1. E-commerce applications
Luisa Calcagno
Course of Software Engineering 2
May 29th 2002

2. Plan of the talk
Introduction to e-commerce and e-commerce applications
Issues in developing e-commerce applications
Architecture of e-commerce applications
Bookstore example
Perspectives for e-commerce
References

3. A definition for e-commerce
A universally accepted definition does not exist
Anything that uses electronic technology in order to do business can be intended as e-business
We can look at e-commerce as to a subset of e-business concerning commerce
Commerce is intended as the activity of exchanging goods and services with some kind of payment
A volte si usa (impropriamente) e-business per indicare e-commerce

4. The EU definition for e-commerce
“e-commerce is based on the electronic processing and transmission of data. It encompasses many diverse activities including electronic trading of goods and services, on-line delivery of digital content, electronic fund transfer, electronic share trading, public procurement.” (EU(97)/157)
On-line delivery of digital content: consegna on-line di prodotti digitali (es. un libro in formato .pdf, un video mpeg etc.)
Electronic fund transfer: operazioni bancarie (trasferimento soldi)
Electronic share trading: operazioni di borsa (acquisto di quote, azioni, etc)

5. Origins of e-commerce applications
E-commerce applications existed long before Internet
EDI (Electronic Data Interchange)
EFT (Electronic Funds Transfer)
Internet offered the general public the opportunity to conduct businesses online
EDI e EFT erano fatte soprattutto per le aziende
Internet permette a tutti di condurre affari elettronicamente

6. Taxonomy of e-commerce applications
Three main categories:
Business to consumer (B2C)
Business to business (B2B)
Consumer to consumer (C2C)
Other categories:
Business to government (B2G)
Mobile Commerce

7. B2C applications
Offer directly to the customer an interface of activity
Typical examples:
Online book store (e.g. amazon.com)
Online car purchasing (e.g. automall.com)
Booking and purchase of airline tickets (e.g. ryanair.com)
Correspond to retail sale
Growth of B2C applications thanks to Internet
A new kind of B2C applications are the Cybermalls
Retail sale = vendita al dettaglio( caratterizzato dall’acquisto diretto di prodotti o servizi dell’attività da parte del consumatore)
Automalll.com un sito che consente ai propri utenti discegliersi comodamente da casa il colore dell’ automobile,gli accessori dell’automobile,i pezzi di ricambio
Cybermalls = centri commerciali virtuali

8. B2C applications: advantages and disadvantages
Allow company to extend existing services to customers
Allow company to increase its customers
Offer a wider choice and allow cheaper prices
May give to the company a worldwide visibility
Online shops are accessible 24h a day
Disadvantages:
Low order conversion rates
High risk (see Cyberphobia)

9. B2B applications
Realize transactions needed to perform financial or commercial activities by companies over the Internet
Some typical applications:
E-procurement
E-Marketplace
The turnover is much greater than that dealed with B2C applications
Turnover = volume di affari

10. B2B applications: advantages and disadvantages
Help to automate communications between companies making them easier and quicker
Allow to cut prices drastically
Help in reducing mistakes
Disadvantages:
Often need legacy integration
Prezzi ridotti non solo per la riduzione della manodopera ,ma anche se uno aveva la rete privata tipo edi il passaggio a internet ha dimiuito le spese di manutenzione della rete .

11. C2C applications
Concern the consumers who run negotations with other consumers sometimes utilizing as intermediary a company
Examples:
Ebay
Autotrader.com
Le società intermediarie devono trovare altri flussi di entrate non tradizionali che possono essere una piccola tassa sul servizio o una pubblicità o combinazioni di entrambe le cose

12. C2C applications: advantages and disadvantages
Allow consumers to interact directly among them
Give to the consumers a new way of purchasing and selling services and goods
Disadvantages
Little earning capacity

13. B2G applications
Correspond to all kind of transactions between company and public administrator
Utilized mostly in the USA
Le richieste di fornitura vengono pubblicizzate su internet e le imprese possono rispondere per via elettronica

14. Mobile commerce applications
Concern doing businesses by means of mobile wireless devices
Can be both B2B and B2C
Have a growing importance in the future of e-commerce applications
Will introduce completely new forms of electronic commerce
E.g. E-tickets
The development of such applications faces some of the greatest challenges in the security area to secure the trust of consumers

15. Plan of the talk
Introduction to e-commerce and e-commerce applications
Issues in developing e-commerce applications
Architecture of e-commerce applications
Bookstore example
Perspectives for e-commerce
References

16. Issues in developing e-commerce applications (1/2)
Many of the following issues:
Security
Flexibility
Scalability
Fault tolerance
Integration
Interfaces (graphical and not)
Time-to-market
are common to many applications, but they are all critical in the case of e-commerce because of its nature

