E-Commerce Unit 2

Unit II: Business Models of E-commerce and Infrastructures: E- commerce models; Supply chain
management, Product and service digitization, remote servicing pronouncement; Online marketing and
advertising; E-commerce resources and infrastructures
E-Commerce Infrastructure
Ecommerce infrastructure represents the core framework that makes online sales possible, bringing the
efficiency needed to run your ecommerce system and process orders online. At its heart, this system combines
the hardware, software and tools that allow retailers to sell goods online and track sales from start to end.
Infrastructures are systems needed by a business to operate smoothly. It is a key component of any business,
as it ensures growth and sustainability.
This could be software such as operating systems, applications, and security tools, as well as hardware, such as
servers, routers, etc.It also includes the people, procedures, and guidelines that support the infrastructure.
Ecommerce infrastructures are hardware and software components required to operate and maintain an
online store.
They are the foundation upon which ecommerce businesses are built, empowering businesses to sell their
products and services over the internet.
They include the hardware, software, and services needed to manage online transactions and process orders.
Components of an Ecommerce Infrastructure
Below are some infrastructures all ecommerce businesses should have:
 Web Servers
A web server is a hardware or software that stores data and communicates it to users through HTTP (Hyper
Text Transfer Protocol) request. It is in charge of hosting websites, handling visitor requests, and supplying web
page content. Web servers use scripting languages like PHP, ASP, and JavaScript to generate dynamic web
pages. A web server in ecommerce is a computer that stores and serves web pages to users over the internet.
They allow customers to access product information, view prices, and purchase goods.
 Database Servers
A database server is a computer system that stores, manages, and retrieves data from a database. It is the
backbone of an ecommerce system, as it hosts the databases used for online transactions and stores customer
information. It is also in charge of effectively managing the data's organization and security. Database servers
also provide expansion, ensuring websites can handle large amounts of data.
 Payment Processing System
A payment processing system is a system used to process financial transactions in an ecommerce system. It lets
merchants receive payments from customers, securely process the payments, and transfer the funds to the
merchant’s bank account. This system is also part of the ecommerce functionality responsible for confirming
clients’ identities and providing a secure platform for consumers to make their purchases.
This handles payments from different sources, such as debit and credit cards, PayPal, Apple Pay, and Google
Pay.
 Content Delivery Network (CDN)
A content delivery network (CDN) is a network of servers spread out across different locations. It provides
online content to users based on their geographic location. CDNs are used to improve website performance
and deliver a better user experience. In ecommerce, CDNs are used to provide online content such as product
photos, videos, and other information to customers faster.
 Security and Fraud Prevention
Protecting ecommerce websites from cyber-attacks and fraudulent activities is important. To protect
customers, use fraud protection technologies like SEON, Signifyd, Kount, Cybersource, and more.
For the safety and security of customers and their data, ecommerce security and fraud prevention are crucial.
 Load Balancing
This is a process for distributing incoming traffic and requests across a group of servers. It helps to improve the
performance of an ecommerce system. This gives no room for failure in the system and ensures the system can
handle the increased demand from online shoppers.
It also helps to prevent any server from becoming overloaded with requests and also helps to improve
customers' shopping experience.
 Backup System
This is a system that stores data, such as customer information, routinely. It helps restore the system to the last
saved state in the event of a system failure.
This ensures that the business can quickly and easily recover from any potential data loss. Backup systems can
also be used to transfer data from one system to another, allowing for greater flexibility.
 Customer Service
Customer service in ecommerce is providing support to customers before, during, and after a purchase. This
helps customers find what they need, provides shipping and delivery info, and also resolves order issues. This
is critical for any ecommerce business.
 Inventory Management
This is the practice of tracking and controlling the inventory of a business’ product. It includes maintaining
stock levels, ordering new products, and tracking sales. It is important to keep accurate records of inventory to
ensure customer satisfaction and product availability.
Inventory management helps protects against loss due to theft or damage and can help identify areas of
opportunity to improve efficiency.
 Shopping Cart
This is more of an ecommerce feature than a component of an infrastructure. It allows customers to add
products to their carts, views their orders, and check out. It is an essential part of any online shopping
experience, as it enables customers to quickly and easily purchase products.
Item selection, item quantity adjustments, payment selection, and order submission are common features of
cart functionality. This can easily be integrated with the help of ecommerce solutions like Medusa.
 Shipping and Fulfillment
In ecommerce, shipping and fulfillment refer to the process of receiving, processing, and shipping orders to
customers. It also includes shipping tracking and order fulfillment.
Shipping and fulfillment are vital for any online business to be successful. This makes sure customers get their
orders quickly and are happy with them.

Advantages of a Good Ecommerce Infrastructure

 Enhanced User Experience
A good e-commerce infrastructure greatly enhances the experience by offering effective, efficient, and user-
friendly online shopping. The quick page loading, catchy design, and optimized checkouts also lead to higher
customer satisfaction and, subsequently retention. For example, 53% of mobile users will exit a site if it takes
three or more seconds to load. Through efficiency in performance and effectiveness of users’ engagement, the
rate of abandoning services is prevented and overall client satisfaction is improved.
 Seamless Integration
A strong e-commerce framework gives integration with many different tools and platforms like payment
terminals, stock control, and customer relationship management systems. This integration makes functions of
an organization run smoothly and free from data entry errors hence increasing efficiency. This integration helps
to make all the components of an organization operate in unison to enhance business activities and data
management.
 Cost Efficiency
Integration and adoption of a sustainable e-commerce system benefit a company because most of the
activities are automated thus reducing costs. Minimum operating costs arise from the efficient and optimized
management of inventories, the processing of orders, and other related activities. Organizations that adopt
automation and advanced technology get as much as a 22% discount on overall operations costs. Effective cost
control can help e-commerce companies achieve better results and direct resources to more productive uses.
 Competitive Advantage
A correctly implemented and optimized structural plan is a crucial tool that gives a definite advantage due to
better performance, dependability, and capabilities vis-a-vis competitors. An online store should integrate
accurate technology features and provide the best user experience that makes your store unique. Thus, 51% of
customers state that a positive experience during online shopping affects their choice in favor of a particular
brand. Advanced infrastructures can make businesses such as the linen attractive to many customers hence
creating more market shares against the competitors.
