electronic commerce session 6 15:00 - 15:30 dr. deepak b phatak iit bombay

ELECTRONIC COMMERCE

Session 6 15:00 - 15:30Dr. Deepak B Phatak

IIT Bombay

Dr. Phatak, IIT Bombay

Electronic Commerce 2

OVERVIEW

Dimensions Of E-Commerce Major Issues Underlying Technologies Notions Of Security SMARS Project at IIT



COMMERCE

Commerce– Activities Involved In Exchange of

Goods / Services On a Large Scale Business

– Carrying Out Commercial Activities Profitably



COMMERCE

Contracting Parties– Buyer And Seller

Intermediaries– Other Participants Facilitating

Commercial Transactions*Direct (Distributors, Retailers)

*Indirect (Banks, Regulators)



COMMERCE

Money Is A Valued Medium To Facilitate Transactions

Attributes Of Money– Wide acceptability

– Security, Anonymity

– Portability, Divisibility

– Durability, Interoperability



COMMERCIAL ACTIVITIES

Advertising, Marketing Contracting Business Deals

– Order Processing Payment Systems

– Instruments (Cheques, LoC) Supply Chain Management



DIMENSIONS OF ELECTRONIC COMMERCE

E-Commerce– Use Of Electronic Networked

Information Systems To Carry Out Commercial Activities

– Started with EDI




Facilitated By Internet Technologies

Current Focus on World Wide Web (WWW)

Communication Channel Between Buyer And Seller




Intra Business Business To Business Business To Individual Individual To Individual



ECOMMERCE FRAMEWORK

Policy,Legal,

PrivacyIssues

Technical Standards

ForDocuments

SecurityNetworkProtocols

ECOMMERCE APPLICATIONS

Common Business Services

Messaging & Info Distribution

Multimedia Content & Network Publishing Network



ECOMMERCE FRAMEWORK

Applications– Video On Demand

– Remote Banking

– Marketing, Advertisement

– Home Shopping

– Supply Chain Management



ECOMMERCE FRAMEWORK

Business Service Infrastructure– Security

– Authentication

– Electronic Payment

– Directories And Catalogues



ECOMMERCE FRAMEWORK

Messaging & Information Distribution Infrastructure– EDI

– E Mail

– Hyper Text Transfer Protocol

– Secure Protocols



ECOMMERCE FRAMEWORK

Content Infrastructure– HTML, CGI Scripts, Perl

– XML

– WWW, Java

– Site Hosting And Management



ECOMMERCE FRAMEWORK

Network Infrastructure– Telecom

– Wireless (Microwave, VSAT)

– Cable TV

– Internet, Intranets



ECOMMERCE FRAMEWORK

Standardisation– Proposal For OO Framework

– ECO System, CBL*Layer of Middle ware

*OO Development Environment

*Application “Agents”



Social vs.Technological acceptance

ECommerce Wave Is Just Beginning……...

0

20

40

60

80

100

120

TechnologyAdvances SocialAcceptance



Value chainValue chain

Direct Direct marketing, marketing, selling, and selling, and

servicesservices

Corporate Corporate purchasingpurchasing

Employee self-service purchasing Employee self-service purchasing from suppliersfrom suppliers

Online bill payment, investment Online bill payment, investment services, banking, and soft goodsservices, banking, and soft goods

CustomerCustomerserviceservice

DirectDirectsellingselling

Brand Brand developmentdevelopment

Financial and Financial and information information

servicesservices

Establish “direct” process linking Establish “direct” process linking with trading partnerswith trading partners

E-Commerce Scenarios



E-Commerce For Everyone

Value chainValue chain

Web sites that deliver Web sites that deliver resultsresults

Employee self-serviceEmployee self-service

Effective sites for small Effective sites for small businessbusiness

Better online shoppingBetter online shopping



SizeSize Online todayOnline today

50 50 million vehiclesmillion vehicles$700 billion car sales$700 billion car sales > 4%> 4%

