E-commerce Platform 2020

Infrastructures required to set-up an E-commerce platform

E-commerce infrastructure refers to both the core software’s and hardware’s required to host/run
the e-Commerce platform on. An ecommerce platform is a software application that allows
online businesses to manage their website, marketing, sales, and operations.

An effective e-commerce platform requires the following:-

1) Computer network: depending on the entities involved in an ecommerce transaction,

the required networks may include:-
 Internet − Internet represents the World Wide Web or the network of
networks connecting computers across the world.
 Intranet − Intranet represents a dedicated network of computers within
a single organization.
 Extranet − Extranet represents a network where the outside business
partners, suppliers, or customers can have a limited access to a portion
of enterprise intranet/network.
2) An E-Commerce Website

E-Commerce websites are online portals that facilitate online transactions of goods and services
by providing means of transferring information and funds over the Internet. An ecommerce site
works pretty much like how a physical store works. Users can purchase items, arrange for
delivery and payments on the same site without the need to call a human person to help them
with their order.

E-commerce websites consist of two main components namely:-

1. Back-End infrastructure – this is the database management system used and accessed
by the merchant to manage the online shop.

2. Front-End infrastructure: The area of the website that is accessed by the visitor.

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Elements of an effective E-commerce Website

1. Communication facilities: an effective E-commerce website must a have integrated

communication facilities such as chatting, Electronic Bulletin Boards, video conferencing
systems, e-mail etc. to facilitate interactive communication between the entities involved
in the electronic transaction.
2. E-Commerce Payment Systems

E-commerce sites use electronic payment, where electronic payment refers to paperless monetary
transactions. Electronic payment has revolutionized the business processing by reducing the
paperwork, transaction costs, and labor cost. Being user friendly and less time-consuming than
manual processing, it helps business organization to expand its market reach/expansion.
Examples of modes of electronic payments include:-

 Credit Cards
 Debit Cards
 Visa Cards
 Store value cards such as beba pay cards
 E-wallet/ Digital wallet
 Electronic Fund Transfer (EFT)
 Digital cheques etc.
3. Electronic Data Interchange (EDI)

EDI is an electronic way of transferring business documents in an organization internally,

between its various departments or externally with suppliers, customers, or any subsidiaries. In
EDI, paper documents are replaced with electronic documents such as word documents, PDFs,
spreadsheets, etc.

Examples of transaction documents used in EDI include:-Invoices, Purchase orders, Shipping

Requests, Acknowledgement, Business Correspondence letters, Financial information letters etc.

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Steps in an EDI System

1. A program generates a file that contains the processed document.

2. The document is converted into an agreed standard format.
3. The file containing the document is sent electronically on the network.
4. The trading partner receives the file.
5. An acknowledgement document is generated and sent to the originating organization /
company.

Advantages of an EDI System

1. Reduction in data entry errors − Chances of errors are much less while using a
computerized system for data entry.
2. Improved efficiency − Orders can be processed as soon as they are entered into the
system. It reduces the processing time of the transfer documents.
3. Improved data sharing − It is quite easy to transfer or share electronic format of
transaction data.
4. Reduction in paperwork − a lot of paper documents are replaced with electronic
documents, therefore leading to a huge reduction in paperwork.
5. Cost effectiveness − as time is saved and orders are processed very effectively, EDI
proves to be highly cost effective.
6. Provides a standard means of communication − EDI enforces standards on the content of
data and its format which leads to clearer communication.

Limitations of EDI

1. It’s expensive to implement and maintain EDI technology.

2. Security: - Even though EDI is used by many companies in various industries, there are
still security concerns surrounding it. These concerns stem from the type of information
being shared between business partners. So, while many companies use this software,
others are still hesitant to purchase EDI due to security concerns.

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3. EDI requires a lot of standardization to ensure that the exchanged transaction documents
are compatible with the back-end infrastructure

4. Product or Service Catalogue: -A product catalog is a detailed list of the inventory of a

store. This catalog contains all the data related to the products which include product
images, descriptions, specifications, price etc. The product catalog data is viewed by
customers before making a purchasing decision.
5. E-cart (Electronic Cart): E-cart also known as shopping cart or electronic shopping
cart.
Definitions of a shopping cart:-
1) Shopping cart is a piece of e-commerce software on a web server that allows
visitors to an Internet site to select items for eventual purchase. The software
allows online shopping customers to accumulate a list of items for purchase. At
the point of sale, the software typically calculates a total for the order, including
freight transport, postage as well as packaging and labeling. Associated taxes are
calculated as applicable.
2) A shopping cart refers to the user-interface for the customer to shop at online
stores. It allows users to place items in a "shopping basket" and the cart
remembers these items for a predetermined length of time. More so, the data
stored in the shopping cart is used to process the customer transaction.
3) Shopping cart is a piece of software that facilitates the purchase of a product or
service. It accepts the customer's payment and organizes the distribution of that
information to the merchant, payment processor and other parties.

Note:-Some shopping carts strictly allow for an item to be added to the basket to start a checkout
process other shopping carts actually provides additional features that allows the merchant to
fully manage the online store.

Key functions of a shopping cart:

1) To stores product information

2) Act as a gateway for order, catalog and customer management

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3) It renders product data, categories and site information for user display

Review questions

1) List and explain five factors to consider while designing and implementing an E-
commerce website
2) Discuss five qualities of effective e-commerce software

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