UNIT 1 E COMMERCE TECHNOLOGY AND MANAGEMENT Introduction to E-Commerce E-commerce is the process of buying and selling of various products

s and services by businesses through the Internet. It deals various kind of business concern, from retail site of the consumer, which includes auction. The main focus is to concentrate on business substitutes involving goods and services between various corporations. Types of E-commerce: Business to Business (B2B) B2B stands for Business to Business. It consists of largest form of Ecommerce. This model defines that Buyer and seller are two different entities. It is similar to manufacturer issuing goods to the retailer or wholesaler. Dell deals computers and other associated accessories online but it is does not make up all those products. So, in govern to deal those products, first step is to purchases them from unlike businesses i.e. the producers of those products. It is one of the cost effective way to sell out product through out the world Benefits:

Encourage your businesses online Products import and export Determine buyers and suppliers Position trade guides

B2B is the selling between companies, wholesale rather than retail. But it means more than that. Efficient use of capital demands small inventories, which entails anticipating demand, and so maintaining detailed information flows between all parties involved in today's complex manufacturing processes. B2B involves widening the circle of suppliers (for safety and competition), and of centralizing control (for records and discounts). B2B ecommerce is an important part of any online business. Leaving aside the simple transfer of funds covered here many businesses need some combination of:

creditworthiness assessment. guarantee of quality and delivery of goods (escrow services). safeguards against fraud. fast collection of funds, with ability to vary the collection period. reporting: approval of sale, invoicing, delivery, payment. procedures to handle disputes. Information of all types corporate, technical, identity-building has to be interchanged across the scattered divisions of large companies, and new ideas fostered, assessed and disseminated. Speed is vital, as are improved communication, collaboration, and customer understanding. All these requirements can be handled by IT, and software has been developed to meet the challenge customer relationship management, enterprise resource planning, online auction, supply chain management, etc. Little of it is off-theshelf, but is devised as systems to be extended and built round individual company requirements.

Three B2B models of E-Commerce The B2B electronic commerce can be classified into: a. Supplier centric B2B b. Buyer centric b2b

c. intermediary centric B2B Supplier centric B2BIn the supplier-centric model, a supplier sets up the electronic commerce market place. Various customer/ buyer businesses interact with the supplier at its electronic market place. Typically, it is done by a dominant supplier in the domain of products it supplies. The supplier may provide customized solution and pricing to fit the needs of buyers business. The supplier may also institute different pricing schemes for buyers depending upon volume and loyalty count. Examples: 1. Intel 2.Cisco Connection Online (CCO) Buyer-centric B2BIn buyer-centric electronic commerce, major businesses(buyer) with high volume purchase capacity create an electronic commerce market place for purchase and acquisition by starting a site on their own. The online electronic commerce marketplace is used by the buyer for placing requests for quotations (RFQs) and carrying out the entire purchase process.This kind of facility may be utilized by high volume and well-recognized buyers, as they may have adequate capacity and business volumes to lure suppliers to bid at the site.. E g : G e n e r a l E l e c t r i c Information System Intermediary-centric B2B electronic commerce, a third party sets up the electronic commerce market place and attracts both the buyer and seller businesses to interact with each other. I.e., The role of the intermediary Company is that of an electronic market maker. The intermediary, by electronically connecting many different buyers and sellers through its database of potential suppliers and buyers, fulfills the role.The third party electronic commerce marketplace acts as a hub for both suppliers and buyers, where buyers place their request for the quotations and sellers respond by bidding electronically, leading to a match and ultimately to a final transaction. The buyers and sellers, both benefit from the increased options in terms of pricing, quality, availability and delivery of goods. Some benefits achieved by this specific model over two previous models (Supplier Centric and Buyer Centric) are:1.Since intermediary company represent a large number of members in that specific market segment, i.e., both the buyers and the sellers, it reduces the need for buyers and sellers to contact a large number of potential partners on their own. 2.The information available from the intermediary's database allows a b u y e r t o s c r e e n out obvious unsuitable sellers and to compare the offerings of many different potential sellers quickly, conveniently, and inexpensively. Examples of Intermediary-centric B2B: 1.Honeywell International (Myplant.com) 2. I n d i a M a r t . c o m 3. G e n e r a l E l e c t r i c ' s T r a d i n g P r o c e s s N e t w o r k ( T P N )

