ELECTRONIC COMMERCE Session 6 15: :30 Dr. Deepak B Phatak IIT Bombay

Dr. Phatak, IIT BombayElectronic Commerce2 OVERVIEW u Dimensions Of E-Commerce u Major Issues u Underlying Technologies u Notions Of Security u SMARS Project at IIT

Dr. Phatak, IIT BombayElectronic Commerce3 COMMERCE u Commerce –Activities Involved In Exchange of Goods / Services On a Large Scale u Business –Carrying Out Commercial Activities Profitably

Dr. Phatak, IIT BombayElectronic Commerce4 COMMERCE u Contracting Parties –Buyer And Seller u Intermediaries –Other Participants Facilitating Commercial Transactions *Direct (Distributors, Retailers) *Indirect (Banks, Regulators)

Dr. Phatak, IIT BombayElectronic Commerce5 COMMERCE u Money Is A Valued Medium To Facilitate Transactions u Attributes Of Money –Wide acceptability –Security, Anonymity –Portability, Divisibility –Durability, Interoperability

Dr. Phatak, IIT BombayElectronic Commerce6 COMMERCIAL ACTIVITIES u Advertising, Marketing u Contracting Business Deals –Order Processing u Payment Systems –Instruments (Cheques, LoC) u Supply Chain Management

Dr. Phatak, IIT BombayElectronic Commerce7 DIMENSIONS OF ELECTRONIC COMMERCE u E-Commerce –Use Of Electronic Networked Information Systems To Carry Out Commercial Activities –Started with EDI

Dr. Phatak, IIT BombayElectronic Commerce8 DIMENSIONS OF ELECTRONIC COMMERCE u Facilitated By Internet Technologies u Current Focus on World Wide Web (WWW) u Communication Channel Between Buyer And Seller

Dr. Phatak, IIT BombayElectronic Commerce9 DIMENSIONS OF ELECTRONIC COMMERCE u Intra Business u Business To Business u Business To Individual u Individual To Individual

Dr. Phatak, IIT BombayElectronic Commerce10 ECOMMERCE FRAMEWORK Policy, Legal, Privacy Issues Technical Standards For Documents Security Network Protocols ECOMMERCE APPLICATIONS Common Business Services Messaging & Info Distribution Multimedia Content & Network Publishing Network

Dr. Phatak, IIT BombayElectronic Commerce11 ECOMMERCE FRAMEWORK u Applications –Video On Demand –Remote Banking –Marketing, Advertisement –Home Shopping –Supply Chain Management

Dr. Phatak, IIT BombayElectronic Commerce12 ECOMMERCE FRAMEWORK u Business Service Infrastructure –Security –Authentication –Electronic Payment –Directories And Catalogues

Dr. Phatak, IIT BombayElectronic Commerce13 ECOMMERCE FRAMEWORK u Messaging & Information Distribution Infrastructure –EDI –E Mail –Hyper Text Transfer Protocol –Secure Protocols

Dr. Phatak, IIT BombayElectronic Commerce14 ECOMMERCE FRAMEWORK u Content Infrastructure –HTML, CGI Scripts, Perl –XML –WWW, Java –Site Hosting And Management

Dr. Phatak, IIT BombayElectronic Commerce15 ECOMMERCE FRAMEWORK u Network Infrastructure –Telecom –Wireless (Microwave, VSAT) –Cable TV –Internet, Intranets

Dr. Phatak, IIT BombayElectronic Commerce16 ECOMMERCE FRAMEWORK u Standardisation –Proposal For OO Framework –ECO System, CBL *Layer of Middle ware *OO Development Environment *Application “Agents”

Dr. Phatak, IIT BombayElectronic Commerce17 Social vs.Technological acceptance ECommerce Wave Is Just Beginning……...