 Improved Security
Web security is an issue of immense importance in e-commerce and having a good foundation guarantees data
protection from hackers. Applying more secure features, including encryption and an efficient mechanism for
detecting fraud, ensures customer data and their transactions’ security. The overall approach denotes that
managing risks is critical to a business and its customers, and investing in integrated security solutions is the
solution.
 Scalability
Scalability is a crucial advantage of a well-implemented e-commerce infrastructure, enabling businesses to
grow and adapt to increasing demand without compromising performance. A scalable infrastructure supports
expanding product catalogs, increased traffic, and higher transaction volumes efficiently. Choosing an
infrastructure that scales with your business, ensures long-term sustainability and success.

Challenges of E-commerce Infrastructure

Establishing and sustaining a strong e-commerce platform requires overcoming several obstacles that could
affect company performance and regulatory standards. Here’s a detailed overview of the key challenges:
 Performance and Speed
Another major area of concern for e-commerce infrastructure concerns efficiency and speed. Consumers hate
pages that take a long time to load because it affects the experience and the conversion rate. 40% of
consumers who have issues with page load speed are likely to abandon it in the future. This highlights the
need to constantly improve the performance of hosted websites and improve the hosting services that can
boost speed rankings among others.
 Regulatory Compliance
Another major issue that e-commercial firms face is regulatory compliance. Some of the common limitations
that businesses have to abide by include the data protection laws and various payment security standards
which are crucial in ensuring customer information is well protected to avert legal threats. Online stores should
continue to evolve, monitor new laws, establish mechanisms to control these, and properly address multiple
laws within the various jurisdictions. This sometimes entails extensive capital expenditure to incorporate
technologies and mechanisms to address this concern.
 Integration Difficulties
Various sub-systems integration under the e-commerce framework like payment gateway, inventory control,
and customer relation management system (CRM) integration poses another difficulty. Integration issues may
stem from system compatibility that may cause delays and possibly inaccurate data. Organizations require
more time to address the selection and integration of the technological components and guarantee the
compatibility and efficiency of the procedures.
 Globalization Challenges
These challenges include multiple space currencies, a multilingual environment, and local legal requirements.
In operational and global expansion, 55% of e-commerce firms report struggle in cross-border payment
processing and compliance with local taxes. Solving all these issues requires the adoption and deployment of
sections like multi-currency functionality, localization, and compliance with different area legislation.
 System Downtime
The problem of system downtime which means periods of the e-commerce site’s unavailability to users is
another challenge. This includes clients losing their ability to use the server over technical hitches, server
crashes, or even cyber-attacks, thereby translating to loss of sales and customers’ trust. Thus, providing
professional hosting services is necessary, as working on backup and restoration procedures, and performing
routine maintenance and assessment. Availability, reliability, and fast response to failures are critical success
factors that keep the service operational and customers satisfied.

Factors to Consider When Choosing a Platform

Choosing an appropriate platform is one of the most important decisions that may affect the success of your
Internet-based enterprise. Here are key factors to consider when choosing a platform for your e-commerce
infrastructure:
Business Size and Growth Potential
One of the critical factors businesses should consider when selecting an e-commerce system is the present size
of the industry and the expected future expansion. It may be well suited to small businesses or start-ups where
the platform has the added advantages of being simple, quick to set up, and at minimal cost. On the other
hand, the growing businesses or businesses expecting a high traffic inflow need a more effective platform that
can easily manage the high traffic, extensive categories of products, and complicated procedures. Being
informed that the forum has to be adaptable to the company’s growth and not need to be changed much as
the company expands is vital.
Customization and Flexibility
Scalability is an important feature that helps to enhance the website according to one’s business requirements,
specific objectives, and goals. A platform must provide the ability to set and adjust important parameters to
create a colorful and attractive buying experience that corresponds to the image of a certain brand. Another
criterion is the relative flexibility of functionality and given features – this will allow you to expand functionality
and meet changing business needs and trends. Search for incredible solutions that offer a variety of plugins,
extensions, and other templates to address your needs and preferences.
Budget
Business budgets are essential in an e-commerce platform selection due to the cost constraints involved. A
platform’s cost can greatly depend on its specific services, growth capability, and customer service. It is also
necessary to pay attention to the prices that are direct, such as subscription costs, transaction prices, and extra
expenses for options and changes. A clear understanding of a budget will enable you to go for a platform that
will help you to offer value for your money besides meeting your business needs.
Technical Expertise
Another important consideration is the technical skills needed to operate and maintain the e-commerce side
of things. There are peculiar platforms that are easy to set up and use and do not need professional IT
personnel to perform the setup and often these are best suited for small firms. Others may provide more
features and flexibility of configurations than others but may need more technical understanding to implement
and maintain. Evaluate your skill level and your team’s skill level and select a platform are familiar with or the
forum that provides support and resources for improvement.
Integration Capabilities
Integration capabilities are essential for ensuring that your e-commerce platform works seamlessly with other
systems and tools you use. Look for platforms that offer robust integration options with payment gateways,
inventory management systems, customer relationship management (CRM) tools, and other essential
applications. Effective integration can streamline operations, improve data accuracy, and enhance efficiency.
Ensure that the platform supports the integrations you need or offers flexible APIs to connect with third-party
services and applications.
Supply chain management
Supply chain management (SCM) is the monitoring and optimization of the production and distribution of
a company’s products and services. It seeks to improve and make more efficient all processes involved in
turning raw materials and components into final products and getting them to the ultimate customer. Effective
SCM can help streamline a company's activities to eliminate waste, maximize customer value, and gain a
competitive advantage in the marketplace.
At the most fundamental level, supply chain management (SCM) is management of the flow of goods, data,
and finances related to a product or service, from the procurement of raw materials to the delivery of the
product at its final destination.
