E-Commerce

Areas Definitions Needs Technical Infrastructure History Benefits Limitations Security

Definitions New way of conducting business – electronically using networks and the Internet Networked communications is the infrastructure Kalakota and Whinston (1997) define EC from these perspectives: –Communications perspective –Business process perspective –Service Perspective –Online perspective

Definitions Communications perspective –Delivery of information/products/services over telephone lines, computer networks or any other electronic means Business process perspective –Application of technology toward the automation of business transactions and work flow

Definitions Service Perspective –Tool that addresses the desire of firms, consumers, and management to cut service costs –While improving the quality of goods and increasing the speed of delivery Online perspective –Provides the capability of buying and selling products and information –On the internet and other online services

Definitions Turban (2002) adds Collaborations Perspective –The framework for inter and and intraorganisational collaboration Community Perspective –Provides a gathering place for community members to learn, transact, and collaborate

E Commerce IT has become the major facilitator of business Networked Computing - Business transactions take place via telecommunication networks –Business-to-customer (B2C) –Business-to-business (B2B) –Consumer-to-business (C2B) Most popular platforms –Internet/Intranet/extranet

Internet, Intranet and Extranet Internet –Public and global communication network that provides connectivity to anyone over a LAN or ISP –Public network that is connected and routed over gateways –Most common platform for B2C EC –Lack of control that may result in an unruly proliferation of information –Need effective and efficient search engines to navigate

Intranet –Corporate LAN or WAN –Uses internet technologies (TCP/IP) –Secured behind firewall (access control server) –Links various servers, clients, databases and application programs –Most common platform for corporate internal management –Used to enhance the communication and collaboration among authorised Employees Customers Suppliers Business partners

Extranet Extranet (extended intranet) –Links intranets in different locations –Link using the internet –Improvement of security of connection portions of the internet required –Done using cryptology and authorisation algorithms (tunneling technology) –The internet with tunneling technology is known as virtual private network (VPN) –Most common platform for B2B EC –Provide connectivity between an organisation and business partners, materials suppliers, financial services, government and customers –Allows companies to collaborate, share and exchange information

Needs for E Commerce Supporting information Organisational infrastructure –People –Policy –Technical standards and protocols –Network infrastructure –Interfacing infrastructure Systems Applications

Systems Electronic data interchange (EDI) Extranets Electronic Funds transfer (EFT) Electronic Payment Systems Electronic forms Integrating messaging Shared Databases

Applications More than just a website –Home banking –Online shopping –Buying stocks –Finding a job –Conducting an auction –Collaborating electronically

History Early 1970s –Limited to large corporations 1990’s –Rapid growth of internet –Dependibility of networks –Development of protocols/software/specifications –Rapid expansion in EC – telecommunication applications Late 1990’s –Innovative applications –Advertisement to auctions to virtual reality experiences –Dramatic increase in business web presence

Benefits to Organisations Expands the marketplace Decrease cost of distributing information Can provide competitive advantage Initiates business process reengineering Improved image, customer service.

Benefits to Consumers Shop/other transactions 24 hours a day form any location Provides more choice Frequently provides less expensive products Receive information in seconds Participate in virtual auctions Interact with other communities in electronic communities Facilitates competition, which results in substantial discounts

Benefits to Society Enables individuals to work from home –Less traffic, lower air pollution Less affluent people can buy more and increase their standard of living Enables Third World countries/rural areas to enjoy products and services (college degrees) Anything else?

Limitations - Technical Lack of system security, reliability, standards Insufficient telecommunication bandwidth Software development tools evolving and changing rapidly Difficult to integrate internet and EC software with some existing applications and databases Some EC software might not fit with some hardware, or may be incompatible with some operating systems

Limitations - nontechnical Cost and Justification Lack of trust and user resistance Other Limiting factors –Legal issues –Evolving –Profitibility –Human relationships –Expensive.

Internet Security Often sites as the major barrier to EC National Computer Security Association (NCSA) has identified 4 cornerstones of secure EC Authenticity –is the sender who they claim to be –TCP/IP uses password -Passwords can be intercepted –IP addresses can also be screened to prevent unauthorised access –IP Spoofing – hacker can send a message that appears to come from a particular domain

Internet Security Privacy –Breaches of privacy can occur both during and after transmission –Transaction log –Cookies Integrity –Have the contents of a message been mofified during transmission –Data packets are susceptible to capture and modification while en route –Example: a hacker might modify the address where the contents of a web form will be submitted. The user might fill in a credit card number on a form, click Submit and unknowingly transmit the information to the hackers server.

Internet Security Nonrepudiation –Can the sender of a message deny that they actually sent a message? –The key here is a “signature” that makes it difficult to dispute In short, securing an EC site requires that the cornerstones be secured –Privicy of data and messages must be protected –Identities must be verified and verifiable –Unauthorised access must be controlled Ensuring security of an EC site is extremely complex task