Course Outline

 E-Commerce and its types, Internet and WWW Basics, Internet

standards and protocols, IP addressing, Data communication on
internet, Domain name system
 Networking devices – Bridges, Switches, Routers etc., Role of ISP’s on
Internet, Getting Domain name and IP addresses, Understanding
electronic mail
Course Outline Continued…
 Markup languages and the Web, Web designing using HTML, CSS and
JavaScripting
 Client side & server side processing, Cookies, Maintaining state in a
stateless environment, Two tier/n-tier architecture
 Security issues on the internet, Firewalls, Proxy Server, Virtual Private
Network
Course Outline Continued…

 Cryptography and Public key infrastructure (PKI), Certification

Authorities and Digital Certificates, Digital signatures Technology
 Electronic Payment Systems – VirtualP in payment system, Centralized
account system, Electronic Check, E-Cash, SSL and SET based payment
systems
Course Outline Continued…

 E-business– advantages/disadvantages, Paper and electronic

catalogues
 Electronic Data Interchange (EDI)
 E-business models

 Internet marketing

 Data mining and knowledge discovery Process, OLAP, Types and

business application of data mining
Course Outline Continued…
 E-business strategy, supply chain/value chain analysis and
Porter’s model, role of e-commerce in competitive strategy
 E-banking, ERP
 Legal/policy issues in e-commerce –salient features of
Electronic Transactions Ordinance, 2002 in Pakistan
Course Outline Continued…

 Territorial jurisdiction and conflict of laws, online contracts,

online defamation, Copyright in Cyberspace

 Issue of ISP’s liability, domain-name and trade mark

conflicts, privacy issue on the internet, Cyber crimes
Suggested Books

 Electronic Commerce (4th edition) by Gary P. Schneider

 Electronic Commerce : Security, Risk Management and

Control by Greenstein & Feinman

 Electronic commerce – A Managerial Perspective by Turban

et al.
Other Reference Books
 Absolute Beginner’s Guide to Networking (3rd
edition) by Joe Habraken
 Creating a Web Page (5th edition) by Paul
Mcfedries
 Web Security, Privacy & Commerce by Garfinkel &
Spafford
 Data Mining – Concepts & Techniques by Han
Kamber
 E-commerce – Strategy, Technologies and
Applications by David Whiteley
 Internet Law in Canada (6th edition) by Michael
Geist
E-Commerce - Definition

 Electronic commerce is an emerging

concept that describes the process of
buying and selling or exchanging of
products, services and information via
computer networks including the internet
E-Commerce – classification…

 A common classification of EC is by the nature of

transaction:
 Business-to-business (B2B): electronic market
transactions that take place between organizations
 Business-to-consumer (B2C): retailing transactions with
individual shoppers – typical shopper at Amazon.com is
a consumer
 Consumer-to-consumer (C2C): consumer sells directly
to consumers, examples - individuals selling in
classified ads, auction sites allowing individuals to put
up items for auction – e.g, e-bay
EC Classification
 Consumer-to-Business (C2B): individuals who sell products
or services to organizations and those who seek sellers and
conclude a transaction

 Intrabusiness (organizational) EC: all internal organizational

activities involving exchange of goods, services or
information, selling corporate products to employees,
online training and cost reduction activities

 Non-business EC: academic institutions, not-for-profit

organizations, religious/social organizations and government
agencies using EC to improve their operations, customer
service and reduce expense
Basics
 Web client- machine that initiates internet
request
 Web server – machine that services internet
request
 Brower - software at the client side to interact
with web data
 Intranet – an internal network of computers
confined to a single place
 Extranet – when two or more intranets are
connected with each other, they form an Extranet
– e.g, Virtual Private Network
 Internet – a global network of networks
Client-Server Model

Client
file
A Server X

Internet
Client file
B Server Y
What is the Web ?

 The Web is a protocol that uses the internet as the

communication structure

 The web links documents stored in computers that

communicate on the internet

 Based on Hypertext Transfer Protocol (HTTP) - native

protocol of WWW designed for making web page requests

 HTTP is a FOUR step process per transaction

HTTP Connection

1. Client

 Makes a HTTP request for a web page

 Makes a TCP/IP connection

2. Sever accepts request

 Sends page as HTTP

3. Client downloads page

4. Server breaks the connection

Side Effects of http transfers

 A record is left of all web transaction

 Resides in log files generated at the server

 Good news : user data recorded

 Bad news: what about user privacy?