Although many people equate the supply chain with logistics, logistics is actually just one component of the
supply chain. Today’s digitally based SCM systems include material handling and software for all parties
involved in product or service crea on, order fulfillment, and informa on tracking―such as suppliers,
manufacturers, wholesalers, transportation and logistics providers, and retailers.
Supply chain activities span procurement, product lifecycle management, supply chain planning (including
inventory planning and the maintenance of enterprise assets and production lines), logistics (including
transportation and fleet management), and order management. SCM can also extend to the activities around
global trade, such as the management of global suppliers and multinational production processes.
Supply chain management consists of several main components, including:
Planning
Planning involves forecasting demand, arranging production and managing inventory levels to ensure that the
right products are ready to meet customer demand. It also involves setting an overall SCM strategy by
determining metrics to measure whether the supply chain is efficient, effective and meets company goals. And
it includes adapting to new product needs.
Sourcing
Sourcing involves identifying which providers to work with, negotiating contracts and managing supplier
relationships to ensure a reliable supply of raw materials and components. The work includes ordering,
receiving, managing inventory and authorizing supplier payments.
Manufacturing
Manufacturing involves organizing the supply chain operations required to accept raw materials, design and
produce the product, and handle quality control.
Delivery
Delivery involves the transportation and distribution of finished products to meet customer needs. It includes
managing distribution centers, warehousing, order fulfillment and logistics.
Returns
Handling returns involves creating a network or process to take back defective, excess or end-of-lifecycle
products. It includes managing reverse logistics and customer satisfaction, in addition to final product disposal.
Common approaches to supply chain management
There are several strategic approaches to SCM. Companies can pursue different strategies based on their
needs, budgets, capabilities and long-term goals and priorities.
Lean supply chain management
This approach focuses on eliminating waste in all forms, including excess inventory, unnecessary transportation
and inefficient processes. The goal is to create a streamlined, cost-effective supply chain.
Agile supply chain management
This approach emphasizes quick response to changes in customer demand and market conditions. It often
involves practices such as quick batch production, rapid replenishment and flexible supplier contracts.
Six Sigma
This approach is data-driven and aims to eliminate defects and reduce variability in supply chain processes. It
uses statistical methods to identify and remove the causes of errors and minimize variability in manufacturing
and business processes.
Total quality management (TQM)
This approach focuses on improving quality throughout the supply chain, with the goal of increasing customer
satisfaction. It involves continuous improvement efforts and often includes practices such as supplier quality
management and process standardization.
Resilient supply chain management
This approach focuses on building a supply chain that can withstand disruptions and adapt to changing
conditions. It focuses on identifying potential risks in the supply chain and developing strategies to mitigate
them. These strategies might include diversifying suppliers, creating contingency plans and investing in supply
chain visibility tools.
Green supply chain management
This approach focuses on minimizing the environmental impact of the supply chain and promoting social
responsibility. It can involve practices such as sustainable procurement and participation in the circular
economy.
Digital supply chain management
This approach uses technologies such as artificial intelligence (AI), machine learning (ML), Internet of
Things (IoT) and advanced analytics to enhance various aspects of supply chain management, including
demand forecasting, inventory management and logistics.
Supply chain management technology
The integration of new technologies is transforming the way that businesses manage their supply chains.
Artificial intelligence (AI) and machine learning (ML)
AI and ML revolutionized demand forecasting, allowing companies to predict sales with greater accuracy and
adjust their production, inventory levels and pricing strategies accordingly. AI-powered chatbots and virtual
assistants streamline interactions for improved customer experience. ML algorithms analyze collected data
across the supply chain to identify bottlenecks, optimize routes and improve overall visibility.
Internet of Things (IoT)
IoT devices, such as sensors and radio-frequency identification (RFID) tags, collect real-time data on inventory
levels, shipment tracking and asset performance. IoT-enabled smart warehouses are also becoming more
common; they offer automated storage and retrieval systems, robotic picking and drones for inventory
management.
Industry 4.0
IoT is also integral to the rise of Industry 4.0, a term used to refer to the digital transformation of
manufacturing. Industry 4.0 incorporates new technologies such as digital-physical systems, augmented reality,
cloud computing and advanced data analysis. Robotics and 3D printing streamline production and warehousing
processes, reducing lead times and costs. Industry 4.0 capabilities allow for faster decision making, automation
and customization at new levels.
Blockchain
Blockchain technology is enhancing supply chain transparency, traceability and security. By creating an
immutable, decentralized ledger of transactions, the blockchain can help prevent counterfeiting, improve
product safety and streamline compliance processes.
Innovative developments
Technologies such as 5G allow faster, more reliable data transmission, supporting the deployment of more
advanced IoT devices and real-time monitoring systems. And autonomous vehicles, such as self-driving trucks
and drones, will become more prevalent, reducing transportation costs and improving delivery times. Although
still in early stages, quantum computing is shaping the future of SCM by solving complex problems and
enabling more accurate simulations and scenario planning.
How does the e-commerce supply chain work?
Before you can understand the different strategies of e-commerce supply chain management, you must first
grasp the basics of how a supply chain works.
As mentioned, supply chain management for e-commerce focuses on the overall flow of products, resources
and information between different tiers of suppliers and buyers. This flow, also known as the e-commerce
logistics process, consists of five key stages and actors.
1. Supplier
The supplier procures the raw materials needed to create the products, and delivers them to a factory or
manufacturing plant for assembly. In some cases, the products themselves may be assembled already, and
have no need for further fabrication processes.
Either way, these materials or products that are brought into the business are called inbound goods, and they
will soon head towards the e-commerce warehouse.
2. Warehouse
As the second step of the e-commerce logistics process, the warehouse is where inventory is stored and
managed until the time comes for them to reach their new owners: your customers!
Keeping track of inventory plays a significant role at this stage of the supply chain. Inventory management
software can be used to enhance visibility into your stock in the warehouse, such as how much goods you
have, where they’re located, and when to re-stock.
3. Fulfillment center
Once a purchase has been made on your e-commerce store, congratulations! The products purchased then
move from the warehouse to the fulfilment centre, one step down the line of your supply chain, closer to your
hopeful customers.
