ELECTRONIC BUSINESS- ELECTRONIC COMMERCE May - 2013

1. Skaggwa@ E-Business 2013 ELECTRONIC BUSINESS- ELECTRONIC COMMERCE May - 2013

2. Skaggwa@ E-Business 2013 The Me SamsKaggwa S Contact =0772-401794 Email =skaggwa@technology.ucu.ac.ug BBC 3 2013 SEMESTER 1 2

3. Skaggwa@ E-Business 2013 Reference Books Internet technology and e-commerce by Alison Cawsey and Rick Dewar. • Shaw M, et al : Handbook of Electronic Commerce Berlin, 2000 • Cunninghum P : The Electronic Commerce Revolution; Opportunities and challenges Berlin, 1999 • [Sch2004] Schneider, Gary, P., “Electronic Commerce: The second wave”, Thomson Course Technology, Fifth Annual Edition, 2004 • Awad, Elias, M., “Electronic Commerce: From Vision to Fulfillment”, Second Edition, Prentice Hall, 2004 • [3] APACS, “Cheque and Credit Clearing Company”, 2000. Online document available at www.apacs.org.uk/about_apacs/htm_files/chequecred.htm • [NSW] NSW Department of State and Regional Development, “Brief on Electronic Commerce”, http://www.smallbiz.nsw.gov.au/textonly/issues/technology/brief/index.html • [FordW] Ford, Warwick, “Secure Electronic Commerce: Building the Infrastructure for Digital Signatures and Encryption (2nd Edition), pp. 1, 2000

4. Skaggwa@ E-Business 2013 Important • The responsibility rests on each one of us to get the concepts or not. • The final mark is worked for from the beginning i.e.hard work daily = Good final mark.No work/ little work = No mark/ Little marks.We reap what we sow • Lectures (there is always some value adding!) • Consult other people, group work is better than isolation. • Everybody say: “So, help me God”

5. Skaggwa@ E-Business 2013 Pedagogy Teaching / Learning approach : • The teaching and learning approaches will combine classroom lectures , discussions and group activities, and take home assignments.

6. Skaggwa@ E-Business 2013 Students Performance Evaluation • Students Are Evaluated Through: • Coursework (50%) consisting of : • Individual take home (10%) • Test 1(10%) • Test 2 (10%) • Group class presentations (20%) • Final examination (50%)

7. Skaggwa@ E-Business 2013 Individual Take Home • Objectives : • Designing and programming a database-driven Web site for a real company /organization • Produce a Report on your system: • System documentation • User manual • Make a Demo of your system.

8. Skaggwa@ E-Business 2013 Tests The dates on which the tests will be done will be communicated in advance. Venue – will be communicated

9. Skaggwa@ E-Business 2013 Group Class Presentations • Topics will be communicated during the course of the semester. • Group Project Team • Each Team: • 8 students • Equal share of the work

10. Skaggwa@ E-Business 2013 Class Attendance & Participation • How to be an active participant? • Attend all classes and be always on time • Complete scheduled readings before class • Do class exercises • Each student is encouraged to be an active participant by expressing his/her ideas and opinions

11. Skaggwa@ E-Business 2013 Course Policies • Assignments Due Dates • Late submissions shall not be accepted • Only exceptions to this will be prior arrangements with the lecturer • No student homework for a particular assignment will be accepted after the grades for that assignment are turned back to class • If you have problems that prevent you from meeting the preparation and assignment schedule, you must let me know in advance

12. Skaggwa@ E-Business 2013 Groups Constitution

13. Skaggwa@ E-Business 2013 Overview of Electronic Business/E-Commerce

14. Skaggwa@ E-Business 2013 Learning Objectives • Define electronic commerce (EC) and describe its various categories • Describe and discuss the content and framework of EC • Describe the benefits of EC to organizations, consumers, and society

15. Skaggwa@ E-Business 2013 Learning Objectives • Describe the limitations of EC • Describe the major types of EC transactions.

16. Skaggwa@ E-Business 2013 Objectives of e-commerce • In general - • Speeding up the transactions for business partners. • Companies save time and reduce costs • No need to cover long distances. • Development of new markets.

17. Skaggwa@ E-Business 2013 Objectives of e-commerce • Trading round the clock. • Improvement of customer service. • Lower costs for product distribution. • Elimination of intermediate trade. That is to say the middle men are eliminated from the transactions made.

18. Skaggwa@ E-Business 2013 Tradition Commerce may be defined as: The exchange or buying and selling of commodities especially the exchange of merchandise on a large scale between different places or communities

19. Skaggwa@ E-Business 2013 EC Definitions & Concepts • Electronic Commerce (EC) is the process of buying, selling, or exchanging products, services, and information via computer networks including the internet.

20. Skaggwa@ E-Business 2013 Electronic Commerce (EC) • Is an area of study that is concerned with developing methodologies and systems that support • Creation of information sources; • Effective and efficient interactions among sellers, consumers, intermediaries and producers; • Movement of information across global networks.