4.2 4.2 million homes million homes $728 billion in loans$728 billion in loans < 1%< 1%

$189 $189 billion in billion in advertisingadvertising < 1%< 1%

Web Life Style:Still Early

200 200 million ticketsmillion tickets$180 billion on travel$180 billion on travel < 1%< 1%

AutomotiveAutomotive

TravelTravel

AdvertisingAdvertising

Real estateReal estateBankingBanking

2 Trillion2 Trillion < 1%< 1%RetailRetail



Consumer Orders for personal and household goods

Source: Inetco Research

1.5

4

6

13.3

0

2

4

6

8

10

12

14

1996 1997 1998 2001

•50% by Credit Card•Excludes Stock trades

($Billion)



U.S. Internet B2B revenues

Source: Forrester Research

327

183

105

41178

0

50

100

150

200

250

300

350

1997

1998

1999

2000

2001

2002

($Billion)



BUSINESS-TO-BUSINESS -

Extend Electronic Data Interchange (EDI) to the Internet– Apply EDI features to new application

environments

– Inter-operate with existing, new, and future information interchange systems

– Support new standards and associations



BUSINESS-TO-BUSINESS ------------------------------------

Conduct Transactions Cost-effectively– Scale Economies for Suppliers and

Buyers

– Integrate With Legacy Systems Full-featured Apps Enable More

Than Just Transactions



Trading Trading Partner Partner (EDI Gateway)(EDI Gateway)

Trading Trading Partner Partner (EDI Gateway)(EDI Gateway)

VANVAN

InternetInternet

Trading Trading Partner Partner (CIP)(CIP)

Trading Trading Partner Partner (Hosted CIP(Hosted CIP--Browser)--Browser)SignSign

EncryptEncrypt

MapMap

TransportTransportPost transport auditPost transport audit

InitializeInitialize

Pre transport auditPre transport audit

Verify signatureVerify signature

MapMap

DecryptDecrypt

App integrationApp integration

AuditAudit

InitializeInitialize

Receipt generateReceipt generate

Pre app auditPre app audit

Commerce InterchangeCommerce Interchange

Interoperation via XML:Commerce Interchange Pipeline

Platforms



Interoperation via XML:

Business to Business data interchange Transport and format independent XML/XSL for mapping



Create cost-effective Create cost-effective commerce sites and commerce sites and

applications, with targeted applications, with targeted online advertising and online advertising and

marketing, and personalizedmarketing, and personalizedpromotionspromotions

Conduct business online Conduct business online with secure and scaleable with secure and scaleable

order processing and order processing and integration with existing integration with existing

systems.systems.

Understand customer and partner Understand customer and partner purchases and usage to improve online purchases and usage to improve online

businessbusiness

E Commerce Requirements

AnalyzeAnalyze

TransactTransactEngageEngage

AnalyzeAnalyze

EngageEngage TransactTransact



MAJOR ISSUES

Business Transaction– Authentication

– Secure Transmission

– Non Repudiation

– Automatic Response (At least At One End)



UNDERLYING TECHNOLOGIES

Work Stations, Servers– Multimedia PC, Application, Web,

OLTP, IVR, Data Warehouse Internet

– Secure Protocols (SSL), XML, JAVA Intranets



REGULATORY ISSUES

Internet Regulations– Practically None

Banking Regulations– Overwhelming

– Compliance Monitoring



SMART CARDS AT IIT

SMArt Rupee System Launched In December 1998 ~1000 Cards, 25 Merchants ~Rs. 1.5 Crore Outlay Interface Standards For India



SMART CARDS AT IIT

Loading Station To Card Card To PoS Terminal Terminal To Host Host To Settlement System



PLANS

Recommend Indian Standards To RBI– Based On EMV, DES3 Security– Time Frame: May-June 1999

Continue Pilots For New Applications R&D For Future Applications

– Home Banking (Telephones, Terminals)– Reservation, Ticketing– Multi-Application Framework