A fulfilment centre is where your goods are packaged and shipped, though in some cases the warehouse can
serve as a fulfilment centre as well.
4. Carrier
The carrier in the form of a courier service such as FedEx, DHL or UPS then takes your package for delivery to
the final destination.
While you can handle e-commerce packaging internally, these courier services usually offer different packaging
options you can choose from to keep your products safe and secure throughout the journey of e-commerce
transit to your customers.
5. Customer
Customers are the last actor involved in the e-commerce supply chain.
Under normal circumstances, customers receive your products, enjoy them, and both of you end up satisfied.
However, you must still prepare for the possibility that purchasers will return your products for whatever
reason (defects, issues, and sometimes even e-commerce fraud).
Reverse logistics — the process by which the purchased goods are returned to the seller — is therefore
something that should be taken into account as well.
Product and service digitization
Product digitization is the process of converting physical products and their associated information into digital
formats. It involves capturing, storing, and managing data about a product’s design, production, distribution,
and lifecycle using digital technologies.
This digital representation of a product can include details such as specifications, materials, manufacturing
processes, and even environmental impact data.
Product digitization enables businesses to gain real-time insights into their products, facilitate supply chain
operations, enhance quality control, and improve customer experiences. It is a fundamental component of
modern business strategies, offering increased transparency, efficiency, and adaptability in an increasingly
digital world.
Product digitization is crucial for businesses because it enables them to adapt to the digital age.
Firstly, it enhances operational efficiency by streamlining supply chain processes and reducing manual tasks.
Secondly, it improves customer satisfaction and loyalty by providing real-time data and personalization
options.
Lastly, it facilitates data-driven decision-making, enabling companies to stay competitive, innovate, and
respond to market changes swiftly.
What is product traceability
Product traceability is a systematic process of tracking and documenting the journey of a product from its
origin through various stages of production, distribution, and consumption.
It involves implementing product traceability software and creating a detailed record of the product’s history,
including information about its source, manufacturing processes, transportation, and storage conditions.
Product traceability systems use unique identifiers like serial numbers or barcodes to facilitate tracking and
allow for the retrieval of crucial information in case of recalls, quality issues, or safety concerns.
This practice is essential in industries like food, pharmaceuticals, textiles, and manufacturing to ensure
product safety, compliance with regulations, and prompt response to emergencies.
How to do product traceability
To implement product traceability software effectively, follow these steps:
1. Data Collection: Collect comprehensive data about your products, including their origin, components,
production processes, and relevant dates. Ensure each product is assigned a unique identifier, such as a
serial number or barcode.
2. Record Keeping: Establish a centralized database or traceability system to store this information
digitally. The system should be capable of capturing and updating data at various points along the
supply chain.
3. Documentation: Create detailed records for each product, including information about suppliers,
manufacturing, quality control, and distribution. Maintain records of any changes or updates made
during the product’s journey.
4. Tracking and Monitoring: Implement tools and technologies, such as RFID tags or QR codes, to track
products moving through the supply chain. Monitor their progress in real time and record any
deviations or incidents.
5. Reporting and Recall: In the event of recalls, safety concerns, or quality issues, use your traceability
system to identify affected products and their locations quickly. Communicate transparently with
stakeholders and regulatory authorities to take necessary action.
Following these steps, you can establish a robust product traceability system that enhances transparency,
quality control, and compliance while ensuring consumer safety and trust.
What is the connection between product digitization and product traceability
Product digitization closely relates to product traceability in several key ways:
 Data Tracking: Product digitization and traceability involve collecting and tracking data related to a
product’s journey, manufacturing processes, and components. Digital records play a crucial role in
providing traceability information. Implementing traceability software is critical to enabling efficient
and reliable data repositories.
 Enhanced Transparency: Digitization enables businesses to provide consumers and stakeholders with
transparent information about a product’s origin, ingredients, and quality. This transparency is a
fundamental aspect of traceability.
  Supply Chain Visibility: Product digitization enhances supply chain visibility by capturing real-time data
on the movement of goods. This visibility is essential for traceability, as it allows for the identification of
sources of contamination or quality issues.
 Quality Control: Both concepts emphasize the importance of maintaining product quality. Digitized
product data can be used to monitor and control quality throughout the production process, which is
essential for traceability in case of product recalls or safety concerns.
 Compliance and Reporting: Digital records generated through product digitization are valuable for
demonstrating compliance with regulations and industry standards. This compliance information is a
critical component of traceability efforts.
 Environmental Impact Tracking: Product digitization often includes data on a product’s environmental
impact, which is increasingly essential for traceability efforts related to sustainability and responsible
production.
In essence, product digitization serves as a foundational element for effective traceability. It provides the data
and tools necessary to trace a product’s history, quality, and compliance throughout its lifecycle, benefiting
both businesses and consumers.
Digitalization is not just about connecting a physical good to a digital asset, but that is part of the picture.
Different companies may vary in how they implement digitalization, such as the physical tools they use and the
choice to integrate blockchain into the process.
But there are essential steps to digitizing products.
1. Identifying your goals for product digitalization
When identifying goals for digitalization, look beyond supply chain managers. Consider your entire operation
and discuss digitalization with different departments. What types of data insights do marketing, category, and
brand managers need? How can digitalization help with gathering these data or deploying strategies relevant
to these insights?
For example, category managers might be dealing with a surge of counterfeits that ruin their brand reputation.
Digitalization can help sellers and consumers identify authentic products by scanning a non-reproducible QR
code.
A multinational convenience store chain might not know who is buying their prepared meals. They can
integrate digitalization into their existing app. Users of the store’s app can scan the packaging of the ready
meals to pay online or score points. Because the users are registered on the app, this simple scanning gives
marketing managers insights into the types of consumers who are buying their prepared meals in different
countries.
2. Physical aspect
The first step is determining the most suitable way to place a digital asset on your physical product. The most
obvious answer might be the product packaging, as it offers printable space visible to people working along the
supply chain and end consumers.
If it isn’t practical or feasible to print directly on the package, the next solution would be to use printed labels
or product tags.
