Electronic Business

What is e-Business? As per IBM, e-Business is the transformation of key business processes through the use of internet technologies. As a concept, e-Business is applied in two main ways with an organisation: As a concept which can be applied to strategy and operations As an adjective to describe businesses that mainly operate online

As per Department of Trade and Industry, When a business has fully integrated information and communication technologies (ICTs) into its operations, potentially redesigning its business processes around ICT or completely reinventing its business model e-business, is understood to be the integration of all these activities with the internal processes of a business through ICT. Opportunities in e-Business Reach: Number of potential customers a business can interact with or number of different categories a customer interface (e.g. store, catalogue or website) can cover. Reach is improved in both senses, one by low cost customer reach provided by search engines and second by online stores and malls. Richness: Internet enables more detailed information about products, prices and availability, more interactivity and customisation to engage customers and provide more up to date information. Affiliation: Refers to effectiveness of links with partners. In online context an organisation with the most and richest links gets the most benefits.

Risks in e-Business Site down because of high traffic Hackers and spam, identity theft issues Lack of or low grade email customer support

Electronic Commerce
Definition of e-Commerce As per HM Government Cabinet Office (1999) Electronic Commerce is the exchange of information across electronic networks, at any stage in the supply chain, whether within an organisation, between businesses and consumers or between the public & private sector, whether paid or unpaid. The use of ICT to enable external activities and relations with individuals, groups of people, and other business can be described as components of e-Commerce. It is a type of transaction completed over computer networks involving transfer of ownership or a right to use goods and/or services. It is a system that combines the resources of information systems with the reach of network connectivity, to directly link the key business constituents, customers and businesses, to improve the efficiency structures and elements of commerce. Impact of e-Commerce Lower coordination costs favour electronic markets Multiple choice preferences based shopping Minimized delivery costs, trade-off in market participation Low connectivity cost can transform and expand products to make them suitable for e-market

Electronic Commerce as a subset of e-Business Electronic Business offers online transactions but also extends to all internet based interactions with business partners. These online interactions are aimed at improving or transforming business processes and efficiency. ICT in e-Commerce is used for inter-organisational transactions but in e-Business ICT helps enhance ones business itself, thus also handling intra-organisational transactions over ICT. Similarly whereas e-Commerce seeks to add revenue streams, e-Business is strategic and much more function oriented in nature.

Types of e-Commerce
Different types of Sell Side e-Commerce Transactional e-Commerce sites (enable online buying) Brand building sites (provide an experience to support the brand) Portal or media sites (provide information or news about a range of topics) Service oriented relationship-building websites (provide information to stimulate purchase and build relations Searching for info. Purchasing physical goods Online receipts for information goods (e.g. MP3 files) Second largest and earliest of eCommerce forms Originated with e-Retailing Most common applications are o Product purchase o Information purchase o Personal finance management Reduces transaction (search) costs Reduces market entry barriers Considerable savings on info. goods o o o

Other types (base of relations) Business to Business (B2B) Comprises 80% of e-Commerce, fast growth expected Two primary components: o e-Infrastructure o e-Markets e-Infrastructure is architecture of B2B o Logistics (transportation etc.) o Application services providers (hosting etc.) Many e-Commerce functions can be outsourced Auction solutions, CMS, purchasing automation etc. Most B2B applications are either o Supplier management o Inventory management o Distribution management o Channel management o Payment management B2B e-Commerce has reduced costs for: o Search costs for buyer o Transaction processing costs (invoicing etc.) o Inventory & logistics costs Electronic commerce removes intermediaries brings pricing transparency and helps bring economies of scale

Business to Government Use of internet for public procurement, licensing procedures and other govt. operations Public sector has leading role as they have a need to make their procurement effective and efficient Brings procurement transparency Government to Business setup brings govt. functions to business over the internet

Business to Customer (B2C) It involves the customers:

Benefits, Limitations and Barriers of e-Commerce

Benefits of e-Commerce 24 X 7 operations Global reach Low cost of acquiring retaining and serving customers Easy to build as extended enterprise Disintermediation Improved customer service to your clients Power to provide the best of both worlds Technology based customer interface Customer controls the interaction Knowledge of customer behaviour Network economies