Tools used B2B Enterprises 1. Pricing-Pricing is used as a tool to generate sales on the Internet. The e- businesses use it by giving substantial discounts .Apart from this, companies also have started giving things free on the Internet in order to get a critical mass of buyer. 2. Use of application service provider (ASP) model-Software companies is offering their packages not in CDs but through the Web. The customer can log in over the Internet and access the software from the web server of the company and need not download it into his PC. Customer also neednot use even a hard disk and all critical application data is kept on the Web and can be accessed from anywhere in the world. These services are being offered at,an hourly rate. 3.Use of generic models, which are known for efficiency as well as personalized attention to various business customers The Web has given rise to a new partnership between e-businesses and express delivery companies like FedEx. These organizations take care of the individual elements of the customer, the order fulfillment and the post sale complaints, if a y n. 4. Use of comparison shoppingToday there are sites, which will take buyers to hundreds of sites to find the cheapest product to suit their specifications. This would never have been possible without the Internet. Major advantages of B2B model 1. By using B2B Electronic Commerce, any business can reengineer their supply chain and partnership. B2B will offer easy access to following types of information, which help any business organization to take better decisions: Information about Product -Price, Sales history Information about Suppliers -Product line and lead-time, sales terms and conditions Information about Production process

Capacity and product plan Information about Customers :Buying history and forecast Information about Competitors Market share, product offerings Information about Sales and marketing Promotions of new products Additional advantages of B2B 1.It is a cost reduction technique for the company by eliminating mediator 2 .Focused sales promotion-By directly interacting with customer b u y i n g patterns can easily be identified & these information gives authentic dataabout the likes, dislikes and preferences of clients and thus helps thecompany bring out focus sales promotion drives which are aimed at the rightaudience. 3 .Building customer loyalty-It has been observed that online c u s t o m e r s c a n b e more loyal than other customers and do not like to shift to another site if they are made to feel special, their distinct identity is recognized and their concerns about privacy are respected. 4.With the help of online reverse auction the buyer of industrial goods can get the product at a cheap deal, as there are many competitors in an online reverse auction.

5. F r o m t h e p u r c h a s i n g c o m p a n y s p o i n t o f v i e w , B 2B is a medium of facilitating procurement management such as reduced prices and reduced cycle time. 6..Electronic funds transfer-using EDI can be done between to organizations. 7. B2B helps in lowering the cost for selling and marketing. 8 . It shortens the selling cycle. 9.The most important advantage of B2B is to have JIT,just in time delivery to ensure that materials or supplies arrive at a facility just when they are needed. The supplier company can have the track of good as to which place it has reached with the help of B2B electronic commerce. Cisco has been exploiting the benefits of the supplier-centric electronic commerce for several years. Cisco system is the leading supplier of computer networking equipment. In the early years customers used Cisco Connection Online (CCO)by dialing up the public data communication network to access product information and solutions to common problems.In the following year, Cisco's launch of its web site with company and product information, discussion forums, and a feedback mechanism to identify the future needs of customers, in addition to information sharing and providing solutions to their problems. Customers posted their questions in this open forum, Cisco engineers and others who may have faced the same problem earlier provided the answers .Cisco website also added tools for downloading the software patches and new releases of software. By implementing a virtual supply chain the company has been able to reduce inventory levels by 45%, and reduce the time to market its products by approximately 12 weeks. The operating cost savings resulting from its shift to virtual manufacturing have been estimate that over US $ 175 million. The company has already deployed an e-learning solution and can train up to 3000, people, dispersed worldwide, in a single online session. The move to adopt an e-learning solution for sales and technical staff will save around 60% of the training costs incurred by the company. Online technical assistance to users, through the Technical Assistance Center(TAC ) web site of the Cisco, provides real-time assistance. The site handles over 80% of the support questions, with a majority of them resulting in a satisfactory close out in a single interaction. 1. Eg of buyer centric E-commerce -General Electric Information System(1) The General Electric Information Systems (GEIS) is one the most diversified companies with leading status in manufacturing home appliances, power generation, aircraft engines, industrial materials, TV broadcasting, and capital services, and is one of top ten corporations in the United States. The process of managing the tendering process, suppliers' database and providing timely information to suppliers was a cumbersome task due to the shear volume of procurement. The General Electric Information Systems (GEIS) initiated a web site for posting invitations for tenders and other accompanying documents to streamline its procurement process. In the new process, the company posted a single copy of the online downloadable Documents, and notified GE's suppliers through e-mail. The company's suppliers were expected to download the Request For Quotations (RFQs) through the internet and submit their bids electronically. A single online posting of the tender document and e-mail notifications to selected suppliers along with their subsequent online bidding not only saves time but has also offered tremendous savings in processing costs. Also, it has