17. Issues in developing e-commerce applications (2/2)
A state-of-the-art application always fail if people do not utilize it
A constant attention must be payed to the users over the whole development process
A close integration with every business aspect is needed:
For an online buyer security and easy access to the informations are the primal needs
A manager will need a flexible application to adapt the business to the new trends in a faster way

18. Security Issues Security is a crucial feature
Most transactions take place in a fully automated way
Restricted data are transmitted through a public network
Users must be sure that their money will not be lost or stolen

19. Flexibility Issues
E-commerce systems are subject to frequent structural changes because of mutations of:
Products and services provided by the firm
Commercial partnerships

20. Scalability
Capability to support a certain number of users (thousands, even millions) without compromising performances
It is important because a slow application often means to lose customers (especially in B2C) since they have very small patience

21. Fault tolerance
A less fault-tolerant application will be less available to the user
Every minute that a site is not available costs 1400$ to the company (survey on 400 major companies by Oracle)
It is easy to lose customers forever
It is necessary to redirect the users without they perceive it

22. Integration
Always needed since no application offering every commercial functionality can be realized
Critical because the commercial funcionalities are often realized by many different legacy and third-party applications
Examples:
ERP systems
Legacy systems

23. User Interfaces
Must be intuitive,easily comprehensible and of simple utilization
In the case of B2C must support profiling in order to anticipate the customer requests
They also need to be customizable
Bisogna tenere conto del fatto che chi usa le interfacce non è un esperto di informatica

24. Multi-channel interfaces
Application interfaces must support several kinds of connections:
Web browsers
Web TV
Cellular phones (via WAP)
PDA

25. Time-to-market Has greater importance than elsewhere
Emphasis on COTS and reuse

26. Plan of the talk
Introduction to e-commerce and e-commerce applications
Issues in developing e-commerce applications
Architecture of e-commerce applications
Bookstore example
Perspectives for e-commerce
References

27. Two-tier Architecture (client server)
Data reside on a server
Business logic and user interfaces reside on clients
Drawbacks :
Clients sustain the main load and consequently result to be monolithic and heavyweight
Excessive overhead
Simple but unsuitable for e-commerce applications

28. Three-tier architecture
Separates the business logic of the application from user interfaces and from data access
Middle tier can be furtherly divided
In this case we call it multi-tier architecture:
Easier to modify one component
Lower cost to deploy and maintain
Middle-tier risiede la business logic

29. Three-tier architecture

30. Application server
Software that runs on the middle tier of a three-tier environment
In multi-tier environments it is often a distributed and complex software
Commercial implementations exist:
Microsoft Commerce Server 2000
Sun iPlanet
IBM WebSphere Application Server

31. Application Server-based e-commerce platform architecture
ERP
Presentation
Layer
Business
Logic Layer
Data & Legacy
Access Layer
Legacy
systems
Transactions
Security
Session
Resource
Pooling
Load
balancing
Database
Horizontal Services
Application Server
Client tier
Server tier
Data tier

32. Example: iPlanet architecture
EJB permette di realizzare i servizi necessari e la logica di applicazione in maniera distribuita
Microsoft Commerce Server nel Business Logic usa COM+

33. Plan of the talk
Introduction to e-commerce and e-commerce applications
Issues in developing e-commerce applications
Architecture of e-commerce applications
Bookstore example
Perspectives for e-commerce
References

34. Domain Model

35. Use Case Model

36. Plan of the talk
Introduction to e-commerce and e-commerce applications
Issues in developing e-commerce applications
Architecture of e-commerce applications
Bookstore example
Perspectives for e-commerce
References

37. Future Perspectives (1/2)
“Electronic commerce is going to reduce a lot of overhead in the economy”
“It will allow a purchase order to go from being about a $75 cost to about $10”
“if you had to pick who's the big winner in all of this, you'd definitely have to pick consumers”
“It lets you go out to the Internet and look at products and services of every kind, that never would have been available through traditional distribution channels”
(Bill Gates at the White House Conference on the New Economy, April 2000)

38. Future Perspectives (2/2)
In spite of Bill’s words, people still lack trust in e-commerce
However, in Europe there is a strong tendency towards the acceptance of Mobile Commerce
EITO (European Information Technology Observatory) 2002 highlights the growing importance of Mobile Commerce (see next page)

39. Trends in Mobile Commerce for the EU Markets: entertainment
Dati su applicazioni di divertimento (la più grossa fetta di mercato)

40. Trends in Mobile Commerce for the EU Markets: banking and finance
Servizi bancari forniti in Mobile (dati fino al 2002, previsioni fino al 2006)

41. Worldwide TLC markets by region

42. Plan of the talk
Introduction to e-commerce and e-commerce applications
Issues in developing e-commerce applications
Architecture of e-commerce applications
Bookstore example
References