Limitations and Barriers of e-Commerce Not useful for perishable goods business Might take time to generate return on investment Integration of various databases might pose problems Reach issues in face of poor network connectivity Lack of skilled manpower Ambiguous legal environment Consumer resistance to online buying

Electronic Commerce Models

Business model is a structure of cost and revenue for an organisation. It may include: Storefront Free access Virtual mall Click and mortar Built to order (online ordering and customisation like Dell computers) Broker

Timmers 11e-Commerce models for businesses 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. e-Shop e-Procurement e-Mall (collection of e-Shops) e-Auctions Virtual communities Collaboration platforms Third party marketplaces (e.g. B2B alibaba.com) Value chain integrators Value chain service providers Information brokerage Trust and other services (Verisign etc.)

Key concerns in e-Business models Privacy Security Usability

Value Chains in Electronic Commerce

In e-Commerce, businesses require to integrate two kinds of activities: Those embedded in the physical value chains Those built through information into the virtual chain

Although relative importance of these two kinds of chains depends on the characteristics of the products and services, their integration plays a critical role in the success of e-Commerce. In e-Commerce, more and more value chain activities are conducted electronically therefore a business should understand the implications of virtual value chain activities. This value chain in virtual mode offers a number of distinct advantages over physical value chain. Some advantages lie in forging alliances between customers and manufacturer advertising products and services selectively with effects of audio, visual and graphics and saving time and money in efficient processing of customer orders and enquiries. Flexibility in option pricing and customisation of products and service by reducing space and time constraints is another advantage of e-Commerce. Value chain management in e-Business helps you understand strengths and weaknesses of the organisation identify gaps and fill them. Inbound logistics including e-Procurement system, automatic ordering and EDI. Production process including ERP (intranet), Distribution systems, Extranet, RFID etc Sales and marketing including CRM and online sales systems Workplace admn. with Building Management Systems and Business to Employee Systems

Electronic Commerce in India

India has internet user base of about 137 million as of June 2012 yet e-Commerce is less penetrated as compared to US and UK. Still broadband penetration is growing at 20% month-on-month. Electronic Commerce in India was USD 2.5 billion n 2009, USD 6.3 billion in 2011 and USD 14 billion in 2012. About 75% of this is travel related e.g. rail and air tickets. In terms of retail, 12.5% at 300 million USD in 2009, with the growth estimates being USD 470 billion in 2011 and USD 615 billion by 2016, reaching up to USD 850 billion by 2020. The expected 2012-2016 CAGR is 57% plus and overall estimated CAGR is of 7% as quoted by Forrester. As of 2012, most of the e-Commerce companies are yet to start making money with considerable venture capital investment. Features unique to e-Commerce in India are cashon-delivery payment system and direct import of international consumer products. Mc Kinsey says that low internet penetration and high infrastructure barriers are hobbling but not crippling online shopping. Focus of the companies so far has been on younger and affluent buyers. Except travel, most popular areas have been cell phones, books, computer hardware, and consumer electronics. Apparel shopping has been slow moving. Flipkart, Infibeam etc are the e-tailers, online channels of established retail chains, like Next and Shoppers Stop are also active as well as third party e-Commerce sites like Indiatimes and eBay India.

Framework of e-Business

e-Commerce Applications (e-Banking, e-Ticketing) Information superhighway is a two way connectivity infrastructure that can support multimedia content. Common Business Service Infrastructure (Payment gateway, security technologies) Messaging and Information Distribution Network (Protocols) Multimedia Content (Text, Audio Video) Information Superhighway (i-Way) Legal and Policy Framework (IT Act 2000)

Consumer Premises Equipment Global Distribution Network Telecom Network Cable TV Network

Technology Infrastructure Framework (TCP-IP)

