E Commerce Note: Assignment Set -1 must be written within 6-8 pages. Answer all questions.

Q1. Warigon is a retail company and they want to automate the payment system. Assume that you are the design engineer of that company. What are the factors that you consider while designing the electronic payment system? The following factors like non technical in nature, that must be consider while designing the electronic payment system for the retail company to automate the payment system: Privacy. A user expects to trust in a secure system; just as the telephone is a safe and private medium free of wiretaps and hackers, electronic communication must merit equal trust. Security. A secure system verifies the identity of two-party transactions through user authentication and reserves flexibility to restrict information/services through access control. Tomorrows bank robbers will need no getaway cars-just a computer terminal, the price of a telephone call, and a little ingenuity. Millions of dollars have been embezzled by computer fraud. No systems are yet fool-proof, although designers are concentrating closely on security. Intuitive interfaces. The payment interface must be as easy to use as a telephone. Generally speaking, users value convenience more than anything. Database integration. With home banking, for example, a customer wants to play with all his accounts. To date, separate accounts have been stored on separate databases. The challenge before banks is to tie these databases together and to allow customers access to any of them while keeping the data up-to-date and error free. Brokers. A network banker -someone to broker goods and services, settle conflicts, and facilitate financial transactions electronically-must be in place. Pricing. One fundamental issue is how to price payment system service. For example, should subsidies be used to encourage users to shift from one form of payment to another, from cash to bank payments, from paper: based to e-cash. The problem with subsidies is the potential waste of resources, as money may be invested in systems that will not be used. Thus investment in systems not only might not be recovered but substantial ongoing operational subsidies will also be necessary. On the other hand, it must be recognized that without subsidies, it is difficult to price all services affordably . Standards. Without standards, the welding of different payment users in different networks and different systems is impossible. Standards en at interoperability, giving users the ability to buy and receive information, regardless of which bank is managing their money. None of these hurdles are insurmountable. Most will be jumped within t next few years. These technical problems, experts hope, will be

solved as technology is improved and experience is gained. The biggest question concern how customers will take to a paperless world. the e? yw ?[ ?U mesh of interconnected data highways of many forms: telephone wires, cable TV wires, radio-based wireless-cellular and satellite. Far from complete, the I-way is quickly acquiring new on-ramps and even small highway systems. The numerous constructors are either in competition with or in alliance with one another, all in an effort to convince traffic to use their on-ramps or sections of the highway because, like toll ways, revenues in e-commerce are based on vehicular traffic, in our case, vehicles transporting information or multimedia content. The myriad transactions among businesses means that the ultimate winner must select the technology for the I-way that best matches future business needs by using todays tools. Building an access road to a ghost town or a highway too narrow to handle the traffic will yield equally little return on investment for those who have been less successful at matching needs with the infrastructure. Building the various highways is not enough. Transport vehicles are needed, routing issues must be addressed, and of course, the transportation costs must be paid. On the I-way, the nature of- vehicular traffic is extremely important. The information and multimedia content determines what type of vehicle is needed. A breakdown of potential everyday e-commerce vehicles into their technological components shows that they vary widely in complexity and may even need to travel different routes on the I-way, much the way an eighteen-wheeler may be restricted from traveling roads that cannot accommodate it: Q2. List the advantages and disadvantages of eCommerce Advantages With the Internet acting as an emerging technology, e-commerce is the most important aspect that has gained more prominence in the recent times. Electronic commerce involves execution of business via the Internet with the help of computers that are connected to each other as a network. In simple words, ecommerce is a process of purchasing and selling of products and services and funds transfer via digital interactions. The advantages of e-commerce include: e-Commerce helps people to run their businesses without any hurdles of time, distance, or place. The users can access the internet at any time, be it day or night to carry out online shopping. The cost-of-sale for online shopping done through a web site is less as compared to the shopping done via traditional means (retail, paper based). This is because there is no face-to-face human interaction during the on-line electronic purchase process. Also, online shopping is a faster and convenient mode of shopping. e-Commerce is the cheapest means of performing business. Operational advantages of e-commerce consist of reducing both the time and employees necessary for all the business procedures. e-Commerce is especially ideal for niche products. Customers for such products are usually few, but in the vast market place, that is the Internet, even niche products could generate considerable volume of sales. - e-Commerce increases the sales income to the business.