3. Embedding
The next step is to add a tamper-proof physical unique identifier on the physical aspect. This usually comes in a
barcode, a QR code, a complex sequence of numbers, or a sensor tag — or a combination of two or more of
these.
The critical step here is to make sure that the digital ID is not easily replicable so that you can avoid
counterfeits and fraud. One way to do this is through 3D-printed, readable sensor tags.
4. Enabling
To do this, you need to register and activate the tamper-proof physical unique identifier digitally. The digital ID
should then be connected with the appropriate digital asset by entering it into a database or blockchain. This
transforms the physical good into digital data. A shampoo bottle is no longer just a bottle of shampoo; it is a
digital record in your system.
Cloud registration creates a record of the identifier and associates it with all the data that belongs to it. On the
other hand, registration in a blockchain creates an immutable digital twin. The identifier effectively “lives” in a
blockchain and can no longer be modified.
5. Making use of the data
A company may have massive amounts of data but still fail to improve its operations, customer service, and
bottom line. That’s why the digitalization process is incomplete without data analysis.
To thrive and compete in the era of Industry 4.0, businesses need to track, monitor, and analyze product-
related data to optimize supply chain management and improve the customer experience. That means a
digitalized supply chain must also come with business intelligence capabilities.
The types of metrics that your business intelligence tool reports would depend on each depar
The types of metrics that your business intelligence tool reports would depend on each department and its
goals.
For example, you can track:
 Length of time between order placement and delivery
 Number of goods delivered in a day
 Damage rate (and where, within the supply chain, the damage occurred)
 Product freshness (for perishable goods)
  Product return rate in each location
 Number and location of users that scan the product code
 Actions taken by users on a customized app after scanning the product code
One major challenge in digitalization is achieving buy-in from the relevant stakeholders. And once you have
their cooperation, you’ll need to deploy your system and enforce your standards across the supply chain. This
can involve plenty of subsidiaries and third parties in different countries across two or more continents.
As a result, the digitalization process takes a long time to implement. Even the relatively simple task of printing
QR codes on product packages or printing and sticking QR code labels can take three to four months to
process. You’ll need to coordinate with the packaging supplier, printer, and QR code maker, not to mention
supply chain and inventory managers, and data engineers.
Once you complete the planning and deployment phases, you will have in place a system that you can use for
many years to come. Digitalization, after all, is a long-term play.
Do you have a plan for maintenance and measurement?
To make the most out of this system, implement clear maintenance protocols and regularly update the system
in line with technological developments in your industry. Get feedback from different departments—
manufacturing, packaging, distribution, marketing, and other relevant teams—to discover gaps between the
system’s intended usage and its practical application.
The effectiveness of the system is not limited to its practicality, of course. Go back to your goals for
digitalization (see step 1) and see whether you are achieving them. These goals will also guide you in
measuring the return on investment of digitalization.
For example, if your goal is to protect your brand from counterfeits, has digitalization helped you achieve this?
Have sales of counterfeits dropped, complaints from duped customers lessened, and your brand reputation
strengthened? Do customers actually scan the tag or code on your product to verify its authenticity? Keep in
mind that specific goals are the first step towards understanding your investment returns.
After adding IoT sensors to its compressed air systems, manufacturer Kaeser Kompressoren captured
environmental and performance data and used predictive analytics to avoid unexpected outages. This helped
reduce unplanned equipment downtimes by 60 percent and contributed to annual savings of around $10
million in break-fix costs.
The future is digitalization
Digitalization expands the capabilities and lives of physical products by giving them a digital identity. Long after
a pack of juice is consumed, its data lives on to contribute insights to companies. Weeks after being harvested
and shipped out across dozens of cities, heads of lettuce can help you trace E.coli outbreaks and prevent the
spread of infection.
Implementation is complex, but enterprises need to see digitalization as a global strategy. Return on
investment must be measured in the medium and long terms. After all, businesses that keep up with
technological innovations know that digitalization is inevitable. It’s now a matter of adopting it strategically
and successfully.
Remote Servicing
Remote service in the standard context refers to a technician using software/hardware to access a client’s
devices offsite, in order to provide maintenance and support. These services could include installing updates,
security patches or troubleshooting other issues.
An example of where this type of service is employed in the factory context, is when software from the ERP
and MES systems are upgraded remotely. Utilizing remote access and services for standard IT related queries is
fairly commonplace. All an offsite technician needs, in order to perform remote service is an internet
connection, and remote access software installed on both the technician’s device and the client’s device.

Remote Service in the IoT context

The IoT context consists of many interconnected devices and systems producing data, and this data being sent
to the cloud for analysis. IoT platforms are synonymous with big data and real-time insights.
A key issue in the IoT factory context is security, since large amounts of data about processes and operations
are being generated and transmitted by the sensors, actuators and other interconnected devices. Data
breaches are costly and have the potential to disrupt the whole system since they can damage actual
machinery as well. Additionally, IoT platforms often analyze customer behavior and patterns, and this data if
leaked can result in a loss of profits for the business at hand. Consequently, integrated remote access, service
and monitoring enables technology providers to not only secure data transmission but also to receive real-time
notification about data breaches as they occur and quickly address the situation.
Remote service and monitoring in the IoT context is not only associated with data security but also predictive
maintenance and control of machines/operations on the factory floor. For example, using a smartphone or PC,
support engineers that are not onsite can respond to alerts that have been generated to control valves,
switches and machine settings remotely.
Furthermore, there are two types of remote service support options available. The first occurs after a fault is
noted and the remote service technician is contacted and resolves the issue remotely. The second is more
active and occurs through the integrated active monitoring of the system, via IoT platforms and as soon as an
issue is detected, it is resolved immediately remotely.
The idea of remote service fits in well with Industry 4.0 objectives since it promotes the use of integrated
technology in real-time, in order to perform traditional maintenance operations. These operations in the past
would have been performed by technicians via an onsite visit, and only after the fault occurred.
One key consideration to keep in mind is that there is still a need for a robust industrial cloud that can store
the data generated by the factory and that remote service support engineers can access for real-time
monitoring or analysis of operations.

