DAV SCHOOL OF BUSINESS MANAGEMENT, BBSR

SUBJECT : E-Business
BBA 6th semester
Notes : unit-5

Syllabus:-Economics, Global and other issues in E-Commerce and Software

Agents.
Issues in E-Business
 Poor Knowledge and Awareness: When it comes to ratio of internet
consumers, scenario is not so admirable one. Majority of Indian rural population
are unaware of internet and it uses. Surprisingly, most of internet savvies or
urban population are also suffering from poor knowledge on online business and
its functionalities. Very few are aware of the online corruption and fraud and
thus darkness still exists. A reliable survey reveals that 50% of Indian online
users are unaware of the solution of online security.
 Online Transaction: Most of Indian customers do not possess plastic money,
credit card, debit card and net banking system, which is one of the prime reasons
to curtail the growth of ecommerce. Nevertheless, in recent years, some of the
nationalized banks have started to issue debit cards to all its account holders.
This is undoubtedly a positive sign for Indian online entrepreneurs.
 Cash On Delivery:Cash on Delivery (COD) has evolved out of less penetration
of credit card in India. Most of Indian E-commerce companies are offering COD
as one of mode of payment for the buyers. 30%-50% of buyers are also taking
advantage of this mode of payment while making purchase of any product and
service over internet. COD has been introduced to counter the payment security
issues of online transaction, but this mode has been proving to be loss and
expensive to the companies. It is seen that majority of the customers denied to
make the payment at the time of delivery of the product. Hence, companies tend
 to lose the sale along with product transit fees. In order to curb the problem of
COD, online companies should take some judicial steps; otherwise basic logic
behind the ecommerce business will be at risk.
 Online Security : In case of start up and small business, Business owners are
ignoring the importance of authentic software due to budget constraints. They
are even failing to take the initial steps to secure and protect their online
business through installation of authentic protection services like antivirus and
firewall protection, which indeed a crucial step for successful online business
players.In India, maximum number of business entrepreneurs used unauthorized
software in their server, which usually does not come with upgraded online
security. Such pirated software leaves room for virus, malwares and Trojan
attacks and it is highly risky task to make online transactions in the systems,
which may disclose or leak sensitive details of credit cards and online banking
of the users. These kinds of droopiness should be banned in Indian ecommerce
sectors. Affiliation to SSL certificate should be imposed as a mandatory action
for every owner.
 Logistics and Shipment Services: In India, logistics and courier services
required lots of improvement. While, perfect and strong logistics service is one
of the key reasons behind the success of any online company, India is lagging
far behind in this sector as most of the town and small villages are still not
covered under serviceable area of many of the courier and logistic companies.
Ecommerce is hampered in a big way owing to the limited services offered by
the courier service companies.
 Tax Structure: Tax rate system of Indian market is another factor for lesser
growth rate of eCommerce in India in comparison to other developed countries
like USA and UK. In those countries, tax rate is uniform for all sectors whereas
tax structure of India varies from sector to sector. This factor creates accounting
problems for the Indian online business companies.
 Fear factor: Fear of making online payment is a universal psychological factor
of Indian customers. With the spread of knowledge on online transactions and
its reliability, some percentages of customers have overlooked this fear and they
are fearlessly engaging themselves in online shopping. But still, majority of
customers are not aware of online transactions and its security. They often
reluctant to disclose their credit card and bank details and preferred to stay away
from online world of shopping.
 ‘Touch and Feel’ factors: Indian customers are more comfortable in buying
products physically. They tend to choose the product by touching the product
directly. Thereby, Indian buyers are more inclined to do ticketing and booking
online in Travel sectors, books and electronics. Companies dealing with
products like apparel, handicrafts, jewelry have to face challenges to sell their
products as the buyers want to see and touch before they buy these stuffs.