- It helps in easy tracking of the customers segments. Immediate worldwide sales existence in quick time. - It facilitates in opening the shop in any part of the world, independent of geographical locations. - It also aids in reducing customer support expenses through e-mail marketing and customary or traditional newssheet. - It also facilitates the customers to easily purchase their products via various payment accesses. - It helps in developing more shopping carts. e-Commerce provides a lot of physical benefits from the customers viewpoint by: - Reducing customers sorting out time - Making better customer decisions - Spending less time in resolving bills, demands, and order differences - Increasing opportunities for purchasing substitute products. Disadvantages In the previous section, we discussed about some advantages of e-commerce. Let us now discuss about disadvantages of e-commerce. In e-commerce, anybody can easily start the business, irrespective of the fact if it is good or bad. Also, there are many bad sites wherein customers money is wasted. e-Commerce cannot provide guarantee of product quality. Mechanical breakdowns can cause unchangeable outcomes on the total processes. Customer reliability is very crucial here, because there is less chance of direct customer to company interactions in e-commerce. e-Commerce sites, services, and payment accesses are always in danger as there are many hackers looking for opportunities to get the access. Some customers are uncertain of buying products online. For example, online furniture businesses have been a failure as the customers would like to find the comfort level of a costly item such as a sofa before buying it. Some people consider shopping as a social experience. For example, some people prefer to go to a shopping mall with family and friends and purchase products rather than online shopping hence they may not like to buy online. Things like food, jewellery, antique items and so on. can never be sold with ecommerce technologies as it is impossible to check them from remove locations. Many organisations face problems with hiring and maintaining employees with the designing, technological, and business process skills necessary to create a successful e-commerce presence. It is impossible to totally remove frauds in the e-commerce transactions. Cyber laws are not correctly followed strictly, and the existing ones are not clearly defined in e-commerce. The most important disadvantage of e-commerce is shipping, as it takes several days to deliver physical products all over the world. Shipping Costs More: The more the weight of the product, the more will be the cost for shipping it. Doubts and Fears: Some people are unaware of the awesomeness of online shopping. They are also afraid of online shopping, as they have many doubts in their mind like if the store is dependable or if the product they buy is of good quality. Inability to feel the physical: There is no opportunity provided in online shopping to touch or feel the product. Hence, customers feel that purchasing products like apparels or furniture online can be sometimes risky.

Q3. Discuss the working concepts of EDI : Working concepts of EDI discuss the step by step process: 1. Preparation of electronic documents: The first step in any sequence of Electronic Data Interchange is the collection and organisation of data by ABCs internal application systems. Instead of printing out purchase orders, ABCs system builds an electronic file of purchase orders. 2. Outbound translation: The electronic file is then translated into a standard format. The result is a data file that contains a series of structured transactions related to the purchase orders. ABCs EDI translation software will produce a separate file for each manufacturer. 3. Communication: ABCs computer automatically makes a connection with its Value Added Network, and transmits all the files that have been prepared. Each file is processed by the VAN and is routed to the appropriate electronic mailbox for each manufacturer. Several manufacturers do not subscribe to the ABCs VAN, so files are automatically routed to the appropriate network service. 4. Inbound translation: The manufacturers retrieve the files from their electronic mailboxes at their convenience, and reverse the process that ABC went through, translating the file from the standard format into the specific format required by the manufacturer's application software. 5. Processing electronic documents: Each manufacturer will process the purchase orders received in their internal application systems. In the example, we saw the EDI process between a supplier and its vendors. The process will be similar in a wide variety of other business relationships, whether for goods or services. Now let us take a more detailed look at these steps, to get a better idea of the range of possibilities and situations where EDI can be submitted. 1. Preparation of electronic documents: The most demanding part of implementing EDI in any business is preparing the electronic documents. There are a number of different methods to generate electronic documents as there are many different numbers of businesses and applications. Some methods of generating electronic documents are: Transcribing data: Data from printed reports is manually entered into a small computer based software package by users. Most small businesses need to communicate information electronically to their customers or vendors, but they do not have the computing resources to automatically generate information. A computer might be the only computing resource. In this case, a relatively inexpensive "off-the-shelf" EDI software packages can be used. This requires only a modem and a computer. Most of these products include options to allow users to generate entry forms, permitting them to enter information via the keyboard. Reformatting existing computer based data: Data base products or spread sheets are commonly used by small businesses. These data processing tools can be used to export data for EDI transactions. It is also possible with inexpensive commercially available computer software to read electronic report files from other applications and re-format them into data files that can be used by EDI packages. Updating existing applications: Companies that have active application systems can consider having the applications enhanced to generate output in a format that could be easily translated. Custom software development is required for this approach. The enhancement of the existing software depends on the extent of the existing

