Chapter 3: E-Commerce Infrastructure

3.1 Technology Infrastructure for E-Commerce

For e-commerce, a complete technology infrastructure must be in place. These infrastructure
components must be chosen carefully and integrated to be capable of supporting a large volume
of transactions with customers, suppliers, and other business partners worldwide.

Figure Below shows the key technology infrastructure components.

Internet

Network Connection

E-Commerce

Web Server and Application Server

Network Operating System

Web Server Hardware

3.2 Hardware
A Web server hardware platform, with the appropriate software, is a key e-commerce
infrastructure ingredient. The amount of storage capacity and computing power required of the
Web server depends primarily on the software that must run on the server and the volume of e-
commerce transactions that must be processed.
3.3 Server Operating System Software
A server operating system is software that was especially developed to serve as a platform for
running multi-user computer programs, applications that are networked and programs critical to
business computing. This type of operating system (OS) often comes bundled with the most
common types of applications deployed in the client-server model, a term used to indicate the
exchange of information between computers. For example, a hypertext transfer protocol (HTTP)
or web server hosts or "holds" the text files, images files and scripts that work together to form a
website. When someone connects to the Internet and types in a web address, the server that holds
the files of the site delivers or "serves" the requested pages to the client computer or the machine
that made the request.

3.4 Web Server Software

In addition to the Web server operating system, each e-commerce Web site must have Web
server software to perform a number of fundamental services, including:

Security and identification

Retrieving and sending Web pages

Web site tracking

Web site development

Web page construction

Web server is a software that helps a web server process web pages containing server-side scripts
or tags. When such a page is requested from the server, the web server hands the page off to the
application server for processing before sending the page to the browser.

Every Web application whether a shopping site, a portal, an online customer service system, a
wireless site, or anything in between has a key piece of software in common an application
server.
Simply put, application servers are the brains behind a Web site. Any Internet-based application
that generates personalized or dynamic content relies on them. These servers provide a way to
add intelligence to Web sites. They let sites take data entered into a browser and run custom
business logic on that input (looking up customer information in a database, for example). The
application server can then output HTML and send it back through the Web server to the end
user.

The two most popular Web-server software packages are Apache HTTP Server and Microsoft
Internet Information Server. Web page construction software uses Web editors and extensions to
produce Web pages. There are two types of Web pages – static and dynamic. Static Web pages
always contain the same information, while dynamic Web pages contain variable information
and are built to respond to a specific Web site visitor’s request.

Any e-business infrastructure involves multiple applications working across networks to interact
and make e-commerce transactions. Web services promise to make the interaction between
applications smooth, reliable, well integrated and open.

Web services are business process interfaces. Each web service is a point of interaction to either
give inputs/receive outputs from a business process. The web server provides the web service.
They run in the background and wait for clients to connect to them. Basically it frees the
programmer of writing code for the web service to listen to multiple clients. They are URL
addressable and can be invoked by any browser by just typing the path to the web service. Web
services use HTTP protocol to communicate with clients.

3.5 E-Commerce Software

E-commerce software must support the following five core tasks:

Catalog management

Product configuration

Shopping cart
 E-commerce transaction processing

Web traffic data analysis

Catalog management software

Manage a flexible catalog system includes various options for the display of items, while
products can also be imported and exported for batch updates offline.

In an ecommerce website you will use catalog management to fully manage the products in the
website. Based on the type of shopping cart application you have or based on your requirement
the following are some of the features of a catalog management in ecommerce software.

Manage product categories and sub-categories

Add , delete and update products and its specifications

Bulk product upload

Manage product inventory

Manage product images

Manage product price

Mentioned above are some of the key features of catalog management in a shopping cart
application.

Shopping cart

Electronic shopping carts are used by many e-commerce sites to track the items selected for
purchase by the customer. Customers can add items to the cart that they would like to buy, view
what is in their cart, and remove items from the cart that they no longer want to buy.
The shopping carts software allows online shopping customers to accumulate a list of items for
purchase, described metaphorically as "placing items in the shopping cart". Upon checkout, the
software typically calculates a total for the order, including shipping and handling (i.e. postage
and packing) charges and the associated taxes, as applicable.

