e-Commerce

Presented by Kerem SARIOGLU

e-Commerce• Definition

• Types of e-Commerce

• History

• Electronic Data Interchange (EDI)

• The choice of the technology: the Internet

• Challenges & Difficulties

• e-Commerce strategies

• The change in business practice

• Future trends of the e-Commerce

Definition • Conducting of business communication

and transactions over networks and through computers.

• Electronic commerce is the buying and selling of goods and services, and the transfer of funds, through digital communications.

• EC also includes all inter-company and “intra-company functions” (such as marketing, finance, manufacturing, selling, and negotiation)

e-Commerce

e-Commerce

• Business to BusinessOver 30 years

• Business to Consumer

• Consumer to Consumer

Types of e-Commerce

History

• Exchange of data across network.• Interorganizational data exchange.• Electronic Data Interchange EDI• Increasing standardization of EDI• Electronic Markets (Nasdaq)• Public Protocols, public network infrastructures:

Value Added Networks VAN, Internet• Internet Commerce

e-Commerce

e-Commerce

Definition:

“A series of standards which provide computer to computer exchange of business documents over interorganizational or intraorganizational networks”

• Purchase orders• Shipping documents• Invoices• Invoice payments

EDI - Electronic Data Interchange

e-Commerce

• Motives:– To increase efficiency in order processing– To reduce costs (just in time)– Greater ability to customize products and services– Competitive advantage (In 1980’s)

Sabre airline booking system

• Early adoptions are very proprietary:– Private Networks are very limited and close systems– Put into place by dominant firms– Only very large firms can afford it.

EDI

e-Commerce

• ANSI ASC X12– American National Standards Committee

• Accredited Standards Committee (1979)

• UN/EDIFACT– International Standards settings under the

United Nations.

EDI Standard Formats

Example of EDI Systeme-Commerce

Local Store Main Office

Suppliers

1. A Sale transaction information is stored into a local store information system

2. The sale info is distributed to the Main Office

3. Main office’IS finds out theneed of inven-tory of each store

4. Main office IS sends a purchase order to the suppliers’ IS

5. Suppliers fill the order, sending directly to the store

e-Commerce

• Exchange business documents with one or two trading partners:

• To be connected to an electronic market via a VAN

Connection ?

Customized Network Solutions

Value AddedNetworks VAN

VAN:A privately owned network that provides a specific service, such as legal research or access to a specialised database,for a fee.

e-Commerce

e-Commerce

WHY?

The Choice of Technology:The Internet

Other Choices

• VAN’s (IBM Global Network)• Dial Up Connections (Teletel-France)

e-Commerce

• Global connectivity at very low cost

• Reduced transaction costs and delivery time

• Easy data collection

• Easy and fast customer support

• Allow bypassing intermediaries

The Choice of Technology:The Internet Why?

e-Commerce

• Management Challenges– Organizational Changes– The applicability of a business model on the

Internet for the company– Centralization or Decentralization

• Technical Challenges– Security– Speed

Difficulties & Challenges

e-Commerce

– SSL - Secure Socket Layer– DC - Digital Certificate– SET - Secure Electronic Transaction– PCT - Private Communication Technology– Firewall– Digital Signature– For B2B e-commerce VPI - Virtual Private

Internet

Security Solutions

e-Commerce

• A product to offer• A web site

– Professional look– Rich content

– Build it– Buy it– Borrow it– Buddy-up (Partner)

– User friendly– Speedy download– Integrated with off-line

business

The Needs to Conduct e-Commerce on the Internet

e-Commerce

• An internet service provider (ISP)• A Domain name• A Web host• Web tools – Software

– A professional e-mail program– Auto responders– A text editor , A macro program– Graphic Programs & Html editor– Shopping cart System & secure purchase with credit card– Search engine submission software– Web position analyzer software

Needs to conduct e-Commerce on the Internet (Cont’d)

e-Commerce

• The Magnet EffectThe new way of selling; Build an audience and then look for something to sell.

• Spiral MarketingTo keep the audience attraction:– Use passive media– Use the Web site– Use e-mail

• Domino EffectA way to predict when technology trends will impact your business

Surviving Marketing Strategies in e-Commerce

e-Commerce

• Faster Access

• High Security

• More Customization

• Extranet

The Future Trends of the e-Commerce

e-Commerce

QUESTIONS?