Unit-3

E-COMMERCE
Definition
The paperless exchange of business information using Electronic Interchange (EDI),
Electronic mail (e-mail), computer bulletin boards, Electronic Funds Transfer(EFT), and
other Internet applications, e-commerce provides ways to exchange information between
individuals, companies, countries and, computers.

Definition from different perspectives:

1. Communication perspective: E-Commerce is the delivery of Information,
products/devices or payments via telephone lines, computer networks or any other
means.
2. Business perspective: E-Commerce is the application of technology towards the
automation of business transactions and workflows.
3. Service perspective: E-Commerce is the tool that addresses the drive of firms,
consumers and management to cut service costs, improving quality of goods and
increasing the speed of service delivery.
4. Online perspective: E-Commerce provides the capability of buying and selling
products and information on the internet and other online services.

Types of E-Commerce
Three general classes of E-Commerce Applications:
1. Inter- organizational Electronic Commerce:
a) Supplier Management
b) Inventory Management
c) Distributed Management
d) Channel Management
e) Payment Management
2. Intra- Organizational Electronic Commerce
a) Workgroup Communication
b) Electronic Publishing
c) Sales Force Productivity
3. Customer – to- Business Electronic Commerce
a) Social Interaction
b) Personal Finance Management
c) Purchasing Products and Information

Benefits Of E-commerce
1. To Organization
a) Expands the market place
b) Decreases the cost
c) Reduced Inventories
d) Expansive Customization
e) Reduces the Time
f) Business Processes become easier to handle
 g) Lowers Telecommunication cost
h) Improved Customer Service
i) Compressed Business Cycle and delivery
j) Eliminate paper
k) Expediting access to Information
l) Reduce Transportation Costs
2. To Consumers
a) 24 hours availability
b) More choices in service and product
c) Selection of products according to the budget
d) Quick delivery of products and services
e) Receiving quick and detailed information
f) Participation in Virtual Auction
g) Interaction with other customers
h) Feedback of the product and services
3. To Society
a) Less traffic on roads and lower air pollution
b) People can buy more and increase their standard of living
c) People around the world can enjoy products and services of any country
d) Facilitates delivery of public services such as healthcare, education etc.
e) Availability of services and product at a reduced cost and improved
quality

Limitations of E-Commerce
1. Technical Limitations:
a) Lack of system security, reliability, standards and some communication
protocols
b) Difficulty in integrating Internet and EC software with some existing
applications and databases.
c) EC software might not fit with some Hardware
2. Non-Technical Limitations
a) High Cost
b) Security and privacy
c) Lack of trust and user resistance
d) Lack of touch and feel online
e) Legal Issues are unresolved and governing regulations and standards are
not refined enough
f) Most applications are not have enough sellers and buyers
g) Breakdown of Human Relationships
h) Accessibility to customers is still expensive or inconvenient.

Electronic Commerce Framework

1. E-commerce applications are built on the existing technology,
infrastructure- computers, communication networks and communication
software forming the Information Superhighway.
2. Building blocks in the Infrastructure are:
a) Common Business Services: Facilitates the buying and selling
process
b) Messaging and Information Distribution: Means of sending and
retrieving Information
c) Multimedia Content and network publishing: For creating a
product and a means to communicate about it.
d) Information Superhighway: Foundation for providing the highway
system along which e-commerce travels.
e) Two pillars supporting E-Commerce Applications and
Infrastructure are:
i) Public Policy: Govern issues – Universal access, privacy
and Information pricing
ii) Technical Standards: Dictate nature of Information
publishing, user interfaces and transport