Web Based Tools for e-Commerce

Basic requirements of a Web Server Basic requirements of a merchant to have a web presence or e-Commerce site: o Internet connection o A web server in company network Internet connection comes from ISP over a leased line Web server is made of hardware and software Web server is decided based upon: o Network operating system (Unix) o Expected hardware requirements o Expected traffic or number of transactions per time unit o Other software running on computer o Hardware scalability It is advised to do some benchmarking at the start Web server software features (common): o Core capabilities o Site management o Application construction o Electronic commerce Core capabilities include: o Client request processing o IP sharing or virtual server o Logical file o Security o FTP, searching and site analysis Site management includes: o Tools to manage many sites, file security, logs etc. o Remote web server administration capability o Selective site access control o Ability to stop or restart web service without impacting the computer o Some site authoring tools Application Development includes web editors and site scripting capabilities Electronic commerce capabilities include: o Separate e-Commerce software that integrates with web server application o Microsoft Commerce Server is one such software

Intranet
An intranet is a computer network that uses Internet Protocol technology to share information, operational systems, or computing services within an organization. The term is used in contrast to internet, a network between organizations, and instead refers to a network within an organization. Sometimes, the term refers only to the organization's internal website, but may be a more extensive part of the organization's information technology infrastructure, and may be composed of multiple local area networks. Companies may provide intranet access to offsite employees over VPN or through other authentication and encryption systems. Uses of Intranet Increasingly, intranets are being used to deliver tools, e.g. collaboration (to facilitate working in groups and teleconferencing) or sophisticated corporate directories, sales and customer relationship management tools, project management etc., to advance productivity. Intranets are also being used as corporate culture-change platforms. For example, large numbers of employees discussing key issues in an intranet forum application could lead to new ideas in management, productivity, quality, and other corporate issues. Increasingly, intranets are being used to deliver tools, e.g. collaboration (to facilitate working in groups and teleconferencing) or sophisticated corporate directories, sales and customer relationship management tools, project management etc., to advance productivity. Intranets are also being used as corporate culture-change platforms. For example, large numbers of employees discussing key issues in an intranet forum application could lead to new ideas in management, productivity, quality, and other corporate issues.

Composition of Intranet
An intranet comprises of various computing and network devices that function as: An open, multi-way communication vehicle: Top Down, Bottom Up, Peer-to-Peer Facilitator system for enterprise collaboration Business transactions execution system Business knowledge gateway and repository Employee engagement support system

It should comprise of systems from all departments like HR, Marketing, Workplace Administration, Quality and Operations and of course IT department.

Business Applications on Intranet

Various kinds of business applications can be hosted on a company intranet. These should ideally be managed in terms of technological aspects by a common intranet technical team and in functional terms by the department. A cenrtralised Query management systems hould be provided to eomployees which directs query to concerned department. HRM HRIS Leave and attendance management system Training information management system Policy repository with search and access system Resource allocation management system Recruitment and referrals system

Workplace Administration Transport management system Seat and supplies management system

ICT department Devices and equipment assignment system Communication services provisioning system Incident or service information system

Operations department ERP Quality management system

Finance department Employee tax management system Company accounts and billing system Vendor management system

Marketing department CRM system Corporate communication portal Brand management system

Extranets
An extranet is a computer network that allows controlled access from the outside, for specific business or educational purposes. In a business-to-business context, an extranet can be viewed as an extension of an organization's intranet that is extended to users outside the organization, usually partners, vendors, and suppliers, in isolation from all other Internet users. In contrast, business-to-consumer (B2C) models involve known servers of one or more companies, communicating with previously unknown consumer users. An extranet is similar to a DMZ in that it provides access to needed services for channel partners, without granting access to an organization's entire network. Relationship to an intranet An extranet can be understood as an intranet mapped onto the public Internet or some other transmission system not accessible to the general public, but managed by more than one company's administrator(s). For example, military networks of different security levels may map onto a common military radio transmission system that never connects to the Internet. Any private network mapped onto a public one is a virtual private network (VPN), often using special security protocols. Advantages Exchange large volumes of data using Electronic Data Interchange (EDI) Share product catalogues exclusively with trade partners Collaborate with other companies on joint development efforts Jointly develop and use training programs with other companies Provide or access services provided by one company to a group of other companies, such as an online banking application managed by one company on behalf of affiliated banks

Disadvantages Extranets can be expensive to implement and maintain within an organization (e.g., hardware, software, employee training costs), if hosted internally rather than by an application service provider. Security of extranets can be a concern when hosting valuable or proprietary information.