Web traffic data analysis

Web analytics is the measurement, collection, analysis and reporting of internet data for
purposes of understanding and optimizing web usage.

Web analytics is not just a tool for measuring website traffic but can be used as a tool for
business research and market research. Web analytics applications can also help companies
measure the results of traditional print advertising campaigns. It helps one to estimate how the
traffic to the website changed after the launch of a new advertising campaign. Web analytics
provides data on the number of visitors, page views, etc. to gauge the traffic and popularity
trends which helps doing the market research.

There are two categories of web analytics; off-site and on-site web analytics.

Off-site web analytics refers to web measurement and analysis regardless of whether you own or
maintain a website. It includes the measurement of a website's potential audience (opportunity),
share of voice (visibility), and buzz (comments) that is happening on the Internet as a whole.

On-site web analytics measure a visitor's journey once on your website. This includes its drivers
and conversions; for example, which landing pages encourage people to make a purchase. On-
site web analytics measures the performance of your website in a commercial context. This data
is typically compared against key performance indicators for performance, and used to improve a
web site or marketing campaign's audience response.

3.6 Electronic Payment Systems

Electronic payment systems are a key component of the e-commerce infrastructure. A primary
concern is the need to use identification and encryption techniques to safeguard business
transactions. As a result, digital certificates are used to verify the identity of the sender or Web
site. In order to prevent the theft of credit card numbers and banking information, the Secure
Sockets Layer (SSL) communications protocol is used.

The following table lists the various techniques available for making online payments:

Electronic cash

Smart cards

Credit cards

Debit cards

Charge cards

Electronic cash is an amount of money that is computerized, stored, and used as cash for e-
commerce transactions. A smart card is a credit card–sized device with an embedded microchip
to provide electronic memory and processing capability. We will be discussing EPS in detail in
next chapter.

3.7 Ecommerce Features

Since Ecommerce is an established sector, there are a number of standard functions that
customers expect from an online shop. Ecommerce has existed for over a decade, and in this time
a wide range of innovative web site features have been developed, particularly as competition
among online shops increases. Below are the basic features as well as some of the optional extra
features of E-Commerce.

Product Catalogue

In order to sell something online, customers need to see what you are offering. If the business is
very specialised and offers only a handful of products, then the product catalogue could be as
simple as web page for each. For larger inventories, creating a page for each quickly becomes
unfeasible, so a more sensible solution is to store product information in a database, with a
dynamic product catalogue which retrieves information from the database and generates a page
of details for each item, based on a template. If company has a large inventory, the products
should be categorised and customers should be able to search based on keywords or specific
information like price or size.

Shopping Cart

The standard structure for an online shop is to make use of a virtual shopping cart, trolley, or
basket. When customers choose to buy items, they are added to the cart and stored there while
the customer browses your site. A good Ecommerce system will remember the items in the cart
so that if a customer leaves your site but later return, their items will still be there.

Checkout

Customers complete their purchases by going to a checkout, which is where they will make their
payments and specify delivery options. Some Ecommerce web sites have an extra option to
avoid the cart and checkout, allowing customers to skip straight to delivery and payment options,
which makes impulse purchases easy. If company is only selling a small number of items then a
checkout may not be necessary.

Payments

To sell products online site need some way of accepting payments. Services like eBay‟s PayPal
and Google Checkout make this easy and are ideal for small Ecommerce sites. For larger or more
complex sites, the next step up is using a payment gateway system, where an external website
handles the transactions for you, so you don‟t need your own merchant account. If the
Ecommerce site is very busy, then a dedicated merchant account will minimise the amount you
pay in transaction fees. One may also have a facility for offline payments by cheque or money
order.
Fulfilment and Back Office Systems

When customers make purchases company will then fulfil them, typically by dispatching their
order. How this works will depend on your business and could be as simple as receiving an email
with the order details. This sort of system will not scale well, however, and you may need
additional functionality, for example updating the product catalogue with stock levels after
orders have been made. Ecommerce systems can have an order management interface, enabling
teams of staff to work on order fulfilment. This may also include functions such as generating
invoices and packaging lists and sending dispatch notifications. If company has existing
inventory and ordering system, they could integrate this with the Ecommerce system, though
interfacing between different systems can by complicated and thus expensive.