software portfolio. Generation of purchase order data is done by making use of a program to read existing files from a purchasing system and extracting the necessary information. The existing software can be modified to create new output files. Purchasing software: If a company wants to purchase software that ensures that it will meet their EDI requirements then it should be predetermined as an evaluation requirement. Many software vendors include such capability in packages of basic software. If the capabilities are not included, then the vendor can also provide the additional functionality at a cost that will be less expensive than in-house modifications. From the above discussion, we can arrive at a conclusion that participation in EDI trading partnerships can be accomplished by any business. It does not require a heavy investment in computing resources, and a sophisticated portfolio of business applications software to begin using EDI. If a company has already developed its business applications, the capabilities of that existing software can be enhanced to provide even more benefits. 2. Outbound translation EDI can be simply defined as electronic exchange of data in a mutually agreed-upon format. There are numerous application software packages creating purchase orders, all constructed for specific needs and based on different industry and data requirements. Hence, there arises a need to provide a common definition of data formats. However, the difficulty of accomplishing this is evident. Twenty different companies will almost certainly yield twenty different definitions of how a part number should be formatted. This issue could be avoided in a simple one-to-one EDI relationship by providing the schematic layout of the data to the receiver, and simply transmitting the data to the receiver without any translation. The receiver can alter and reformat the data to suit their purpose. The sender and the receiver will agree upon a common file definition for their use. Many EDI relationships started out using similar methods. However, if we consider the example, ABC has several hundred suppliers, and the chance of getting them all to agree upon ABCs definition of a purchase order format is quite small, particularly if those suppliers are also dealing with hundreds of other customers. There has to be a unique set of rules for each partnership. The resulting confusion would quickly drive customers and suppliers to return to paper forms regardless of the benefits or savings. The solution to this would be to have a comprehensive set of national and international standards. The standards are developed by specific industry or business groups. The standards provided commonly agree upon formats for use in virtually every type of business communication. Using these types of standards, information can be organised in a transaction format with definitions for the format. An internal system or a separate software package can be used to translate data into a standard format. Irrespective of the means used for translation, the end result of the process will be an output file generated in a specific format that any subscriber to the standard can understand. 3. Communication Transferring data in a one-to-one EDI relationship can be as easy as connecting a modem and transferring the file. This would become impractical with more number of vendors. If a manufacturer has to send out hundreds of purchase orders each

