networking two computers together so that they can be shared and transfer of data is possible instead of one person taking data from one computer to another. Service management function is the application of technology to improve the quality of services. A good example of this is the Federal Express Website. It permits customers to track shipments and schedule pick-ups 24 hours a day without having to talk to a service representative. Customer services are greatly enhanced due to this site. The last function, transaction capabilities provide the ability to buy and sell on the internet. Amazon. com and REI offer good example. PRE-REQUISITES OF E-COMMERCE There are a very few pre-requisites to conduct e-commerce business. These are: Either your own or provided by a cart A shopping cart programmed to list your products or services and means to collect purchase information. A method to get funds into your bank account. If you want to automate the process, a compatible credit card merchant account and transaction processor (e. g. Authorise. net) to collect the credit card information and obtain authorization and post the funds into your account are required. SIGNIFICANCE OF E-COMMERCE Participants in the electronic market place are not only limited to digital product companies such as publishing, software and information industries. The digital age and digital revolution affect all of us by virtue of their process innovations. The web TV and digital television is going to affect the TV news and entertainment programs. Changes in telecommunications will affect the way we receive information, product announcements or orders etc. as phones, Fax USERS OF E-COMMERCE Anyone with something to sell can use e-commerce. If you access a website where you can store information about the items or products your company offers, you can use e-commerce. There are three kinds of business concerns, which are mainly using e-commerce. The first are new enterprises, which have no existing infrastructure. The other is the technology company which would have an interest in electronic routes to promote their services. The third category is of media companies, which would benefit from fast distribution of information together with low set up costs. Credit cards, cheques or any other mode of payment arrangement can be set up to be used via the internet. You do not have a transaction processor to process the transaction in real time, although real time credit card processing offers the most immediate methods to have funds deposited into your account. These are the e-commerce solution that allow information collection and retrieval from a secure server and then let you enter that information manually at your local terminal. EMPLOYMENT POTENTIAL OF E-COMMERCE According to computer system of a value added network (VAN) of the US government, there are many full and part time positions available in e-commerce with flexible hours. The current requirements but are not limited to: Systems programming(Unix,Win95,Win NT) EDI programmers Communication Engineers (Routers,ISDN,SLIP, PPP,RAS) Communication programmers (C,C++, VB) Technical writers Technical Support Sales and Marketing focus Field Engineering Support. PROS AND CONS OF E-COMMERCE ADVANTAGES Although in its infancy, e commerce is the most popular way for a business to expand their customer base and increase productivity. In recent years the online shopping industry has leaped forward and every business can be found without a website. With an Earth Link Total Commerce Package, you can sell product throughout the world by your web-based store. Here are some of the pros and cons of e-commerce:- The biggest advantage of e-commerce is that distance doesn’t matter in carrying out the trades. You can reach out to the world anytime you want. This helps the companies to have a cheap and effective way of communications with suppliers on one side with customers on the other. Contact with suppliers is possible through internet or via an EDI system. Secondly, unlike a brick and mortar store an online store is open 24 hours a day,7 days a week and 365 days a year. Thirdly, compared with a retail outlet or a new office the cost of setting up of an e-commerce office is very low. Fourthly, there is flexibility in a website to add and remove a product or product than in catalogue. Another advantage of being online is that it potentially gives exposure to previously untapped market segments. Another benefit is error reduction because orders don’t have to be re-keyed into order entry systems increased efficiencies through the automation of business process. Other benefits include wider choice and no wastage of time. People who want to buy products usually have to go out and search a shop. Now the only thing they have to do is turn their computer and select one of the thousands of online stores. Customers can find product from all over the world, so the amount of offers is far greater. DISADVANTAGES OF E-COMMERCE Among the disadvantages of selling online include inability to touch and feel the merchandise. As one analyst puts it, â€Å"kick the tyres†. This is a psychological barrier but as consumers become more familiar with shopping online this barrier will go. Further, a big rush with the growing importance of e-commerce and computer communication technology is that people don’t have social contacts any more. Further, because online stores do not exist for very long, many companies do not know how to set up a store. This results in a large group of annoyed customers, who want to but something but it is not clear how they should and there is no one who they should ask, like in