Extra features

While the basic features will be common to most Ecommerce sites or online shops, there is a
plethora of extra functionality which will make an Ecommerce system easier for organisations to
manage and maintain and enhance the customer’s experience, driving sales.

Enhanced catalogue

There are all sorts of ways to expand on a basic product catalogue, and this can really give
businesses the edge, as the more comprehensive information customers can see, the more
inclined they will be to buy the products. Sites could have a mini photo gallery for each product
with different angles or extra large photos and demonstration videos. Some high-end sites even
include 3D models of items which customers can move and examine. The possibilities for
advanced product catalogue features depend on the products, for example Amazon allows to
browse excerpts of books.
Advanced Inventory

The right Ecommerce solution will also provide inventory features like associating related
products so they can be suggested to customers. As mentioned above, an Ecommerce system can
be integrated with your existing systems and databases, though this can be costly so is probably
only practical if there is a very large inventory.

Recommendations

One of the simplest and most effective ways to increase sales is by recommendation systems. At
the simplest level, this involves showing related items on a product’s page. For example, if an
item requires batteries, offer the customer the appropriate type. Sales records of what previous
customers have bought gives another way of recommending purchases: “customers who bought
this also bought…” For existing customers, one may even be able to suggest items based on what
they have bought from the site in the past, for example a new CD by the same artist.

Sales reports

One key advantage of Ecommerce is that, since purchases and transactions are carried out
electronically, sites can collect detailed information on what is being bought and when, enabling
organisations to plan high-level strategy and procurement policy.

Interactivity

The World Wide Web is an incredible interactive medium, and embracing this will make shop
more attractive to today’s web user. Sites could allow customers to save a list of items as a
wishlist, which is particularly useful for birthdays and Christmas and may drive more customers
to your site. User reviews are another excellent feature to have as customers are more likely to
buy a product if other customers give it a positive review on your website. There is an abundance
of bookmarking, recommendation and social networking web sites, and allowing customers to
share a product by posting it, for example to their Facebook profile, can generate more traffic for
you Ecommerce site.

Search Engine Optimisation

It is critical for almost all Ecommerce websites to appear high up on Google and Yahoo’s search
engines with their products. For a lot of Ecommerce sites this is main source of customers for
their sites. It is definitely worth choosing an provider who has shown good experience in this
area.

Pay Per Click advertising

Using Pay Per Click (PPC) advertising such as Google Adwords or Yahoo Search Marketing are
again a critical marketing channel for Ecommerce sites. This can be easily outsourced, so is less
critical to choose a supplier with excellent PPC skills.

Email marketing

After having established a reasonable volume of customers, it is important to use email

marketing to encourage repeat business. Coming up with seasonal emails and special offers from
the customer base will significantly impact the sales.

Affiliate programmes

An affiliate programme is a form of marketing where organisations pay people (affiliates) who
generate customers for you. The affiliates place advertisements for the site or specific products
on their own websites or email marketing and concerned organisation pay them a commission for
any resulting sales. To make the most out of an affiliate scheme, web site needs graphic buttons
and banners which the affiliates can use, and the Ecommerce system must include appropriate
mechanisms to track which affiliate referred which customer.

CRM

Customer Relationship Management (CRM) refers to the processes and systems by which you
handle contact with your customers. This in itself is big business and a detailed topic, but
Ecommerce systems will usually include a number or CRM features. As a minimum, the system
should allow the staff in all departments to access customers information, so that they can
provide a high level of customer service.
End Chapter Quiz

Q1. A _______________ is software that was especially developed to serve as a

platform for running multi-user computer programs, applications that are networked and
programs critical to business computing.

a. server operating system

b. network operating system

c. both the above

d. none of the above

Q2. ________is a software that helps a web server process web pages containing server-
side scripts or tags.

a. web server

b. server operating system

c. network operating system

d. none of the above

Q3. In order to prevent the theft of credit card numbers and banking information, the
_________________communications protocol is used.

a. TCP/IP

b. HTML

c. XML

d. SSL
Q4. A _____ allows customers to continue browsing after selecting each item they wish to
purchase.

a. Shopping Cart

b. Forms-based interface

c. SSL connection

d. Virtual memory