Welcome to the World of E – Commerce By: Dr
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Welcome to The World of E – Commerce By: Dr. K. T. Subhas chandra., Govt. R. C. College of Commerce. Module 1 Introduction to e-commerce and e-business. Types of E-Commerce Modes E-commerce business models, B2B,B2C, C2C,C2B, B2G, G2G, G2E, G2C. E-Marketing, Techniques and Tools, E-Commerce Providers and Vendors Introduction Information Age/Era is knowledge – based Industrial Revolution. Information and Information Technology [IT] are new Drivers of this Era like other Drivers of the business viz., technology & Marketing, Research & Development, Entrepreneurship., etc., The changes in the Business – Environment is accelerated by IT and It‟s Change. The challenge into the next century is not only to survive competition, and use new technologies, but also to mange change in technology and in markets. The key business characteristics of industrial age and Information age business have been compared by Tjaden as follows Industrial Age Information Age 1. Mass Production Mass Communication 2. Labour serves tools Tools serve Labour 3. Labour performs repetitive tasks Labour applies Knowledge 4. Command & control structure Common control structure 5. Capital intensive Knowledge intensive 6. Capitalist own production means Labour owns production means 7. Capital is primary driver Knowledge is primary driver. What is Information technology? Information Technology (IT) in its narrow definition refers to the technological side of an information system. It includes Hardware, Software, Database, Networks and other devices. As such, it can be viewed as a sub-system of an information system. Some times, the term IT is also used interchangeably with information system or it may be used as a broader concept that describes a collection of several information systems, users, Internet, Intranet, Extranet and management of an entire organisation. The purpose of Information Technology • For determining the applications of IT that will help to identify applications that have an impact upon the individual, the functional unit, and the organization as a whole • the applications can be placed into three categories. Those designed to improve efficiency. Those designed to improve effectiveness; and Those designed to facilitate transformation. • Efficiency: efficiency refers to doing things right. For example: an efficient office worker can update hundreds of documents per hour. An efficient information system can update thousands of employee records per minute. Etc., • Effectiveness: It refers to doing the right things. This means doing the things that need to be done to achieve improvement in business result for example; A prospect database housed on a PC may enable a sales managers to identify sales prospects with high potential and direct his staff‟s attention to contacting those prospects. • Transformation: Using IT to change the way we do business. This means changing the nature of the product or services being delivered or entirely transforming the way the business is done in functional unit or the whole organization. The information Age is characterized by the extensive use of global communication networks viz., internet, intranet, and extranet etc., have multiplied and the technology and tools of internet commerce have begun to transform industries in many fundamental ways. New ways to sell on the Internet, managing costs, Purchasing, production planning, supply chain management and organising work processes are the order of the day. The organisation of the 21st century is expected to be a learning organisation, networked organisation with completely decentralised methods of working and empowered work force with totally new reengineered work processes. Change, cost, competition and customer are the drivers of this information age. Evolution of E – Commerce The explosive & unprecedented growth of the Internet during the late 1990s has created the vision of e – commerce. E – Commerce as a revolution started in the year 1997 and first used by Dell Computers and IBM in 1997. E – Commerce is derived from such terms as e–mail and e – business. Thus, e – business is a goose that lay golden eggs and it would be of benefit to allow the goose to reach the egg laying stage. E – Business is comprehensive in essence, with the entire business being run using the internet, it includes buying, manufacturing, selling and managing both internal and external information required to run particular (potential) business. E – Commerce is the sub-set of E – Business. Few Definitions of E - Business “E – Business is the practice of performing and coordinating critical business processes such as designing products, obtaining supplies, manufacturing, selling, fulfilling orders, and providing services through the extensive use of computer and communication technologies and computerized data.” – Steven Alter. “ Electronic Business …., includes everything having to do with the application of information and communication technologies [ICT] to the conduct of business between organisations or from company to consumer” – Michael Wade and others. “ E – Business includes e – commerce but also covers internal processes such as production, inventory management, product development, risk management, finance, knowledge management, and human resources” – Bartels Andrew. IBM defines e – business as “ a secure, flexible and integrated approach to delivering differentiated business value by combining the systems and processes that run core business operations with the simplicity and reach made possible by internet. “E – Business is about using internet technologies to transform the way business processes are performed. Its most visible form is online purchasing, both wholesale and retail.” – Shurety Samantha “In its simplest sense, e – business is the use of Internet technologies to improve and transform key business processes. Most companies understand this and have begun the evolution from traditional business practices to e – business.” – www-3.ibm.com/e-business. “ E – Business: any Internet initiative - tactical or strategic – that transforms business relationships, whether those relationships be business–to- consumer, business–to-business, intrabusiness, or even consumer-to-consumer…, E – Business is really a way to drive efficiencies, speed, innovation and new value creation in an organisation.” - Hartman, Amir, John Sifonis, & John Kador. E – BUSINESS & E - COMMERCE E – Business is comprehensive in essence, with the entire business being run using the Internet. It includes buying, manufacturing, selling and managing both internal and external information required to run a particular business. While e – commerce is only a subset and branch of e – business, it is only a form of trading using electronic means to connect buyers and sellers who give a boost to any business category. The Internet provides the connectivity required for e-commerce. E-commerce is a generic name for a range of technologies that allow the exchange of information related to business transactions electronically. Internet commerce is the new terrain of e-business. The Internet is a global business platform for companies all over the world. E-commerce has become more than a buzz word in the global economy it has become a lifestyle for most businesses and has created a global marketplace. Definitions of E-Commerce The World Trade Organisation (WTO) has Defined E-Commerce as “the production, distribution, marketing, sale or delivery of goods and services by electronic means” IBM has defined E-Commerce to be “ the transformation of key business processes through the use of Internet technologies.” E-Commerce has been defined by the Organisation for Economic Cooperation and Development (OECD) to be “commercial transations, involving both organisations and individuals, that are based upon the processing and transmission of digitized data, including text, sound and visual images and that are carried out over open networks (Internet) or closed networks that have a gateway onto an open network.” these include electronically marketed products from business-to-consumer [B2C], which are „intangibles‟ such as travel and ticketing services, software, entertainment, banking, insurance and brokerage services, information services, legal services, real estate services, and increasingly health care, education and government services.” Thus, E-commerce refers to using the Internet, intranet, & extranet to link-up with suppliers, dealers, vendors, banks, customers and even government bodies to do business. They exchange information, build up mutual confidence negotiate rates, exchange quotes/quotations, places orders, confirms deliveries, send bills and at the same time makes payment over telephone wire/cable plugged into a computer. It also includes buying and selling over the world- wide-web and the Internet, electronic funds transfer, smart cards, digital cash, Mobile phone sets, SMS-services and all other ways of doing business over digital networks. E-commerce is really much more than just purchasing products or services over the Internet. Therefore, e-commerce is – An enabling technology that allows businesses to increase the accuracy and efficiency of business transaction processing: & – A way for organisations to exchange information with customers and vendors for the benefit of everyone involved. Limitation of traditional / conventional Business a) Conventional Business is Paper-based system manually processed and transmitted b) There are many associated delays like processing delays, ordering delays