E-commerce Challenges: Problems and Challenges of eCommerce Industry

With the proliferation of smartphones and tablets e-commerce volumes have
exponentially increased year-on-year, but so has shopping abandonments. This has
resulted in a huge loss for e-commerce players. The reasons could be a non-
responsive website, unexpected shipping costs, lack of personal assistance when
required, or reaching customers at multiple touch-points. What the players really
lack is effective CX technology that bridges the gap between e-commerce sales
and customer service, a technology that can nurture customers at their preferred
channel fostering advocacy at all levels.
But before investing in such call center technologies, you should understand what
good it would do to you. This blog post will help you do just that. We will discuss
the major e-commerce challenges that players face, and how a customer interaction
technology could help in overcoming such challenges.
Challenge #1: Lack of Verification Measures
Once a customer signs up in an e-commerce portal, the portal is unaware about the
customer except for the information he/she entered. the credibility of the customer
is questionable. This heightens when the customer issues a Cash-on-Delivery
(COD) purchase because the business is unsure whether the customer is genuine or
not. These have resulted in huge revenue losses for many e-commerce players.
Solution: This challenge can be brought under control by sending out a textual
or/and email message to the customer to validate his/her identity. And when a
COD purchase is issued, an automated call or Interactive Voice Response
(IVR) can be dialed out to the customer and ask him/her to validate the delivery
address. This would not send out the wrong message to the customers that they are
being doubted, and it would fulfil your purpose as well.
Challenge #2: Product Returns and Refunds
When products are returned because customers are unsatisfied with the product, it
scars the business with the heavy loss of shipment and reputation. Cost of logistics
has always been an issue for e-commerce players especially for those who deliver
for free.

Solution: This cost of operation can be minimized with proper returns management
with seamless interaction platform with logistic partners and vendors.

Challenge #3: Lack of Integration

Order management system, customer support system, dispatch system, order
tracking system, etc are applications that can streamline the experience of the
customer across the buying journey. But if these systems are disparate it could ruin
customer experience. Solution: Customer service solutions could integrate with
multiple systems seamlessly, synchronizing available information across all
systems and displaying it in a single interface.
Challenge #4: Customer Issues Going Unnoticed
Being in an industry where customers can take their business elsewhere in a blink
of an eye, customer service goes a long way. E-commerce business receives a lot
of inbound interaction with more than 75% being complaints or concerns. When
these concerns go unnoticed, it compromises the standard of quality of your
business and tarnishes your image. Solution: With proper ticketing solutions and
easy to use interfaces, employees are able to cater to every customer ticket
generated at any channel. The efficiency raises with prioritization measures
assigning the level of importance to each ticket, making sure high priority tickets
are handled before anything else.
Challenge #5: Customer Loyalty
The e-commerce industry is an industry where the cost of switching is pretty
insignificant. A lot of players have lost customers because their rivals have a better
quality of customer service or better discounts. Knowing that 86% of clients stop
doing business with a company because of poor customer service, you need to
ensure customer service is always a priority for your online business and part of
your retention strategy. Customers demand consistent and seamless experiences
across all channels, and players that refuse to deliver fail to retain customers.
Solution: Customer service experience solutions make sure every customer
interaction is under the radar. With effective customer nurturing technology tools
and multimedia integration improves customer retention scores and are more likely
to transform one-time purchasers to brand advocates.

According to many industry analysts, there are at least four dimensions to the
challenges facing ecommerce in today’s crowded online marketplace. The major
challenges of ecommerce include::
1. Economic challenges
The economic challenges facing eCommerce merchants include the costs related to
establishing an eCommerce business, the number of competing online merchants,
issues connected with infrastructure upgrades, and the availability (or shortage) of
skilled staff. Researchers point out that it’s estimated up to 90 percent of Internet
host computers reside in high-income countries that are home to only 16 percent of
the world’s population.
2. Technological challenges
According to industry analysts, the primary technology-related challenges facing
ecommerce businesses include security concerns, bandwidth availability, and
integration with existing protocols. One of the realities of the explosive popularity
of ecommerce is that it has also become a more attractive target for criminals; put
simply, more overall ecommerce activity also means greater security concerns.
In addition, with each new high profile ‘hacking’ incident, consumer confidence in
online retailing takes a ‘hit’ and further raises the importance of ecommerce
security. In addition, another challenge resulting from increased ecommerce
activity is growing concern about the reliability of network infrastructure.
Integrating Internet software with preexisting applications and databases presents
another technology-related challenge; ecommerce technology continuously
evolves, and integrating that new technology is not always an easy—or
inexpensive—task.
3. Social challenges
In recent years, consumers’ concern over issues such as privacy, and sharing
personal information has grown exponentially. Additionally, there are cultural
differences that come into play as ecommerce businesses expand their reach
beyond their native regions. Unlike traditional merchants who were easily able to
use language and marketing methods that played well with their target audience,
online sellers have to take into consideration the fact that there are many linguistic,
cultural and social differences in their extended customer base. Any one of those
differences has the potential to create stumbling blocks for ecommerce companies
in their efforts to develop long-term ‘relationships’ with a broad customer base.
4. Legal challenges
Although it may seem as though ecommerce has been in existence for a very long
time, the reality is that it remains a relatively new industry with many unresolved
legal issues, including those pertaining to intellectual property rights. Then there
are legal issues pertaining to taxation: as noted in our previous blogs—and covered
extensively in business media in recent months—the recent Supreme Court
decision allowing states to impose online sales taxes on businesses that are not
physically located within their boundaries has the potential to dramatically impact
the bottom line of ecommerce companies nationwide. One of the prime drivers of
that decision—and states’ desire to tax ecommerce—has been the industry’s
phenomenal success; one of the ‘down sides’ to increased market share, is that
ecommerce companies have become a more desirable taxation ‘target’ for states
seeking to increase their tax base.