week to hundreds of suppliers, it would require many employees and a very tight schedule, to transmit all of their purchase orders. Even if the manufacturer had an extensive private network available for successful transmission, it is necessary that all vendors be linked into the network. These problems can be avoided by a connection allowing receivers to access the senders systems and collect the necessary data, but it poses a serious security issue. With careful control it will work on a limited base including separate hardware to isolate the system being accessed by third parties. Some companies might accept these approaches, but this would lead to chaos, and once again most EDI users would quickly return to preparing printed documents, so that they could rely on the mail to distribute all their documents. To overcome these issues, EDI users can make use of third-party network services, commonly referred to as "Value Added Networks" or VAN's. The VAN works as a clearing house for electronic transactions. It serves as a private electronic mail service. A company can send all of their purchase order files to a single destination. Each vendor's data is routed to their own electronic mailbox by the VAN. If the recipient of the file does not subscribe to the particular VAN used by the sender then the transaction can be routed from one VAN to the other. The security issue is resolved by using a VAN. It allows trading partners to trade information, but at the same time avoid giving information away. Both the parties cannot access each others systems. However, they can still freely exchange agreedupon information. The implementation process can be made even easier by using a full service VAN, which provide other services, including translation, standards compliance checking, and EDI software. 4. Inbound translation The inbound translation process is the reverse of outbound translation. Once the purchase orders have been transferred to the electronic mailboxes by the VAN, the vendor can retrieve them at their convenience. The files will be translated into a specific format required by the vendor's application. This is called as de-map process. The usage of a standard format makes it easier for the vendor to recognise, which company the transaction is from, and then which type of transaction it is. Once the translation is complete, then it can be made usable in any desired format to the receiver's internal applications. 5. Processing the electronic document The vendor base will range from large corporations with sophisticated application systems to small shops with only a modem and a computer to a large manufacturer. A vendor with a highly automated process may process the information directly into their applications and act upon it without any interference. The small business may print reports. In both the case, and regardless of the scale, EDI can be successfully implemented. The final step is to close the loop by transmitting an acknowledgment transaction back to the vendor. Q4. Give examples for different models of ecommerce and explain what is the benefit of that model in your example Business Models Let us now discuss the various business models that have emerged since the birth of e-commerce.

Introduction to business models A business model can be defined as the particular way in which a business organisation ensures that it generates income, one that includes the choice of offerings, strategies, infrastructure, organisational structures, trading practices, and operational processes and policies.[1]Developments in computing technology and communication systems have not only created many new business opportunities, but they have also created new ways of doing business. Now, let us discuss the most common business models in e-commerce. The merchant A merchant is a dealer of goods and services. The merchant provides the product information on a website and he also gives an online ordering mechanism. Consumers can select the products which they want to buy and place an order. The product price is either fixed or negotiable and the customer can either collect the ordered products from the shop or get it delivered. Infact, the merchant operates in almost the same way as a traditional brick-and-mortar shop-owner. This business model is most appropriate for dealing in physical goods and services such as books, computers or a pizza delivery service. The only advantage in this model is that the merchant can directly reach the end users and sell to them without engaging wholesalers or retailers. Click-and-mortar merchants Click-and-mortar shops combine a website with a physical store. The advantage with this model is that they have a physical store to promote the website. In this model, consumers can return unwanted or defective products simply by visiting the stores website instead of mailing it to a web site operator. Build to order merchants Under this model, customers have the advantage of buying goods or products that are made to order. Build to order merchants not only offer pre-manufactured or developed products for sale, but they also offer customisation of products according to the requirements of the customers. Customers can specify the features and benefits of the products that they require and the product is assembled individually and shipped to the customer. This model is best suited for electronic and computer products, which can be customised to requirements. The service provider For some services, like a pizza delivery service, where a pay-per-item type of payment is followed, the merchant model is quite appropriate. However, many Internet-based services cannot easily be offered this way. This is because, quite often, it is difficult to define the "product" that is sold, or to set a price for this product, as they are information based. For example, a news site offering the service of access to its archive, might find it difficult to set a proper price for its services. To overcome this problem, e-commerce marketers offer advertising-based access to their service. This way, they do not charge the end customers, but recover the costs through revenue from the advertisers. However, this strategy does not seem to be very popular, as only very few advertisement-driven sites are able to earn sufficient income. Subscription-based access Under this model, businesses provide subscription-based access to their service. A user usually pays a fixed amount per month or year and in return gets unlimited access to the service. One more option would be to pay a monthly base fee and pay a surcharge for all access beyond a certain limit. This model is most suitable for services like databases with articles, news, and patents and online games or adult