21. Skaggwa@ E-Business 2013 • Most fundamental, e-commerce represents the realization of digital, as opposed to paper-based, commercial transactions between business, between a business and its consumers, or between a government and its citizens or constituent business.

22. Skaggwa@ E-Business 2013 Electronic Business • E-business is a broader definition of EC that includes not just the buying and selling of goods and services, but also • Servicing customers • Collaborating with business partners • Conducting electronic transactions within an organization

23. Skaggwa@ E-Business 2013 Comparison E-Commerce & E-Business The line between e-commerce and e-business is quite thin, both e-commerce and e-business involve information exchange over the Internet and other Computer Networks, however, e-business has a broader meaning than e-commerce. E-business E-Commerce

24. Skaggwa@ E-Business 2013 EC Definitions & Concepts • E-business - is a broader definition of EC that includes not just the buying and selling of goods and services, but also servicing customers and collaborating with business partners • E-business as a term refers to a collection of business concepts and processes that are enabled by a variety of electronic and online solutions . • In particular these processes include

25. Skaggwa@ E-Business 2013 What is e-Business ? • In particular these processes include * delivering information to customers via Internet, * implementing customer relationship management system * connecting together branches of a company using corporate Intranet or other electronically distributed methods. • Whether the company as a whole or only parts of it is managed using electronically enabled processes, all of these practices are referred to as e-business • To understand e-commerce requires consideration of the supply chain, customer service, procurement and intrabussines tasks

26. Skaggwa@ E-Business 2013 Examples of EC in Service Industry • Online Bill Paying and Personal Finance - this is the ability to pay bills online. Examples of major existing billing presentation and payment systems are : • Automatic payment of mortgages; customer authorises its bank to pay the mortgage automatically every month • Automatic transfer for funds to pay monthly utility bills e.g. customers pay their water bills automatically from their bank a/c

27. Skaggwa@ E-Business 2013 Examples of EC in Service Industry • Cyber banking - also known as electronic banking, home banking, online banking. This includes major banking activities (from paying for bills to securing a loan) conducted from home, business or even on the road instead of going to the bank physically. Benefits • Customer side include saving on time, convenience Bank Side - Expanded customer base, save on cost of paper transactions Services offered include savings & checking accounts, certificates of deposit, joint accounts, loans, payment of bills etc.

28. Skaggwa@ E-Business 2013 Examples of EC in Service Industry Online Job Market - • Internet offers a perfect environment for job seekers and companies searching for hard-to-find employees. • Thousands of companies and government agencies advertise available positions. The market is used by the following parties :- • Job seekers – reply to employment ads • Job offerers – advertise openings on their own websites • Recruiting firms – job brokers • Newsgroups – post jobs in certain categories

29. Skaggwa@ E-Business 2013 Advantages of Electronic Job Market Job Seekers - • Ability to find information on a number of available jobs • Ability to communicate quickly with potential employers • Ability to write and post resumes quickly at low cost • Ability to search for jobs quickly Employers • Ability to advertise to a large number of job seekers • Ability to save on cost of advertising • Ability to post job openings quickly • Lower cost of processing applications using electronic application forms • Ability to provide equal opportunity to job seekers

30. Skaggwa@ E-Business 2013 Business Processes well-suited to particular type of commerce • Sale/purchase of books and CDs , travel service, investments and insurance services • Online delivery of software • Online shipment tracking • Sale/purchase of automobiles and real estate • Roommate matching service

31. Skaggwa@ E-Business 2013 Business Processes well suited to particular type of commerce • Online banking • Room mate matching service • Sale/purchase of impulse items for immediate use. • Etc

32. Skaggwa@ E-Business 2013 EC Definitions & Concepts (cont.) Pure versus partial EC EC takes different forms depending on the degree of digitization of • Product or service sold • The process and the Delivery agent • Traditional commerce: all dimensions are physical • Brick-and-mortar organizations • Old-economy organizations (corporations) • Perform all business off-line • Sell physical products by means of physical agents EC Definitions

33. Skaggwa@ E-Business 2013 EC Definitions & Concepts (cont.) • Pure EC: all dimensions are digital • Pure online (virtual) organizations • New-economy organization • Sell products or services only online

34. Skaggwa@ E-Business 2013 EC Definitions & Concepts (cont. • Partial EC: a mix of digital and physical dimensions • Click-and-mortar organizations • Conduct EC activities • Do their primary business in the physical world

35. Skaggwa@ E-Business 2013 Pure Vs. Partial EC • Based on the degree of digitization of: • Product: • Can be physical or digital • Process: • Can be physical or digital • Delivery Agent • Can be physical or digital

36. Skaggwa@ E-Business 2013 Pure Vs. Partial EC • Traditional commerce • all dimensions are physical • Pure EC • all dimensions are digital • Partial EC • all other possibilities include a mix of digital and physical dimensions

37. Skaggwa@ E-Business 2013 EC Definitions & Concepts (cont.) • Non-Internet EC • VANs—value-added networks

38. Skaggwa@ E-Business 2013 VANs—value-added networks • A value-added network (VAN) is a private network provider that is hired by a company to facilitate electronic data interchange (EDI) or provide other network services. • Before the arrival of the WWW, some companies hired VANs to move data from their company to other companies. Companies now find it more cost-efficient to move their data over the Internet.