Software Agents
The competitive business environment and the growing complexity of workand
personal lives create demands to perform many (often simultaneous)tasks
efficiently and promptly.
To support these imperatives, new computingtools are needed. One such emerging
tool 'is the notion of an intelligentautonomous software agent.
Types of Software Agents
Two types of human agents function in the workplace: office-bound workers
and mobile field workers. Similarly, two types of software agents’ function’:
static (computer bound) and mobile.
The static software agent simply sits onthe server or PC and actively monitors the
environment. For instance, a usermail agent executes in the background and is
activated when there is anincoming mail message. After processing the mail, the
agent becomes dormant again until another event requires processing. In short,
stationaryagents do not roam around the on—line world but use embedded
knowledgeto assist in filtering and processing the volume of incoming information.
Characteristics and propertiesof agents

Recall that software agents can be ”static,” they reside on the PC, and provide
expert advice or services locally. In other cases, the agent is mobile and acts as an
emissary, executing on remote computers, perhaps even generating multiple
Clones, then returning results to users. The technical and operational
characteristics of mobile and static software agents are quite differentand raise
diverse issues and concerns.

Properties of Mobile Software Agents

Mobile and distributed agents raise a number of issues

1-Programming :-The agent must be programmed .The language must be powerful

enough to expressthe rules and concepts required.

2-Safety:- Remote hosts must be assured that the agent can cause no damage,
obtain no secrets, or commit other illegal acts.

3-Resource usage:- As an owner, you want to be sure your agent does notexceed its
budget; as a host, you want to be sure agents do not consumedisproportionate
resources.

4-Navigation. Agents must be able to find the resources they need. Theyshould
coordinate with one another so as to traverse the infosphere efficiently.

5-Privacy. The agent's internal state and program should not be visible to
others. Visiting agents should not discover more information than they
are entitled to.

6-Communication. Agents must be able to communicate with users and

one,another, even if the network is not always connected.
Components of a Software Agent
A software agent is composed of the embedded knowledge that’ drives its.
Actions. This knowledge is described in the form of goals that lay out both the
objectives for the agent and the manner in which it will perform its tasks.
Asoftware agent could contain the following features:

1- Owner—parent process-name, or master agent name. Agents can havemany

owners; Humans can spawn agents, processes can spawn agents(such as» stock
brokerage processes using agents to monitor prices), orother agents can spawn
their own digital assistants.

2-Author—development owner, service, or master agent name. Intelligentagents

may be created by people or processes and then supplied as templates for users to
personalize. This information is necessary for debugging the agent code if anything
goes wrong.

3-Lifetimeétime to live (TTL). Some agents might exist only for a shortduration
and die after some task is completed. Others might live longer.

4- Account—billing information, electronic addresses. Agents must have ananchor

to an owner’s account and an address for billing purposes or as apointer to their
origin. The agents must be Charged for services so thatscarce resources can be
used effectively. For this purpose, links to theowner’s account are essential.

5-Goal—goal statements representing the measures for success. Crisp Statements

of successful agent task completion will be necessary, as well asmetrics for
determining the task’s completion and the value of the return.Measures of success
may include simple completion of a transaction within the boundaries of the stated
goalor a more complex measure of returned information (document meets 75
percent of my needs).

6- Subject description—topic name, topic description attributes. The

subjectdescription will detail the goal’s attributes. These attributes will providethe
boundaries of the agent task, possible resources to call on, and class ofneed (such
as stock purchase, airline price, decrease notification, and soon). These descriptors
can be interrogated by the servers, which can thenmake a decision whether to
service the agent or refuse service to it.

7-Buckground—supporting information This could include the type of data

the agent understands, the languages that it can understand and so on.