The Key Benefits of Remote Service

Ease of Accessibility
One of the key benefits of remote service support is that factories situated in remote, difficult to reach
locations can still access advanced level support for their systems/machines/PCs.
No travelling Expenses
The overall cost of remote services is less because travelling expenses are not incurred. Diagnostic analysis of a
problem and the resolution can take place remotely, which would have in the past, involved multiple site visits.
Immediate Access
Another benefit of remote services is immediate access and availability. The maintenance operations are not
limited to the working day since a technician from another part of the world in another time zone can address
an issue.
Increased Safety
In terms of plants and factories, it may sometimes be difficult or dangerous for a support engineer to access a
certain machine. If this machine needs maintenance and/or repairs and is connected to an IoT platform, then
the support engineer does not have to go directly to the machine, instead they can manipulate the machine
from their HMI / smart phone. This contributes to increased safety onsite.
Access to a large skill set
The remote access service allows factory owners to access a large skill set. For example, if a machine operator
cannot solve a problem with a machine on the factory floor, they can use the remote service option to access
or collaborate with an expert who can.
Multiple devices can be managed from a remote location
Remote services in the IoT context allows multiple devices to be managed, configured and/or upgraded
simultaneously. If a technician had to visit the site and individually install upgrades on each machine, this
would result in costly time delays.
The Industries That Are Using It
Many industries have utilized some form of standard remote service maintenance for their PCs/networks. In
terms of the manufacturing industry – companies in the power and water sectors are using remote service and
access in order to repair machinery that is situated in difficult to reach places.

What Does It Take to Implement?

A factory owner wanting to implement remote services for a “smart” factory should firstly consider all the
machines, sensors, HMIs, PCs and systems in the factory that they want to be monitored and remotely
managed. Also, this factory owner should consider the level of remote management that they would like to
implement. For example, do they just want troubleshooting, or do they want to monitor all the machinery, and
systems on the factory floor proactively and remotely. Once the factory owner has decided on the level of
remote management they require, they should consult with a technology provider. Additionally, they should
take note of older machinery that may need to be outfitted with additional sensors or software in order to be
part of the IoT platform and benefit from the real-time remote service options.
Furthermore, the remote service should work across platforms and use open standards so that Windows
devices, Linux devices, other operating systems and embedded systems in the factory can be remotely
managed/repaired.
As more and more devices are connected to IoT platforms, there will be an increased need for remote service
options. Since factory owners may not always have the resources or needed skills onsite to deal with
maintenance or repair issues. In addition, either the machines or the factories themselves maybe situated in
hard to reach places in which case remote services are critical. Factory owners are advised to integrate remote
service options into their existing IoT platforms in order to prevent costly down-time and secure their data
proactively.
Disadvantages of Remote Access
1) Security Issues
While there are many advantages to remote access, there are some disadvantages that must be considered as
well, the biggest of which is potential security issues. Although remote working is safer than ever before, there
are still plenty of risks that need to be addressed. According to GDPR legislation, any personally identifiable
information must be stored in a secure, limited area.
For maximum security, every device that connects to the network needs to be protected and updated with
firewalls and anti-virus software. This includes laptops, computers, mobile phones, and tablets. Every person
on the team must also be vigilant with their passwords, creating difficult passwords that can’t be easily hacked.
A single weakness in your system can make the entire network vulnerable.
2) Version Problems and Data Liabilities
Your staff can potentially cause issues with no malicious intent when using remote access service. One
common problem we see with businesses newly adjusting to shared files on a network is version control –
some people might have different versions of an important document, with critical variations on the different
versions.
Another problem is the risk of team members storing data on their own devices, which can sometimes violate
company policies. To avoid having issues like these, your staff needs to be educated on proper etiquette when
dealing with shared files on the network.
3) Hardware Issues Still Need On-Site Work
For businesses that choose to use remote desktop connection software – where your home computer acts as a
remote control for your office computer – you can run into the frustrating issue of sudden and unexpected
hardware issues on your office computer.
If the office computer freezes up and requires a hard restart, it might be completely impossible to fix this issue
remotely. Certain hardware issues will always require on-site solutions, meaning you should always have a Plan
B to work around remote desktop connection limitations.
4) Difficulties with Work Culture
Businesses that are new to having a remote team – whether a team that is entirely remote or just partially
remote – often struggle with the issue of evolving their work culture to accommodate staff who are not
physically present in the office.
When setting up your remote access network, you need to think about whether your system of
communication will keep your remote team members plugged in, connected, and totally informed. Help your
team learn how to distribute and share information without having everyone in the same room. Lines of
communication need to be redrawn; people need to know who is responsible for sharing what.
5) Complex Software and Hardware: Why You Need Abacus
Setting up a remote access service is never easy, especially without IT specialists on your team. There are
countless hardware and software choices to consider, and knowing the differences between all available
options is the best way to tailor a remote access setup plan for your business.
Online marketing and advertising
Online advertising, also known as online marketing, Internet advertising, digital advertising or web
advertising, is a form of marketing and advertising that uses the Internet to promote products and services to
audiences and platform users.[1] Online advertising includes email marketing, search engine
marketing (SEM), social media marketing, many types of display advertising (including web
banner advertising), and mobile advertising. Advertisements are increasingly being delivered via automated
software systems operating across multiple websites, media services and platforms, known as programmatic
advertising
Types of online advertising
Display advertising
Display advertising conveys its advertising message visually using text, logos, animations, videos, photographs,
or other graphics. Display advertising is ubiquitous across online systems including websites, search engines,
social media platforms, mobile applications and email. Google and Facebook dominate online display
advertising, which has become a highly concentrated market, with estimates that they were responsible for
70% of overall US digital advertising revenue in 2016.[2] The goal of display advertising is to obtain more traffic,
clicks, or popularity for the advertising brand or organization. Display advertisers frequently target users with
particular traits to increase the ads' effect.
Web banner advertising
Web banners or banner ads typically are graphical ads displayed within a web page. Many banner ads are
delivered by a central ad server.