39. Skaggwa@ E-Business 2013 Brief History of EC • EC has been around since the 1970s • When data was moved around via networks – EDI. • In the 1990s, internet replaced the VANs and so smaller businesses and individuals could also participate. • The development of the www with the release of the first browser (MOSAIC) in 1993 led to what is e-commerce.

40. Skaggwa@ E-Business 2013 Brief History of EC • 1994 – Could order pizzas from pizza hut online if in the right area • 1995 – small businesses could participate. • 2000- the crash came. Many Dotcom companies collapsed. • 2001 – growth continued after the crash.

41. Skaggwa@ E-Business 2013 EC applications first developed in the early 1970s Electronic data interchange (EDI)—electronic transfer of documents: Purchase orders Invoices E-payments between firms doing business Enlarged pool of participants to include: Manufacturers Retailers Service providers Brief History of EC (cont.)

42. Skaggwa@ E-Business 2013 EC applications first developed in the late 1970s Electronic funds transfer (EFT) Limited to: Large corporations Financial institutions A few other daring businesses Brief History of EC EFT

43. Skaggwa@ E-Business 2013 Brief History of EC (cont.) • Inter organizational systems (IOS) • Stock trading • Travel reservation systems • Internet became more commercialized in the early 1990s • Almost all medium-and large-sized organization in the world now has a Web site • Most large corporations have comprehensive portal

44. Skaggwa@ E-Business 2013 The EC Framework and Field • An EC Framework • EC applications supported by infrastructure and 5 support areas • People • Public policy • Technical standards and protocols –dictate the specifics of in4mn publishing tools, user interfaces and transport. This is to ensure compatibility across the entire network • Business partners • Support services

45. Skaggwa@ E-Business 2013 E-Commerce Framework Electronic Commerce Applications Direct Marketing, Stocks, Jobs, Online Banking, Procurement and Purchasing, malls, procurement, Auctions, travel, online publishing, customer services, intrabusiness transactions People: Buyers Sellers Intermediaries Services Management Public Policy : Taxes, Legal Privacy Issues, Regulations and Technical Standards Marketing & Adv : Marketing research Promotions and Web Content Supply Chain : Logistics Business Partners Common Business services Infrastructure Security smart cards/authentication, electronic payments Messaging and Information Distribution Infrastructure Email, EDI, hypertext, Transfer.Protocols, chat rooms Multimedia Content and Network Publishing Infrastructure (HTML, JAVA, WWW) Network Infrastructure Telecom,cable, TV,wireless, Internet,WAN, LAN,Intranet, Extranet, Cell phones Interfacing Infrastructure The databases, logistics, customers & applications INFRASTRUCTURE Management

46. Skaggwa@ E-Business 2013 Opportunities e-commerce presents to the business world • Expanded and Better focused markets – e-commerce can expand market reach dramatically. • Cost reduction – costs of performing traditional business tasks can be slashed • Quality gains – reduction in transaction times and error rates, resulting from elimination of manual steps such as telephone operator, transaction entry • Improved Customer appeal – e-commerce empowers the customer by putting information and control of transactions in the customer’s hands. • .

47. Skaggwa@ E-Business 2013 Opportunities e-commerce presents to the business world • Improved employee satisfaction – employee communication processes and hands-on access to benefits systems provide new opportunities to increase retention rates of most valued employees • Allows small businesses to have global customer base. • Business can be transacted 24hours a day. • Allows products and services to be available in remote areas e.g remote learning

48. Skaggwa@ E-Business 2013 Downside of e-commerce electronic systems and infrastructures that support e-commerce are susceptible to abuse, misuse and diverse failures • Direct financial loss resulting from fraud – external hacker or fraudulent insider might for example order goods but charge payment to someone else or non existent account. • Exposure of “crown jewels” –information such as marketing competitive pricing information that is crucial to business might be unwittingly exposed competitors or others. • Damage to relations with customers or business partners – relationships might be severely damaged due to disclosure of confidential information. • Unforeseen costs – Legal or public relations costs might be incurred in recovering a security compromise • Public relations damage – damage to corporate image or credibility might result from an outsider masquerading as corporate spokespersons.

49. Skaggwa@ E-Business 2013 Downside of e-commerce continued Examples of documented reports of attacks on networks include : • Alteration of content on commercial or government websites. • Penetration of a major bank’s cash management system • Systematic sniffing of passwords on a scale of millions Publicity of such attacks may be so damaging to a company in terms of loss of customer confidence or competitive advantage.

50. Skaggwa@ E-Business 2013 Downside of e-commerce • Inability to sell some products (e.g high cost jewelry and perishable foods, although supermarkets like www.tesco.com delivers to your home) • High capital investment. • Some customers resistant to change. • Difficulty in integrating current databases and transaction processing systems into –commerce solutions