increased competition as any supplier from any part of the world can access the site and bid.In order to be able to bid all they require is an internet connection and the Trading Process Network (TPN) software download, which is free of charge. (2)General Electric Information System: The company experimented with a pilot implementation to automate procurement at GE's Lighting Unit in Cleveland. It resulted in an immediate payoff of 10 to 15 percent reduction in prices, due to the openness of the web. Also,the purchasing cycle was cut to half from fourteen days to seven days. The deployment of e-commerce based procurement solutions has reduced transaction costs for both General Electric and also its suppliers. Thus it creates a level playing field for small businesses and offers them an opportunity to compete. An Example Of B2B Intermediary Centric E-Commerce-IndiaMart.com (1)IndiaMart.com has been serving as a third party electronic market place for Indian exporters and manufacturers. The company implemented a Business-to-Business (B2B) electronic marketplace in 1996, at a time when electronic commerce awareness had just begun to unfold. IndiaMart.com planned to capitalize on the opportunity of becoming a third party market maker that connects Indian exporters with buyers abroad. During the start-up period IndiaMart did not have any supplier base, thus getting buyers was a challenging task. On the other hand attracting suppliers to join a marketplace that did not have potential buyers was noless of a challenge. (2)IndiaMart.com IndiaMart tackled the issue by creating business catalogues and placing them on the net during the initial period. As a result,suppliers got free listing and exposure. IndiaMart further added thefeature of free query forwarding in addition to free listing,as the free listing service was available at many sites. The queries received by IndiaMart were forwarded through e-mail, fax, phone or regular postal service to exporters, depending upon the nature of facilities available with them. The forwarding of queries through e-mail did not entail much expense, but phone, fax, and postal services did.However, it was essential to demonstrate the power and reach of the Internet to exporters and suppliers who were not even familiar with computers. The strategy paid off in long run. As suppliers started receiving queries, they were interested in making a bigger presence on the IndiaMart.com e-marketplace. The development of web based catalogues and contents for these suppliers, exporters, and tour operators formed an important revenue stream in the early years. Consumer to Consumer (C2C) C2C stands for Consumer to Consumer. It helps the online dealing of goods or services among people. Though there is no major parties needed but the parties will not fulfill the transactions without the program which is supplied by the online market dealer such as eBay. 2C or Consumer to Consumer refers to online dealing of good and services between people. The parties are two consumers (individuals). This type of transaction is fulfilled due to online market dealer like auction sites, becoming more and more popular nowadays

B2C or Business to Consumer has lately gained a big popularity due to simplified and accelerated way to buy products. Business to Consumer refers to selling and buying of goods and services via the web. The parties are: a company (a web retailer) who trades to an individual (a web customer). Retail trading (via online shops and with more convenience. The disadvantages of B2C E-Commerce type are selling to un-trusted strangers and extra effort to get customer and payment information. However, B2C almost always involves a customer typing information into an order screen therefore it is a better solution to provide comparing to B2B. Advantages of B2C e-commerce B2C e-commerce has the following advantages:

Shopping can be faster and more convenient. Offerings and prices can change instantaneously. Call centers can be integrated with the website. Broadband telecommunications will enhance the buying experience.