Banner ads can use rich media to incorporate video, audio, animations, buttons, forms, or other interactive
elements using Java applets, HTML5, Adobe Flash, and other programs. Frame ads were the first form of web
banners.[23] The colloquial usage of "banner ads" often refers to traditional frame ads. Website publishers
incorporate frame ads by setting aside a particular space on the web page.
Pop-ups/pop-unders: A pop-up ad is displayed in a new web browser window that opens above a website
visitor's initial browser window.[35] A pop-under ad opens a new browser window under a website visitor's
initial browser window.[30]: 22 Pop-under ads and similar technologies are now advised against by online
authorities such as Google, who state that they "do not condone this practice". [36]
Floating ad: A floating ad, or overlay ad, is a type of rich media advertisement that appears superimposed over
the requested website's content. Floating ads may disappear or become less obtrusive after a pre-set time
period.
Expanding ad: An expanding ad is a rich media frame ad that changes dimensions upon a predefined
condition, such as a preset amount of time a visitor spends on a webpage, the user's click on the ad, or the
user's mouse movement over the ad.[37] Expanding ads allows advertisers to fit more information into a
restricted ad space.
Trick banners: A trick banner is a banner ad where the ad copy imitates some screen elements users
commonly encounter, such as an operating system message or popular application message, to induce ad
clicks.[38] Trick banners typically do not mention the advertiser in the initial ad, and thus they are a form of bait-
and-switch.[39][40] Trick banners commonly attract a higher-than-average click-through rate, but tricked users
may resent the advertiser for deceiving them.[41]
News Feed Ads
"News Feed Ads", also called "Sponsored Stories", "Boosted Posts", typically exist on social media platforms
that offer a steady stream of information updates ("news feed"[42]) in regulated formats (i.e. in similar sized
small boxes with a uniform style). Those advertisements are intertwined with non-promoted news that the
users are reading through. Those advertisements can be of any content, such as promoting a website, a fan
page, an app, or a product.
Some examples are: Facebook's "Sponsored Stories",[43] LinkedIn's "Sponsored Updates",[44] and Twitter's
"Promoted Tweets".[45]
This display ads format falls into its own category because unlike banner ads which are quite distinguishable,
News Feed Ads' format blends well into non-paid news updates. This format of online advertisement yields
much higher click-through rates than traditional display ads.[46][47]
Advertising sales and delivery models
A visualization of the real-time bidding market in programmatic advertising online. It is reproduced under
a Creative Commons license from Diaz Ruiz (2024)[48]
The process by which online advertising is displayed can involve many parties. In the simplest case, the website
publisher selects and serves the ads. Publishers which operate their own advertising departments may use this
method. Alternatively ads may be outsourced to an advertising agency under contract with the publisher, and
served from the advertising agency's servers or ad space may be offered for sale in a bidding market using
an ad exchange and real-time bidding, known as programmatic advertising.
Programmatic advertising
Programmatic advertising involves automating the sale and delivery of digital advertising on websites and
platforms via software rather than direct human decision-making.[2] Advertisements are selected and targeted
to audiences via ad servers which often use cookies, which are unique identifiers of specific computers, to
decide which ads to serve to a particular consumer. Cookies can track whether a user left a page without
buying anything, so the advertiser can later retarget the user with ads from the site the user visited.[49]
As advertisers collect data across multiple external websites about a user's online activity, they can create a
detailed profile of the user's interests to deliver even more targeted advertising. This aggregation of data is
called behavioral targeting.[50] Advertisers can also target their audience by using contextual to deliver display
ads related to the content of the web page where the ads appear.[25]: 118 Retargeting, behavioral targeting, and
contextual advertising all are designed to increase an advertiser's return on investment, or ROI, over
untargeted ads.[51]
Online advertising serving process using online bidding
Advertisers may also deliver ads based on a user's suspected geography through geotargeting. A user's IP
address communicates some geographic information (at minimum, the user's country or general region). The
geographic information from an IP can be supplemented and refined with other proxies or information to
narrow the range of possible locations.[33] For example, with mobile devices, advertisers can sometimes use a
phone's GPS receiver or the location of nearby mobile towers.[52] Cookies and other persistent data on a user's
machine may help narrow down a user's location even further.
This involves many parties interacting automatically in real time. In response to a request from the user's
browser, the publisher content server sends the web page content to the user's browser over the Internet. The
page does not yet contain ads, but contains links which cause the user's browser to connect to the publisher
ad server to request that the spaces left for ads be filled in with ads. Information identifying the user, such
as cookies and the page being viewed, is transmitted to the publisher ad server.
The publisher ad server then communicates with a supply-side platform server. The publisher is offering ad
space for sale, so they are considered the supplier. The supply side platform also receives the user's identifying
information, which it sends to a data management platform. At the data management platform, the user's
identifying information is used to look up demographic information, previous purchases, and other
information of interest to advertisers. The process is sometimes described as a 'waterfall'.[53]
Broadly speaking, there are three types of data obtained through such a data management platform:
First party data refers to the data retrieved from customer relationship management (CRM) platforms, in
addition to website and paid media content or cross-platform data. This can include data from customer
behaviors, actions or interests.[54]
Second party data refers to an amalgamation of statistics related to cookie pools on external publications and
platforms. The data is provided directly from the source (adservers, hosted solutions for social or an analytics
platform). It is also possible to negotiate a deal with a particular publisher to secure specific data points or
audiences.
Third party data is sourced from external providers and often aggregated from numerous websites. Businesses
sell third-party data and are able to share this via an array of distribution avenues. [55]
This customer information is combined and returned to the supply side platform, which can now package up
the offer of ad space along with information about the user who will view it. The supply side platform sends
that offer to an ad exchange.
The ad exchange puts the offer out for bid to demand-side platforms. Demand side platforms act on behalf of
ad agencies, who sell ads which advertise brands. Demand side platforms thus have ads ready to display, and
are searching for users to view them. Bidders get the information about the user ready to view the ad, and
decide, based on that information, how much to offer to buy the ad space. According to the Internet
Advertising Bureau, a demand side platform has 10 milliseconds to respond to an offer. The ad exchange picks
the winning bid and informs both parties.