a normal shop. In addition, computer systems will never be 100% safe. There shall be hackers who intercept money transactions and cause problems for consumers and companies. Above all in a developing nation Internet user usually is a young highly educated man. If you start a business then perhaps you might not reach women and elderly. At this time, e-commerce is not good if you want to sell product to a target other than highly educated man. This won’t be a problem in future as more and more people will use computer and the internet. PROSPECTS OF E-COMMERCE Though difficult to predict precisely but it is more likely that it stays here. On the up side all of us believe that e-commerce will increase exponentially in the coming years. An estimated 148 million shoppers were expected to spend an estimated $ 15 million in the cyber market space. According to IDC market estimates cyber sales are set to increase by 20% by the year 2000. The US department report in April 1998 titled â€Å"The Emergent Digital Economy† predicted that e-commerce will account $300 million annually by 2002. Area expected to grow includes financial services, entertainment, travel and groceries. The jackpot returns from e-commerce depend a lot on how the business processes are being leveraged by electronic transformation. On the downside experts say that longer a company waits the more difficult it will be to establish their presence. On the whole in the next few years, experts say that the world and the world of marketing in particular will be entirely transformed by the yet to be realized potential of e-commerce. Lessons derived from the evolution of e-commerce The following is a checklist of a few lessons learnt from the coming of e-commerce: No one that properly embraced ATMs, ant time money credit or debit cards even went back. Customers want expanded hours-24 hours per day are the limit. If it is convenient, people will gravitate to it after experimenting with it. Customers want expanded locations – the closer to home the better – the home is the limit. Customers change the way businessmen does business, technology is merely the facilitator. There is an inevitable trend in its emergence and e-commerce is here to stay. CONCLUSION E-commerce is growing explosively on the internet. Before the end of this decade, millions of companies and individuals will be buying, selling, bidding, brokering, advertising and collaborating on a daily basis, as the Internet merges with other branches of information highway. The resulting economies of scale will drastically lower cost of implementing and maintaining a procurement infrastructure. All said and done those who clearly see the opportunity, understand the medium creatively and completely put it to work for them, will definitely succeed in the digital economy of tomorrow. The e-commerce market may be infant in terms of years of existence, but the time has come for it to mature and develop a rational commerce strategy. Additionally using these methods will allow you to track your orders to the end user to investigate a fraudulent transaction. Real –time processing and delivery- Try to avoid real time processing and product delivery if at all possible. When your product is delivered immediately you lose the ability to check the order for possible fraud. That means a higher likelihood of stolen cards. Matching Addresses- If you receive an order that has different addresses for shipping and billing you should red flag this order. Many times there is nothing wrong with this type of order, but this is also a common way for someone using a stolen card to obtain merchandise. Call the Issuing Bank- This is an excellent way to determine if a card is stolen. When you provide the number to the bank they tell you immediately if the card is valid, stolen, or whatever. Since you don’t have the card in your possession you can call the credit card company- Visa, MasterCard etc. and get the name of the issuing bank. Don’t accept orders from free email addresses- Addresses such as usa. net, yahoo. com, or other free email addresses are perfect ways for an individual to hide their identity. Anyone can sign up for the services and they can give false information when signing up. The majority of fraudulent transactions come from free email address services. Make sure you tell your clients that any information submitted would not be used for any other purposes, nor will it be distributed. Envy- reports – These reports are taken by your form submission program and generally display IP addresses, and other visitor information. This information is very important in tracking orders, which have proven to be fraudulent. Using the IP address you can track the individual to their ISP and from there you can get the persons real address. Generally ISPs will release this information only if you can provide solid evidence that the individual committed fraud. You may also be required to get a court order. Telephone numbers – The best advice one can give is to get phone numbers from all customers and contact each customer regarding their order. One may also recommend telling customers on the order form, that you will be contacting them regarding their order prior to order fulfillment. This will stop many thieves from even placing the order. BIBLIOGRAPHY Employment News- January 2000 Website : http://www. dell. com Website :http://ecommerce. internet. com/ Website : http://www. consumer. net Website: http://www. ecrc. ctc. com/ Why This Fuse About E-Commerce- By Sanjay Kumar Misra E-Commerce (An Overview Of E-Commerce For Students And General Readers) By Bhushan Dewan E-commerce – By Dr. Milind M. Oka