Dr. Phatak, IIT BombayElectronic Commerce18 Value chain Direct marketing, selling, and services Corporate purchasing Employee self-service purchasing from suppliers Online bill payment, investment services, banking, and soft goods Customer service Direct selling Brand development Financial and information services Establish “direct” process linking with trading partners E-Commerce Scenarios

Dr. Phatak, IIT BombayElectronic Commerce19 E-Commerce For Everyone Value chain Web sites that deliver results Employee self-service Effective sites for small business Better online shopping

Dr. Phatak, IIT BombayElectronic Commerce20 Size Online today 50 million vehicles $700 billion car sales > 4% 4.2 million homes $728 billion in loans < 1% $189 billion in advertising < 1% Web Life Style:Still Early 200 million tickets $180 billion on travel < 1% Automotive Travel Advertising Real estate Banking 2 Trillion < 1% Retail

Dr. Phatak, IIT BombayElectronic Commerce21 Consumer Orders for personal and household goods Source: Inetco Research 50% by Credit Card Excludes Stock trades ($Billion)

Dr. Phatak, IIT BombayElectronic Commerce22 U.S. Internet B2B revenues Source: Forrester Research ($Billion)

Dr. Phatak, IIT BombayElectronic Commerce23 BUSINESS-TO-BUSINESS - u 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

Dr. Phatak, IIT BombayElectronic Commerce24 BUSINESS-TO-BUSINESS u Conduct Transactions Cost- effectively –Scale Economies for Suppliers and Buyers –Integrate With Legacy Systems u Full-featured Apps Enable More Than Just Transactions

Dr. Phatak, IIT BombayElectronic Commerce25 TradingPartner (EDI Gateway) TradingPartner VAN InternetTradingPartner(CIP)TradingPartner (Hosted CIP (Hosted CIP--Browser) Sign Encrypt Map Transport Post transport audit Initialize Pre transport audit Verify signature Map Decrypt App integration Audit Initialize Receipt generate Pre app audit Commerce Interchange Interoperation via XML: Commerce Interchange Pipeline Platforms

Dr. Phatak, IIT BombayElectronic Commerce26 Interoperation via XML: u Business to Business data interchange u Transport and format independent u XML/XSL for mapping

Dr. Phatak, IIT BombayElectronic Commerce27 Create cost-effective commerce sites and applications, with targeted online advertising and marketing, and personalized promotions Conduct business online with secure and scaleable order processing and integration with existing systems. Understand customer and partner purchases and usage to improve online business E Commerce Requirements Analyze Transact Engage Analyze EngageTransact

Dr. Phatak, IIT BombayElectronic Commerce28 MAJOR ISSUES u Business Transaction –Authentication –Secure Transmission –Non Repudiation –Automatic Response (At least At One End)

Dr. Phatak, IIT BombayElectronic Commerce29 UNDERLYING TECHNOLOGIES u Work Stations, Servers –Multimedia PC, Application, Web, OLTP, IVR, Data Warehouse u Internet –Secure Protocols (SSL), XML, JAVA u Intranets

Dr. Phatak, IIT BombayElectronic Commerce30 REGULATORY ISSUES u Internet Regulations –Practically None u Banking Regulations –Overwhelming –Compliance Monitoring

Dr. Phatak, IIT BombayElectronic Commerce31 SMART CARDS AT IIT u SMArt Rupee System u Launched In December 1998 u ~1000 Cards, 25 Merchants u ~Rs. 1.5 Crore Outlay u Interface Standards For India

Dr. Phatak, IIT BombayElectronic Commerce32 SMART CARDS AT IIT u Loading Station To Card u Card To PoS Terminal u Terminal To Host u Host To Settlement System

Dr. Phatak, IIT BombayElectronic Commerce33 PLANS u Recommend Indian Standards To RBI –Based On EMV, DES3 Security –Time Frame: May-June 1999 u Continue Pilots For New Applications u R&D For Future Applications –Home Banking (Telephones, Terminals) –Reservation, Ticketing –Multi-Application Framework