The ad exchange then passes the link to the ad back through the supply side platform and the publisher's ad
server to the user's browser, which then requests the ad content from the agency's ad server. The ad agency
can thus confirm that the ad was delivered to the browser.[56]
This is simplified, according to the IAB. Exchanges may try to unload unsold ("remnant") space at low prices
through other exchanges. Some agencies maintain semi-permanent pre-cached bids with ad exchanges, and
those may be examined before going out to additional demand side platforms for bids. The process for mobile
advertising is different and may involve mobile carriers and handset software manufacturers. [56]
Interstitial ads: An interstitial ad displays before a user can access requested content, sometimes while the
user is waiting for the content to load.[57] Interstitial ads are a form of interruption marketing.[58][59]
Text ads: A text ad displays text-based hyperlinks. Text-based ads may display separately from a web page's
primary content, or they can be embedded by hyperlinking individual words or phrases to the advertiser's
websites. Text ads may also be delivered through email marketing or text message marketing. Text-based ads
often render faster than graphical ads and can be harder for ad-blocking software to block. [60]
Search engine marketing (SEM)
Search engine marketing, or SEM, is designed to increase a website's visibility in search engine results
pages (SERPs). Search engines provide sponsored results and organic (non-sponsored) results based on a web
searcher's query.[25]: 117 Search engines often employ visual cues to differentiate sponsored results from
organic results. Search engine marketing includes all of an advertiser's actions to make a website's listing more
prominent for topical keywords. The primary reason behind the rising popularity of Search Engine Marketing
has been Google. There were a few companies that had its own PPC and Analytics tools. However, this concept
was popularized by Google. Google Ad words was convenient for advertisers to use and create campaigns.
And, they realized that the tool did a fair job, by charging only for someone's click on the ad, which reported as
the cost-per-click for which a penny was charged. This resulted in the advertisers monitoring the campaign by
the number of clicks and were satisfied that the ads could be tracked. [61]
Search engine optimization, or SEO, attempts to improve a website's organic search rankings in SERPs by
increasing the website content's relevance to search terms. Search engines regularly update their algorithms to
penalize poor quality sites that try to game their rankings, making optimization a moving target for
advertisers.[62][63] Many vendors offer SEO services.[30]: 22
Sponsored search (also called sponsored links, search ads, or paid search) allows advertisers to be included in
the sponsored results of a search for selected keywords. Search ads are often sold via real-time auctions,
where advertisers bid on keywords.[25]: 118 [64] In addition to setting a maximum price per keyword, bids may
include time, language, geographical, and other constraints.[25]: 118 Search engines originally sold listings in
order of highest bids.[25]: 119 Modern search engines rank sponsored listings based on a combination of bid
price, expected click-through rate, keyword relevancy and site quality.[27]
Social media marketing
Social media marketing is commercial promotion conducted through social media websites. Many companies
promote their products by posting frequent updates and providing special offers through their social media
profiles. Videos, interactive quizzes, and sponsored posts are all a part of this operation. Usually these ads are
found on Facebook, Instagram, Twitter, and Snapchat.[65]
Mobile advertising
Mobile advertising is ad copy delivered through wireless mobile devices such as smartphones, feature phones,
or tablet computers. Mobile advertising may take the form of static or rich media display ads, SMS (Short
Message Service) or MMS (Multimedia Messaging Service) ads, mobile search ads, advertising within mobile
websites, or ads within mobile applications or games (such as interstitial ads, "advergaming", or application
sponsorship).[30]: 23 Industry groups such as the Mobile Marketing Association have attempted to standardize
mobile ad unit specifications, similar to the IAB's efforts for general online advertising. [59]
Email advertising
Email advertising is ad copy comprising an entire email or a portion of an email message. [30]: 22 Email marketing
may be unsolicited, in which case the sender may give the recipient an option to opt out of future emails, or it
may be sent with the recipient's prior consent (opt-in). Businesses may ask for your email and send updates on
new products or sales.
Chat advertising
As opposed to static messaging, chat advertising refers to real-time messages dropped to users on certain
sites. This is done using live chat software or tracking applications installed within certain websites with the
operating personnel behind the site often dropping adverts on the traffic surfing around the sites. In reality,
this is a subset of the email advertising but different because of its time window.
Online classified advertising
Online classified advertising is advertising posted online in a categorical listing of specific products or services.
Examples include online job boards, online real estate listings, automotive listings, online yellow pages, and
online auction-based listings.[30]: 22 Craigslist and eBay are two prominent providers of online classified listings.
Adware
Adware is software that, once installed, automatically displays advertisements on a user's computer. The ads
may appear in the software itself, integrated into web pages visited by the user, or in pop-ups/pop-
unders.[66] Adware installed without the user's permission is a type of malware.[67]
Affiliate marketing
Affiliate marketing occurs when advertisers organize third parties to generate potential customers for them.
Third-party affiliates receive payment based on sales generated through their promotion. [30]: 22 Affiliate
marketers generate traffic to offers from affiliate networks, and when the desired action is taken by the visitor,
the affiliate earns a commission. These desired actions can be an email submission, a phone call, filling out an
online form, or an online order being completed.
Content marketing
Content marketing is any marketing that involves the creation and sharing of media and publishing content in
order to acquire and retain customers. This information can be presented in a variety of formats, including
blogs, news, video, white papers, e-books, infographics, case studies, how-to guides and more.
Considering that most marketing involves some form of published media, it is almost (though not entirely)
redundant to call 'content marketing' anything other than simply 'marketing'. There are, of course, other forms
of marketing (in-person marketing, telephone-based marketing, word of mouth marketing, etc.) where the
label is more useful for identifying the type of marketing. However, even these are usually merely presenting
content that they are marketing as information in a way that is different from traditional print, radio, TV, film,
email, or web media.
Online marketing platform
An online marketing platform (OMP) is an integrated web-based platform that combines the benefits of
a business directory, local search engine, search engine optimisation (SEO) tool, customer relationship
management (CRM) package and content management system (CMS). eBay and Amazon are used as online
marketing and logistics management platforms.