Electronic Data Interchange

Electronic data interchange (EDI) is a method for transferring data between different computer systems or computer networks. It is commonly used by big companies for ecommerce purposes, such as sending orders to warehouses or tracking their order. It is more than mere e-mail; for instance, organizations might replace bills of lading and even cheques with appropriate EDI messages. It also refers specifically to a family of standards. According to the 2008 Aberdeen report "A Comparison of Supplier Enablement around the World", only 34% of purchase orders are transmitted electronically in North America. In EMEA, 36% of orders are transmitted electronically and in APAC, 41% of orders are transmitted electronically. They also report that the average paper requisition to order costs a company $37.45 in North America, $42.90 in EMEA and $23.90 in APAC. With an EDI requisition to order costs are reduced to $23.83 in North America, $34.05 in EMEA and $14.78 in APAC. Standards In 2002, the IETF published RFC 3335, offering a standardized, secure method of transferring EDI data via e-mail. On July 12, 2005, an IETF working group ratified RFC4130 for MIME-based HTTP EDIINT (a.k.a. AS2) transfers, and is preparing a similar RFC for FTP transfers (a.k.a. AS3). While some EDI transmission has moved to these newer protocols, the providers of the value-added networks remain active. EDI documents generally contain the same information that would normally be found in a paper document used for the same organizational function. For example an EDI 940 shipfrom-warehouse order is used by a manufacturer to tell a warehouse to ship product to a retailer. It typically has a 'ship-to' address, a 'bill-to' address, and a list of product numbers (usually a UPC) and quantities. Another example is the set of messages between sellers and buyers, such as request for quotation (RFQ), bid in response to RFQ, purchase order, purchase order acknowledgment, shipping notice, receiving advice, invoice, and payment advice. Advantages over paper systems EDI and other similar technologies save a company money by providing an alternative to, or replacing, information flows that require a great deal of human interaction and materials such as paper documents, meetings, faxes, etc. Even when paper documents are maintained in parallel with EDI exchange, e.g. printed shipping manifests, electronic exchange and the use of data from that exchange reduces the handling costs of sorting, distributing, organizing, and searching paper documents. EDI and similar technologies allow a company to take advantage of the benefits of storing and manipulating data electronically without the cost of manual entry. Another advantage of EDI is reduced errors, such as shipping and billing errors, because EDI eliminates the need to rekey documents on the destination side. One very important advantage of EDI over paper documents is the speed in which the trading partner receives and incorporates the information into their system thus greatly reducing cycle times. For this reason, EDI can be an important component of just-in-time production systems.

Components of Electronic Data Interchange

Application layer consists of actual business applications that are going to be connected through the EDI system for exchange of electronic information. These applications may use their own electronic records formats for storing, retrieving and processing the information within each companys system. Standard Formats layer is the second important and critical building block of EDI. It ensures that all parties in EDI system are able to read and process the information and documents being sent. Two common documents standards that operate at this layer are EDIFACT and ANSI X12. Data Transport layer consists of services that automate the task of electronic transfer of messages. The layer utilises any of the available network transport services as e-Mail, FTP, Telnet or HTTP. Interconnection layer refers to the network infrastructure that is used for the exchange of information between trading partners. It may consist of dial up lines, leased lines, or I-way or any combination of two or more of these.