Challenges faced by B2C e-commerce The two main challenges faced by B2C e-commerce are building traffic and sustaining customer loyalty. Due to the winner-take-all nature of the B2C structure, many smaller firms find it difficult to enter a market and remain competitive. In addition, online shoppers are very price-sensitive and are easily lured away, so acquiring and keeping new customers is difficult. A study of top B2C companies by McKinsey found that:

Top performers had over three times as many unique visitors per month than the median. In addition, the top performer had 2,500 times more visitors than the worst performer. Top performers had an 18% conversion rate of new visitors, twice that of the median. Top performers had a revenue per transaction of 2.5 times the median. Top performers had an average gross margin three times the median.

There was no significant difference in the number of transactions per customer and the visitor acquisition cost. In this model some E-tailers offer traditional or Web-specific products or services only over the Internet. Examples of virtual merchants include amazon.com (books, electronics, toys, and music). Another variant is e-businesses who provide high-value content to consumers for a subscription fee. Examples-Wall Street Journal (financial news and articles) A third variant is virtual malls , which are websites that host many online merchants. Virtual malls typically charge setup, listing, or transaction fees to online merchants, and may include transaction handling services and marketing. E g : e x c i t e . c o m Forth variant is catalogue merchants who supplement a successful traditional mail-order business with an online shopping site, or move completely to Web- based ordering. Examples include avon.com (cosmetics and fragrances)

Advantages of B2C The competition is so vast on the web. There can literally be thousands of places a customer can go to purchase the same product that a business offers. Technology problems can cause business website to not o p e r a t e properly, causing to loose customers and sales. .Some consumers are still somewhat fearful of sending their c r e d i t card number over the Internet.

E-Government used to refer to the use of information and communication technology to provide and improve government services, transactions and interactions with citizens, businesses, and other arms of government. G2C and G2B and G2G e-Government is all about government agencies working together to use technology so that they can better provide individuals and businesses with government services and information. It is not a massive Information Technology (IT) project. Much of it is about establishing common standards across government, delivering services more effectively, providing ways for government agencies to work together all using the best technologies that are available. e-Government refers to the use by government agencies of information technologies (such as Wide Area Networks, the Internet, and mobile computing) that have the ability to transform relations with citizens, businesses, and other arms of government. These technologies can serve a variety of different ends: better delivery of government services to citizens, improved interactions with business and industry, citizen empowerment through access to information, or more efficient government management. The resulting benefits can be less corruption, increased transparency, greater convenience, revenue growth, and/or cost reductions. Government-to-Government (abbreviated G2G) is the online non-commercial interaction between Government organisations, departments, and authorities and other Government organisations, departments, and authorities. Its use is common in the UK, along with G2C, the online non-commercial interaction of local and central Government and private individuals, and G2B the online non-commercial interaction of local and central Government and the commercial business sector. G2G systems generally come in one of two types: Internal facing - joining up a single Governments departments, agencies, organisations and authorities - examples include the integration aspect of the Government Gateway, and the UK NHS Connecting for Health Data SPINE. External facing - joining up multiple Governments IS systems - an example would include the integration aspect of the Schengen Information System (SIS), developed to meet the requirements of the Schengen Agreement Government-to-Citizen (abbreviated G2C) is the communication link between a government and private individuals or residents. Such G2C communication most often refers to that which takes place through Information Communication Technologies (or ICTs), but can also include direct mail and media campaigns. G2C can take place at the federal, state, and local levels. Government to consumer markets provide numerous opportunities for consumers, both private and commercial, to take advantage of the many government offerings available. G2C business involves everything from grants and loans to copies of property transactions and credit reports. Government contracts can be very lucrative and constitute a huge market for government to consumer businesses. Consumer to government markets are built by consumers looking for safe investments through bonds and other safe investment vehicles. In the government to consumer marketplace, consumers are protected by regulations and agencies that keep watch on the public safety. Finally, G2C e-commerce is becoming more popular for citizens to purchase postage, registrations and permits via G2C websites.