43. References (1/4)
Introduction to e-commerce and the development of e-commerce applications:
Professional Java E-Commerce, M.Kerzner et al., Wrox Press, 2001
EU definition for e-commerce:
“A European Initiative in Electronic Commerce – Communication to the European Parliament, the Council, the Economic and Social Committee and the Committee of the Regions” (COM(97)/157)

44. References (2/4) Electronic Data Interchange:
Intodruction to EDI, vv.aa. ,DevEdge online
Cyberphobia and trends in e-commerce:
Application Servers:
Introduction to iPlanet Application Server Architecture, Robert Schulteis, Sun Microsystems, 2002

45. References (3/4) Platforms for e-commerce:
Building Applications in the Net Economy, Netscape Communications Corporation White paper, 1997
Architectures for e-commerce:
Architetture, tecnologie e modelli funzionali nell’e-commerce, Castrogiovanni, Magliano, Sciarappa, Notiziario tecnico Telecom Italia, December 2001
Statement of Bill Gates
The White House Conference on the New Economy April 5, 2000

46. References (4/4) E-procurement and e-marketplaces:
E-procurement white paper, Digital Union 2001 (
European Information Technology Observatory (EITO):
The Bookstore example:
UML for E-Commerce, Doug Rosenberg

47. The End

48. Electronic Data Interchange (EDI)
Electronic exchange of
Business documents
Business data
In a standard format (ANSI X12,EDIFACT)
Established between 1968 and 1975 in the transportation industries (U.S.)
Application-to-application communication without human intervention

49. Electronic Funds Transfer (EFT)
The banking equivalent of EDI
Denotes the transfer of :
Electronic checks
Customer accounts
Payment informations
in automated way

50. Order conversion rates
Defined as:
# of orders / # of contacts
By month or year, four-month periods, etc.
Measure the capability of a certain B2C application to convert an user into a buyer
A survey carried out in August 2000 showed that order conversion rates in USA were of 1.9% (Boston Consulting Group and Shop.org)
1.9% è un dato irrisorio
Si riferisce al secondo quadrimestre del 2000

51. E-procurement applications (1/3)
Automate enterprise purchasing processes, i.e. perform all of the activities related to generating an order on the buyer’s side
Purchased goods can be :
Direct goods (critical items in the supply chain)
Indirect goods (MRO –Maintenance Repair and Operations - such as office items)

52. E-procurement applications (2/3)
Automating procurement of indirect goods can dramatically reduce costs since:
Lessens maverick buying
Reduces supplier response time

53. E-procurement applications(3/3)
4. Purchase order is electronically placed
3. Order approvation compliant to company standards and procedures
2. Purchase request is performed by employees via a Web interface
5. Order is fulfilled by the supplier
Indirect goods e-procurement
1. Product selection from available catalogues
6. Product delivery
8. Payment request
electronically forwarded
7. Product receipt

54. E-marketplace
An environment that brings buyers and sellers together in a virtual space for e-commerce, enabling them to reach new customers and reduce transaction costs
E-marketplaces are becoming more fashionable

55. Cybermalls Include more virtual shops
Appear as web portals with links to single e-shops grouped by different product categories (e.g. music or books)
Advantages for smaller businesses:
Reduced initial investment
Easily traceability through the mall’s brand

56. Presentation Layer
Its purpose is to provide a user interface to the end user of the application
Controls the look-and-feel of the application and responds to user events
Serves actually as the front-end of the application

57. Business Logic Layer The heart of the application itself
Contains the business rules and /or processes
Its components link between presentation and data/legacy layers

58. Data & Legacy access Layer
Its purpose is to give to the business logic components access to backend data sources such as:
Databases
ERP systems
Other custom systems

59. Horizontal services
Services provided by the application server by means of an underlying technology (CORBA, EJB, COM,etc.)
Typical services:
Transactions
Security
Session Management
Resource pooling
Load balancing and fail over

60. Session Management
Mantains the correlation among requests generated by the same user
Usando HTTP non si può tenere traccia dello stato di una certa operazione
Per questo motivo c’è bisogno di un servizio di session management
Esempio: per tenere traccia del contenuto del carrello

61. Resource Pooling
Caching the instances of used resources (e.g. database connections) improves performances
Connessione al database è un’operazione lunga il caching di una connessione velocizza l’applicazione

62. Load Balancing and Fail Over
Make possible to distribute incoming requests
Handle clients reconnection in the case of system crash

63. Cyberphobia and the .com crash
“Cyberphobia” is the market’s irrational fear of the Internet due to the several bankruptcies occured in the past years
B2C represent 75% of bankruptcies
Internet shutdowns
Jan-Apr
Source:Webmergers.com