Electronic Data Interchange Communication Process

Step 1: Prepare the documents to be sent The first step is to collect and organize the data. For example, instead of printing a purchase order, your system creates an electronic file with the necessary information to build an EDI document. The sources of data and the methods available to generate the electronic documents can include: manual data entry via screens, exporting PC-based data from spreadsheets or databases, reformatted electronic reports into data files etc. Step 2: Translate the documents into EDI format The next step is to feed your electronic data through translator software to convert your internal data format into the EDI standard format using the appropriate segments and data elements. You can purchase EDI translation software that you manage and maintain on your premises. This requires specialized mapping expertise in order to define how your internal data is to be mapped (i.e. correlated) to the EDI data. Translation software is available to suit just about any computing environment and budget, from large systems that handle thousands of transactions daily to PC-based software that need only process a few hundred transactions per week. Step 3: Connect and transmit your EDI documents to your business partner Once your business documents are translated to the appropriate EDI format they are ready to be transmitted to your business partner. You must decide how you will connect to each of your partners to perform that transmission. There are several ways, the most common of which include 1) to connect directly using AS2 or another secure internet protocol, 2) connect to an EDI Network provider (also referred to as a VAN provider) using your preferred communications protocol and rely on the network provider to connect to your business partners using whatever communications protocol your partners prefer, or 3) a combination of both, depending on the particular partner and the volume of transactions you expect to exchange.

Security Issues in e-business: Security Overview

There are three main security issues relevant to doing business online: Verifying the identity of the person you are doing business with. Ensuring that messages you send and receive have not been tampered with. Obtaining evidence of the date, time and place at which a contract was made.

This massive increase in the uptake of eCommerce has led to a new generation of associated security threats, but any eCommerce system must meet four integral requirements: Privacy information exchanged must be kept from unauthorized parties Integrity the exchanged information must not be altered or tampered with Authentication both sender and recipient must prove their identities to each other and Non-repudiation proof is required that the exchanged information was indeed received Distributed Denial of Service (DDoS) attacks and Denial of Service Attacks leading to: Unusually slow network performance Unavailability of a particular web site Inability to access any web site Dramatic increase in the number of spam emails received DoS attacks can be executed in a number of different ways including: ICMP Flood (Smurf Attack) Teardrop Attack. Phlashing Distributed Denial-of-Service Attacks

These basic maxims of eCommerce are fundamental to the conduct of secure business online. Further to the fundamental maxims of eCommerce above, eCommerce providers must also protect against a number of different external security threats like technical and non technical attacks. Technical Attacks Brute Force Attacks

Non-Technical Attacks Phishing Attacks Social Engineering

Electronic Commerce Threats

eCommerce has forever revolutionized the way business is done. Retail has now a long way from the days of physical transactions that were time consuming and prone to errors. However, eCommerce has unavoidably invited its share of trouble makers. As much as eCommerce simplifies transactions, it is occasionally plagued by serious concerns that jeopardize its security as a medium of exchanging money and information. Major threats to present day eCommerce include: Money thefts eCommerce services are about transactions, and transactions are very largely driven by money. This attracts hackers, crackers and everyone with the knowledge of exploiting loopholes in a system. Once a kink in the armor is discovered, they feed the system(and users) with numerous bits of dubious information to extract confidential data(phishing). This is particularly dangerous as the data extracted may be that of credit card numbers, security passwords, transaction details etc. Also, Payment gateways are vulnerable to interception by unethical users. Cleverly crafted strategies can sift a part or the entire amount being transferred from the user to the online vendor. Identity thefts Hackers often gain access to sensitive information like user accounts, user details, addresses, confidential personal information etc. It is a significant threat in view of the privileges one can avail with a false identity. For instance, one can effortlessly login to an online shopping mart under a stolen identity and make purchases worth thousands of dollars. He/she can then have the order delivered to an address other than the one listed on the records. One can easily see how those orders could be received by the impostor without arousing suspicion. While the fraudsters gains, the original account holder continues to pay the price until the offender is nabbed. Threats to the system Viruses, worms, Trojans are very deceptive methods of stealing information. Unless a sound virus-protection strategy is used by the eCommere Solutions firm, these malicious agents can compromise the credibility of all eCommerce web solution services. Often planted by individuals for reasons known best to them alone, viruses breed within the systems and multiply at astonishing speeds. Unchecked, they can potentially cripple the entire system.