G o v e r n m e n t - t o - B u s i n e s s ( B 2 G ) B2G may also include e-procurement services, in which businesses learn about the purchasing needs of govt. agencies and give responses of agency's request proposal. B2G may also support the idea of a virtual workplace in which a business and govt. agency could coordinate the work on a

contracted project by sharing a common site to coordinate online meetings, review plans, and manage progress. Government-to-Government(G2G)-Government-to-Government is the online interaction between Government organizations, departments, and authorities and with other Government organizations, departments, and authorities. Government-to-Employees (G2E) - Government-to-Employees is the online interaction between Government organizations and its employees Classification-Primarily E-Government can be divided into Government-to-Citizen (G2C) Government -to-Business(G2B) Government-to-Government (G2G) Government-to-Employees (G2E)

Benefits-1.It is convenient and cost-effective for public and businesses (also) that they get easy access to the most current information available without thaving to spend time, energy and money to get it. 2.Improved accounting and record keeping can be achieved through.computerization, and information and forms can be easily accessed,resulting quicker processing time .3.On the administrative side linked information can now be stored in databases versus hardcopies stored in various locations. 4.Individuals with disabilities or conditions no longer have to be mobile to interact with government and can be in the comfort of their own homes E-Government Problems 1.Although a prodigious amount of money has been spent on t h e development and implementation of e-government, effects of Internet-based governments are often difficult to gauge orun satisfactory. 2 .Once e-government begins to develop and become more sophisticated, citizens will be forced to interact electronically with the government on a larger scale. This could potentially lead to a lack of privacy for civilians as their government obtains more and more information on them 3 .An e-government site that provides web access and support often does not offer the potential to reach many users including those who live in remote areas or have low English proficiency or exist on poverty line incomes.

E-commerce Providers and Vendors The survey listed 14 of the major ecommerce providers, plus an other box for providers not listed. Valid responses were received for 25 different ecommerce providers, as shown below:

What is a Business Model?

The Business Model:

describes how a company functions; how it provides a product or service, and how it produces revenue indicates how a company will create and adapt to new markets and technologies has four components: e-business concept, value proposition, sources of revenue, and business activities, resources and capabilities shows how a company can be successful provided that all the components work together in a cooperative and supportive fashion. helps management to focus on the whole business, not just on one activity

eBusiness model describes how an organization operates and provides products or services. It also demonstrates how the company makes money. Many business models explain the organizations approach to creating and penetrating new markets or technologies. Most eBusiness models consist of various components - concept, value proposition and sources of revenue. In addition, models include business activities, resources and core capabilities
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The brokerage eBusiness model entails bring together buyers and sellers together to make possible business transactions. Brokers can facilitate consumer-to-consumer, consumer-to-business or business-to-business markets. This business model earns money by charging a fee or commission for each transaction. Various types of brokerage models exist, such as auction broker, search agent, buy/sell fulfillment or transaction broker. Auction brokers coordinate auctions for sellers for a listing fee and commission. The eBay website epitomizes the clearest example of the model. Search agents involve a robot or search agent that uncovers prices and the availability of specific goods and services or difficult-to-find items. Buy/sell fulfillment brokers takes customers directives to buy or sell services or products. A transaction broker offers buyers and sellers a third-party payment venue where the parties can settle business transactions. Infomediary: This particular eBusiness model entails capturing and sharing information. Some organizations may have website users to register to gain access to the information on the website, even free information. This is a common technique for getting white papers or eBooks. Many companies have white papers written by experts or consultants; after receive the visitors telephone number, email and other contact information, follow up with sales calls to obtain leads for new business. Some other info-mediary entities like specialize in supplying banner ads to a group of member site, collecting consumer data to evaluate marketing campaigns. Another model provides consumers incentives, such as coupons or points to patronize certain businesses and collects data to sell for target advertising campaigns. Advertising models: The advertising eBusiness model works in the same way as the convention media broadcast version. The business may offer free or paid services, such as email, blogs or instant messaging. Many sites list ads, products or services for sell. This model usually have banner or text ads, which may constitute the primary source of revenue. Generally, this sort of model requires a high volume of traffic. The model also works for highly specialized traffic The affiliate eBusiness model offer products or services whenever people may surf on the Web. An Internet merchant offers financial incentives, usually as a commission, for a web site owner to place advertisement with links on the affiliate's website. When a surfer clicks on the link and buy, the affiliate receives a commission. Companies benefit from this approach because it reduces customer acquisition costs and allows merchants to target specific markets