1) Framework of E-Commerce

2) Electronic data interchange

(EDI)

Lesson - 2

FRAMEWORK OF

ECOMMERCE

Describe the framework of E-Commerce

building blocks of E-Commerce

various functions of E-Commerce

Learning objectives

Framework of E-commerce

The E–Commerce Core consisting of basic infrastructure which will enable the e-commerce activities:

• Business applications

• Services Enabling Infrastructure

• Content Development Deployment and Distribution Infrastructure

E-commerce Core

CONTENT DEVELOPMENT DEPLOYMENT AND DISTRIBUTION INFRASTRUCTURE:

This layer will include all hardware and network infrastructure that will act as physical infrastructure to enable e–commerce transactions. This will include:

Content Development Infrastructure: • Multimedia Publishing Infrastructure (to create multimedia contents for business applications)

• Multimedia Storage Infrastructure (to provide for efficient and organized storage facilities for efficient and quick retrieval and deployment of multimedia contents)

• Multimedia Deployment Infrastructure (to search and retrieve multimedia contents from storage locations)

CONTENT DEVELOPMENT DEPLOYMENT AND DISTRIBUTION INFRASTRUCTURE: 

Distribution Infrastructure • Network Access Device Infrastructure (independent and internally controlled by merchants and consumers)

• Infrastructure installed by Network Service Providers (includes Local service providers, National Data and Information Carriers, Third-party Value Added Networks and other Network Service Providers)

• GlobalInformation Delivery Networks(includes satellite networks, sub-marine cables, fiber networks, and other such networks forming backbone of global communication networks)

SERVICES ENABLING INFRASTRUCTURE:

This layer will include all vendors and other parties engaged in the business activities:

The list of such business activities may include following:1. Securing Business Transactions by providing hardware and software

2. Development of secure Electronic Payments Fund Transfer systems

3. Third-party verification and authentication services

4. Developing standards and formats for content creation, distribution and deployment (this includes development of multimedia formats, conversion software, software development kits, development of standards and protocols for data transmission, and other such infrastructure)

5. Development and deployment of technologies of different media (this includes coverage of content, transmission technologies and information access devices.

6. Offline Support Services

BUSINESS APPLICATIONSThis layer corresponds to the real business transactions. Following are the common business applications:

• Online Education and Learning

• Online Marketing Communication and Promotion

• Online Shopping, E-procurement and e-purchasing

• Online Gaming, news and bulletin boards.

• Online Customer Feedback and Satisfaction Surveys

• Online Research

• Online Retailing and Sales

• E-Auctions, E-publishing

• Online Stock Trading and Brokering

• Online Entertainment

• Digital Video and Animation

• Online Banking Services (including ATM networks)

• Online knowledge and information processing

Issues involved in E-commerce

Financial issues

Legal & regularity issues

Network protocol

& technical issues

Cultural issues

Market access

Ecommerce core

Financial Issues • Customs and Taxation • Electronic Payments and Fund Transfers

Legal and Regulatory Issues • Uniform Commercial Code – IT act , transactions B2B/B2C, e- governance transactions, govt to citizen & citizen to govt. • Property Protection • Privacy • Security, Confidentiality and Integrity • Protection of Consumer Rights and Interests • Content Liability • Dispute Resolution and Jurisdiction Market Related Issues • Market Development Stage • Competition • Customer Orientation • Trust and Reliability

Network Protocols and Technical Standards • Transmission Protocols and Standards • Multimedia Formats • Hardware Standards • Backward and Forward Integration of Hardware and Software • Documentation Specifications • Compatibility • Acceptability of Standards Socio-cultural Issues• Economic Appeal• Attitude towards e–commerce• Usability • Lifestyle• Demographics of Target Market• Purchase potential• Social and Religious Dynamics

ELECTRONIC DATA INTERCHANGE

EDI

14

EDI: Electronic Data Interchange , means a way to exchange standard documents in inter organisations. OR

• EDI is the electronic exchange of business documents in a standard, computer processable, universally accepted format between trading concerns

• EDI used to transmit financial information and payments in electronic format.

Electronic documents: • Purchase order• Invoices• Shipping notices• Quotations

15

Accounts payable

Purchasing

Accounts receivable

Order processing

EDI- procurement process

Request for quote

quote

Purchase order

Purchase order acknowledgement

Status request/ Response

Shipping notice

Invoice

Payment Remittance advice

Business Application at Buyers computer

Business Application at Seller’s computer

Advantages/Benefits/Uses of EDI:

1) Cost & Time Saving: It saves time & cost in terms of creating manual business documents. 2) Relationship: Business relations with trading partners and customers improved through better quality and Speed of services.  3) Manpower: It reduces manpower due to predefined standard format i.e. EDI is totally integrated with application program (EDI Standards) which automate transaction of business documents. For e.g. Order processing/Invoicing/job orders/Billing etc.  4) Decision-making: It provides better information for management to take decision in time. It helps in business planning and budgeting at the right place and time.  5) Competition:Competition can be maintained and improve the business goodwill.

Disadvantages of EDI:  1) High installation cost: Cost of implementing EDI in an organization is more 2) Not suitable for all customers: It is difficult to have EDI system with various customers of a firm  3) Third party: Risk of misuse of communicating financial data by third party. 4) Less transparent than paper-based systems: EDI involves standard predefined format to exchange business documents so it gives clear information.  5) Knowledge based employees needed: Only qualified and trained employees can work on the EDI system.

Requirements/components of EDIEDI Standards 2) EDI Software 3) Third party networks  

EDI Standard: It is a common or predefined format used to exchange data between two organizations or two business applications.

Popular standards are: • UCS-Uniform Communication Standard • TDI-Trade Data Interchange, • UN/EDIFACT-United Nations EDI for Administration Commerce & Transport etc.

Code Message Name

APERK Application error and acknowledgement

AUTHOR Authorization

BANSTA Banking status

BOPCUS Balance of payment customer transaction report

COMDIS Commercial Dispute

CUSRES Customs response

SATAC Statement of account

WKGRE Work grant request

2) EDI Software: It consists of computer instruction that translates

the information in an unstructured format to company specific EDI

format. EDI translator with message handling system is used to

translate the information.

EDI software receives the message and translates from standard

format to company specific format.

EDI software contains EDI translator with a message handling

system (x.440/x.435) MHS

3) Third Party Networks (Value Added Networks -VAN): Third party networks are called value added networks because EDI documents are electronically exchanged over communication networks those connect trading partners to one another. These documents are stored in user mailboxes on the network's EDI server and from this server the documents can be downloaded or uploaded at the user's convenience.  Value added network is defined, as "It is a telecommunication network, primarily for data exchange that processes or transfers data/information in same way"  Functions of VAN: • It creates communication between trading partners• It transfer and exchange data/information • It provides security and authentication that we can't expect from Internet. • It provides acknowledgement system (notifications, delivery and non

delivery reports) • It has standard formats to exchange data.

Thank you