 Common log file (CLF) format – identity, date, request,

status etc.
What is a network?

1. A network can be anything from a simple

collection of computers at one location
connected through a connectivity media to the
internet (a global network of networks)
2. Local Area Network (LAN) is a server-based
network confined to a particular area/place
3. Most LANs consist of many clients and a few
servers
LAN setup

Networ
k server

Client Client
Machine Machine

Hub
Print
Printer Server
OSI Network Model

1. International Organization for Standards (ISO)

2. In 1970’s came ISO’s OSI model – a conceptual model for
network communications
3. OSI - Open System Interconnection Reference Model
4. 7 layer architecture
ISO OSI model

Sender Side Receiver Side

Application layer Application layer

Presentation layer Presentation layer
Session layer Session layer
Transport layer Transport layer
Network layer Network layer
Data link layer Data link layer
Physical layer Physical layer
TCP/IP Stack Mapped To OSI Model
OSI Model TCP/IP Stack

Application

Presentation Telnet HTTP SMTP FTP

Session

Transport TCP UDP

Network IP RIP ARP

Data Link Network Interface Card Drivers

Physical
 TCP/IP Protocol Stack Members

HTTP Used for web page requests

Telnet Terminal Emulation Protocol – connects a local computer with a
remote computer
FTP File Transfer Protocol - provides an interface and services for file
transfer over the network – upload from local to remote & vice versa
SMTP Simple Mail Transport Protocol – provides e-mail services on the
internet
TCP Transmission Control Protocol – connection-oriented transport protocol

UDP User Datagram Protocol – connectionless transport protocol

IP Internet Protocol – provides basis for IP addressing on the network

ARP Address Resolution Protocol – maps IP address to MAC hardware

address
RIP Routing Information Protocol – Routing protocol used by routers to
determine the best path for packets on the network
140.57.220.200 140.57

Host Machine
Getting the binary bits:Example

140.57.220.200

140 57 220 200

10001100 11011100 11001000

00111001
Decimal To Binary

2 57

2 28 1

2 14 0 00111001=57

2 7 0

2 3 1

1 1
Binary To Decimal

20x1+21*0+22*0+23*1+24*1+25*1+26
*0+27*0=57
 Look again at binary
addresses????
 Classes of networks – A,B,C,D and E
 Network number starting with 0
- 0111 1111 is the biggest number equal to 127 in decimal
- So, 0-127 is the range of class A networks
 Network number starting with 10
- 1000 0000 is equal to 128 in decimal
- 1011 1111 is equal to 191 in decimal
- So, 128-191 is the range of class B networks
 Look again at binary
addresses????
 Network number starting with 110
-1100 0000 is equal to 192 in decimal
- 1101 1111 is equal to 223 in decimal
- So, 192-223 is the range of class C networks
 Network number starting with 111
- So, 224-255 is the range of class D & E networks
- Special multicast and experimental groups
 Only first byte tells network class
Classes

0 Network
Class host (net 1 byte/host3)
A – large networks

1 0 Class
 Network
B – medium networkshost
(net 2 bytes/host 2)

1 1 Class
 0 C – small networks (net 3 bytes/host 1) host
Network
57.120.40.55 Class A

130.45.29.255 Class B

200.1.65.72 Class C
 www.cs.pu.edu 129.167.69.45

How do we get the IP address?

 Domain name servers translate the domain name to IP address.

ecom . cs . pu . edu
Web server Sub SLD TLD
Domain
 Domain Hierarchy

int
edu com pk
gov
net org
pu vu

cs ms

ecom1 ecom2
Name Resolution
2
Root
Name
server

1 3

4
ecom.cs.pu.edu Local pu
ecom.cs.pu.edu
client Name Name
8
192.12.69.60 server 5 server

6
CS
Name
server
7

16
 http://pu.edu

 http://cs.pu.edu

 http://ecom.cs.pu.edu

 http://www.cs.pu.edu/folder/home.html
MAC (Media Access Control)
Address
 Consists of 12 hexadecimal characters
 090017A9B2EF
 09:00:17:A9:B2:EF
 09-00-17-A9-B2-EF
 A pattern of 48 bits is available
 2 48 unique MAC addresses possible
 Institute of Electrical and Electronic Engineers (IEEE)
administers the allocation of MAC addresses
Bus Topology
Star Topology