websites. However, this model has not proved to be profitable, as users find their own ways to access the content without paying the subscription. To overcome this problem, certain service providers make only some portions of the articles available for preview. The customers get to read the complete articles only after payment of the necessary charges. Prepaid access In this scheme, after paying certain amount of money users get access to the service for certain amount of time. After the amount is spent, the user has to renew or prepay again for further access. The best example for this business model is usage of smart cards. The broker Brokers create markets by bringing buyers and sellers together and helping them in transactions. Brokers charge for every transaction, usually as a percentage of the price of the transaction. Examples are classified ads, group buying and bounties. The sales representatives Sales representative usually works on a basis of commission that for selling each item they take commission from producer. On the web, this model is known as affiliate programs or referral fees. In this someone creates a website on some specific topic and adds links to products on a retailer site which are related to the topic, so that the visitors can buy those products. For example, a music reviewer can add a link in a review to an online music store where the users get an authority to order the CD being reviewed. If the user likes the review then he can follow the link and buy the CD then the retailer pays a commission to the reviewer for referring the site. Anyone who can build a website can link to a product and if everything goes well, then they can make money. This model describes the popularity and usage of the World-Wide Web. The advertiser Advertising driven sites are one of the key foundations of e-commerce. The principle behind this is simple and well known. A site gives free access to some products and shows advertisements on every page. When the user clicks on advertisement an advertisement page appears. The advertiser has to pay the site operator for advertising the product. Targeted advertising We all know that an advertisement on the site will get high exposure because those advertisements are targeted to the site visitors. While advertising on the net, it is possible to target the advertisement to the purpose of the program for example, football games can show billboards in the game to give a look of the real playing field. The site operator earns more money by placing targeted advertisements. Free access Let us try to understand this by looking into some examples below: Free web space providers usually provide advertising banners at the top or bottom of the users sites or as a separate, pop-up window. Free Internet access providers show advertisements on the starting page so that the user can have a look at the advertisements when they browse something or when they go online. Advertisements and electronic greeting cards are also sent with a personal message. From the above examples it is clear that in this model the users are given access to something for free. And with this free access product, shops or sites are also advertised.

The auction room This model follows the guidelines followed in an auction sale the only difference being that the auction is carried on online. There are basically two types of auctions open auction and reverse auction. Open auction: In this, the product is repeatedly bid by the participants. The participant who places the highest bid is awarded the product. Through networks such as the internet, it is possible for many bidders to participate at the same time in one auction. The participants of an online auction have to enter an initial bid, an amount with which to increase the bid and a maximum amount. Whenever some other participant places a higher bid, the system then automatically raises the bid with the indicated amount until any of the bidders have won the auction. Reverse auctions: In this, the price is initially set at a very high level and the price is dropped at regular intervals. Participants can bid the price at which they want to buy and should also know the fact that there may be chances of bidding by someone else at a higher price. This model is well known for bidding for high-priced items like automobiles or airline tickets. The virtual mall A virtual mall is a site that hosts many retailers, service providers, agents and other businesses. The virtual mall operator usually charges a fee for managing and maintaining the retailers shop and for including him in the site-wide inventory. Additionally, the virtual mall operator may also charge a fee for every transaction the seller performs. Virtual malls can operate within the framework of a larger site, such as a portal. We will be discussing about the portals in the next sub section. The virtual mall can act as a mediator between individual customer and the retailer, for example guaranteeing the full refund if a merchant is unable to deliver the product on time. The virtual community A virtual community is a site which has a gathered group of users who all have interest on a common topic and who work together and share their knowledge. Users feel highly loyal to the site and always visit the site as this site is created because of their interest. This offers possibilities for advertising. A specialised type of virtual community is the knowledge network or expert site, where people, layman and expert, share their expertise and experiences[2]. In these sites, users can get their questions answered and they can even raise the topics for discussion. Example of this type of community may be Usenet newsgroups. A simple method to monitor a virtual community is to register for free access to the website. This allows inter-session tracking of customers site usage patterns and thus produces data of higher value in targeted advertising promotions. Registration can be made more attractive and interesting by giving limited access to unregistered users and by allowing the registered users to modify the site after registration or by allowing them to participate in chat or message boards. The infomediary An infomediary collects, analyses and sells information on customers and their buying behaviour to other producers who want to know about these customers. Infomediary usually offers something free for customers such as free internet access or free web access. This is very useful as this allows the infomediary to control and observe the users online activities. The information which is collected by the infomediary is very important for marketing purposes. Usually an