Hub
Ring Topology
 Data Packet

Bridge
S1 S3

S2
 100

140.57 R1 R2 B
A

R3 R4

R5 R6
Data Network
Packet server

1-
2 - MAC?
Router
(Destination) 3 - 009B6D359F1C

4 - Data Packet
sent

Web Server
 Web Server

ISP

IAP3
NAP NAP
MAE
NAP

NAP NAP
MAE

IAP2
IAP1

ISP

Client
 100

140.57 R1 R2 B
A

R3 R4

R5 R6
 E-Commerce: Part-2
Essential Processes of an E-Commerce
System & Web Store Requirements
Learning Objectives

 Identify the major categories and trends of

e-commerce applications

 Identify the essential processes of an

e-commerce system, and give examples of
how they are implemented in e-commerce applications

 Identify and give examples of several key factors and Web

store requirements need to succeed in e-commerce
Learning Objectives

 Identify and explain the business value of several types of

e-commerce marketplaces

 Discuss the benefits and trade-offs of several

e-commerce clicks and bricks alternatives
Introduction to e-Commerce
 Electronic commerce encompasses the entire online process of

 Developing

 Marketing

 Selling

 Delivering

 Servicing

 Paying for products and services

 It relies on the Internet and other information technologies to

support every step of the process
The Scope of e-Commerce
E-Commerce Technologies
Categories of e-Commerce
 Business-to-Consumer

 Virtual storefronts, multimedia catalogs, interactive order

processing, electronic payment, online customer support

 Business-to-Business

 Electronic business marketplaces, direct links between

businesses, auctions and exchanges

 Consumer-to-Consumer

 Online auctions, posting to newspaper sites, personal

websites, e-commerce portals
Essential e-Commerce
Architecture
 Access Control and Security
 E-commerce processes must establish mutual trust and secure
access between parties

 User names and passwords

 Encryption key

 Digital certificates and signatures

 Restricted access areas

 Other people’s accounts

 Restricted company data

 Webmaster administration areas

Profiling and Personalizing
 Profiling gathers data on you and your website behavior and choices

 User registration

 Cookie files and tracking software

 User feedback

 Profiling is used for

 Personalized (one-to-one) marketing

 Authenticating identity

 Customer relationship management

 Marketing planning

 Website management
Search Management

 Search processes help customers find the specific product

or service they want

 E-commerce software packages often include

a website search engine

 A customized search engine may be acquired from companies

like Google or Requisite Technology

 Searches are often on content or by parameters

Content and Catalog
Management
 Content Management Software

 Helps develop, generate, deliver, update, and archive text and

multimedia information at
e-commerce websites

 Catalog Management Software

 Helps generate and manage catalog content

 Catalog and content management software works with profiling

tools to personalize content
 Includes product configuration and
mass customization
Workflow Management
 E-business and e-commerce workflow manage-ment depends on
a workflow software engine

 Contains software model of business processes

 Workflow models express predefined

 Sets of business rules

 Roles of stakeholders

 Authorization requirements

 Routing alternative

 Databases used

 Task sequences
Example of Workflow Management
Event Notification

 Most e-commerce applications are event driven

 Responds to such things as customer’s first website visit and

payments

 Monitors all e-commerce processes

 Records all relevant events, including problem situations

 Notifies all involved stakeholders

 Works in conjunction with user-profiling software

Collaboration and Trading

 Processes that support vital collaboration arrangements

and trading services

 Needed by customers, suppliers, and other stakeholders

 Online communities of interest

 E-mail, chat, discussion groups

 Enhances customer service

 Builds loyalty
Electronic Payment Processes

 Complex processes

 Near-anonymous and electronic nature

of transactions

 Many security issues

 Wide variety of debit and credit alternatives

 Financial institutions may be part of the process

Electronic Payment Processes
 Web Payment Processes

 Shopping cart process

 Credit card payment process

 Debit and other more complex processes

 Electronic Funds Transfer (EFT)

 Major payment system in banking, retail

 Variety of information technologies capture

and process money and credit card transfers

 Most point-of-sale terminals in retail stores

are networked to bank EFT systems
Electronic Payment Example
Securing Electronic Payments

 Network sniffers easily recognize credit card formats

 Encrypt data between customer and merchant

 Encrypt data between customer and financial institution

 Take sensitive information off-line

E-Commerce Application Trends
E-Commerce Success Factors
 Some of the success factors in e-commerce

 Selection and value

 Performance and service

 Look and feel

 Advertising and incentives

 Personal attention (one-to-one marketing)

 Community relationships

 Security and reliability

Differences in Marketing
Web Store Requirements
Developing a Web Store
 Build a website

 Choose or set up web hosting

 Use simple design tools and templates

 Include a shopping cart and payment support

 Market the website

 Include Web page and e-mail advertising

and promotions

 Exchange advertising with other Web stores

 Register with search engines and directories

 Sign up for affiliate programs

Serving Your Customers
 Convert visitors into loyal customers

 Develop one-to-one relationship with customers

 Create incentives to encourage registration

 Use Web cookies to identify visitors

 Use tracking services to record and analyze website behavior

and customer preferences

 Create an attractive, friendly, efficient store

 Offer fast order processing and payment

 Notify when orders are processed and shipped

 Provide links to related websites

Managing a Web Store
 Manage both the business and the website

 Record and analyze traffic, inventory, sales

 Use CRM features to help retain customers

 Link sales, inventory data to accounting systems

 Operate 24 hours a day, seven day a week

 Protect transactions and customer records

 Use security monitors and firewalls

 Use redundant systems and power sources

 Employ passwords and encryption

 Offer 24-hour tech support

B2B E-Commerce
 B2B is the wholesale and supply side of
the commercial process

 Businesses buy, sell, or trade with other businesses

 Relies on multiple electronic information technologies

 Catalog systems

 Trading systems

 Data interchange

 Electronic funds transfers

E-Commerce Marketplaces
 One to Many

 Sell-side marketplaces

 One supplier dictates product offerings and prices Examples:

Cisco.com and Dell.com .

 Many to One

 Buy-side marketplaces

 Many suppliers bid for the business of a buyer e.g., GE or AT&T

 Some to Many

 Distribution marketplaces

 Unites suppliers who combine their product catalogs to attract a

larger audience Examples: VerticalNet and Works.com .
E-Commerce Marketplaces
 Many to Some

 Procurement marketplaces

 Unites major buyers who combine purchasing catalogs

 Attracts more competition and thus lower prices Examples:

the auto industry.

 Many to Many

 Auction marketplaces

 Dynamically optimizes prices, Examples: eBay and

FreeMarkets.
E-Commerce Portals
 B2B e-commerce portals offer multiple marketplaces

 Catalogs

 Exchanges

 Auctions

 Often developed and hosted by third-party market-maker companies

 Infomediaries are companies that serve as intermediaries in e-business and

e-commerce transactions. Examples are

 Ariba, Commerce One, and VerticalNet, to name a few successful companies.

 All provide e-commerce marketplace software products and services to power

business Web portals for e-commerce transactions.
B2B E-Commerce Web Portal
Clicks and Bricks

 Success will go to those who can integrate Internet

initiatives with traditional operations

 Merging operations has trade-offs

 Insert Figure 9.18 here

Clicks and Bricks
E-Commerce Integration
 The business case for merging e-commerce
with traditional business operations

 Move strategic capabilities in traditional operations to the e-

commerce business

 Integrate e-commerce into the traditional business

Sharing of established brands

Sharing of key business information

Joint buying power and distribution

efficiencies
Other Clicks and Bricks Strategies
 Partial e-commerce integration

 Joint ventures and strategic partnerships

 Complete separation

 Spin-off of an independent e-commerce company

 Barnes and Noble’s experience

 Spun off independent e-commerce company

 Gained venture capital, entrepreneurial culture, and flexibility

 Attracted quality management

 Accelerated decision making

 Failed to gain market share

E-Commerce Channel Choices

 An e-commerce channel is the marketing or sales channel

created by a company for its e-commerce activities

 There is no universal strategy or e-commerce channel choice

 Both e-commerce integration and separation

have major business benefits and shortcoming

 Most businesses are implementing some

measure of clicks and bricks integration
E-Commerce Strategy Checklist
 Questions to ask and answer

 What audiences are we attempting to reach?

 What action do we want those audiences to take?

 Who owns the e-commerce channel within the organization?

 Is the e-commerce channel planned alongside other channels?

 Is there a process for generating, approving, releasing, and

withdrawing content?

 Will our brand translate to the new channel?

 How will we market the channel itself?