infomediary makes money with an advertising-based model, in which the advertisements are established by the information that the infomediary has gathered. The infomediary model is helpful when it is used together with a virtual community model or virtual mall, as these models offer the ability to collect essential information. Q.5. Write short notes on a. False and malicious sites b. Stealing visitors credit card information c. Stealing customers data from selling agent and internet service providers d. The use of cookies False or malicious web sites The basic idea behind building the false or malicious web sites are for stealing visitors IDs and passwords, stealing credit card information, spying on a visitors hard drive, uploading files from a visitors hard drive and so on. Users should be careful from these kinds of websites and users should never reveal their personal information like phone numbers, address and so on, to any such kind of websites. Users should never reveal their credit or debit card numbers, login IDs, passwords and other information. Stealing visitors credit card information Malicious web sites may also be built and temporarily termed as legal businesses for the purpose of stealing visitors credit card information. We can explain this with an example consider a malicious web site which is built to sell and deliver a gift to anywhere in India on Diwali. However, such sites vanish suddenly, and this is identified only after Diwali, with no clue to where to find the site. Such kinds of websites are just built to steal the visitors credit card information. Setting up such false Web sites to cheat users into passing along vital information like passwords or credit card numbers is called spoofing. Stealing customer data from selling agents and internet service providers Most of the customers who purchase goods and services on internet pay through their credit cards or cyber cash. Such customers also need to take the support of their internet service providers for accessing the internet. The credit card information is stored by the internet service provider and selling agents and many times hackers are successful in breaking into the systems of selling agents and internet service providers and obtain the information on customers credit cards. The use of cookies The use of cookies to get user information is a threat to the privacy of users. Cookies are pieces of information that a web site collects and transfers to a visitors hard drive for record keeping purposes[1]. Java Script programs related with web sites record information revealed by a visitor on request by the web browser. When a visitor visits any false or malicious websites for the first time, many web sites ask visitors to register themselves with the web site and when the visitors fill the information, it is recorded in a text (.txt) file along with a registration number assigned by the site. This file is stored on the visitors hard drive. The Web site server also stores the registration number and some other information such as the user ID and password if the user gives all this information. When the user visits the site again and again, the cookies record the details on the web links examined or clicked on into the server.

Based on the web browser used, the cookies may be placed in a single file for different websites. Cookies cannot be used for life long. Depending upon the objectives of the website, cookies are assigned the expiration dates which may be of very short period or very long period. Recent versions of web browsers are designed in such a way that the user gets the authority to accept or reject the cookies. This is done in order to provide privacy to the users. In the recent versions users also have the authority to edit a cookie file to remove the cookies, so that the user can visit web sites without any fear.

Q6. Define Mcommerce. Describe the areas of potential growth and future of mCommerce Answer: m-commerce does not have any precise definition. mCommerce and its definition varies from every individual. mCommerce is called as next generation e-commerce. The process of buying and selling of goods and services through wireless devices such as cellular telephone and personal digital assistants (PDAs) is called as m-commerce. The newly appearing technology behind m-commerce is based on the Wireless Application Protocol (WAP). The traditional e-commerce is replaced by the m-commerce. Anywhere anytime is the important feature of m-commerce that leads us to implement mcommerce in place of e-commerce. Areas of potential growth and future for m-commerce: New Channels of banking services are emerging and are working on m-commerce technologies. These new channels can facilitate deposits, payments, transfers and withdrawals. If the operational costs of the banking sector in m-commerce is reduced drastically then, efficiency in the transaction processing can be increased. The travel industry is concentrating more on m-commerce. mCommerce will allow customers to schedule, reschedule, plan trips through their mobile devices instantly before they give a second thought. Traders in the retail sector focus more on how to locate customers more easily and will be able to provide secure payment methods through mobile digital certificates or voice recognition. Some of the todays and up-coming attributes of mcommerce are discussed in the table