Frame work of E-commerce Infrastructure

Common business services infrastructure-Messaging and information distributionmultimedia content and network publishingN/w infrastructureInterfacing infrastructure

Policy making support areas 1.People-buyers,sellers,intermediaries, services.IS people 2.Public policy-taxes ,legal , privacy issues,regulations Marketing and advertisements-market research,promotions,web content 4.support services-logistics payments contents and security system 5.Business Partnerships-joint ventures,e-marketplaces,exchanges

Applications-Directing marketing, job search, online banking, E-purchasing, e-

govt, travel , online publishing

Advantages of E-Commerce Electronic Commerce can increase sales and decrease costs.

Advertising done well on the web can get even a small firm’s promotional message out to potential customers in every country in the world.

Businesses can use electronic commerce to identify new suppliers and business partners.

Electronic Commerce increases the speed and accuracy with which businesses can exchange information, which reduces costs on both sides of transaction

E-Commerce provides buyers with a wider range of choices than traditional commerce because buyers can consider many different products and services from a wider variety of sellers.

Electronic payments of tax refunds, public retirement and welfare support cost less to issue and arrive securely and quickly when transmitted over the

internet

Disadvantages of E-Commerce Some business processes such as perishable foods and high-cost, unique items

such as custom-designed jewellery might be impossible to inspect adequately from a remote location.

Costs, which are a function of technology, can change dramatically even during short-lived electronic commerce implementation projects because the technologies are changing so rapidly.

Many firms have trouble recruiting and retaining employees with the technological, design and business process skills needed to create an effective electronic commerce presence.

Firms facing difficulty of integrating existing databases and transaction-processing software designed for traditional commerce into the software that enables electronic commerce.

Companies that offer software design and consulting services to tie existing systems into new online business systems can be expensive.

Consumers are fearful of sending their credit card numbers over the Internet and having online merchants. Consumers are simply resistant to change and are uncomfortable viewing merchandise on a computer screen rather than in

DRIVING FORCES OF E-COMMERCE

E-Commerce is becoming popular, it is worthwhile to examine today’s businessenvironment so let us understand the pressures it creates on organizations andthe responses

Environmental factors that create Business Pressures:

Market, economical, societal and technological factors are creating a highlycompetitive business environment in which consumers are the focal point.

These factors change quickly, sometimes in an unpredictable manner andtherefore companies need to react frequently not only in the traditional actionssuch as lowering cost and closing unprofitable facilities but also innovativeactivities such as customizing products, creating new products or providingsuperb customer service

Economic Forces

One of the most evident benefits of e-commerce is economic efficiency resultingfrom the reduction in communications costs, low-cost technologicalinfrastructure, speedier and more economic electronic transactions withsuppliers, lower global information sharing and advertising costs, and cheapercustomer service alternatives

Categories of Economic Forces

Lower marketing costs: marketing on the Internet maybe cheaper and can reach a widercrowd than the normal marketing medium.

Lower sales costs: increase in the customer volume do not need an increase in staff as thesales function is housed in the computer and has virtually unlimited Accessibility

Lower ordering processing cost: online ordering can be automated with checks to ensurethat orders are correct before accepting, thus reducing errors and the cost of correctingthem.

New sales opportunities: the website is accessible all the time and reaches the globalaudience which is not possible with traditional storefront

DRIVING FORCES OF E-COMMERCE Market Forces Corporations are encouraged to use e-commerce in

marketing and promotion to capture international markets, both big and small. The Internet is likewise used as a medium for enhanced customer service and support.

It is a lot easier for companies to provide their target consumers with more detailed product and service information using the Internet

Strong competition between organizations, extremely low labour cost in some countries, frequent and significant changes in markets and increased power of consumers are the reasons to create market forces

DRIVING FORCES OF E-COMMERCE Technology Forces

The development of information and communications technology (ICT) is a key factor in the growth of ecommerce.

For instance, technological advances in digitizing content, compression and the promotion of open systems technology have paved the way for the convergence of communication services into one single platform.

This in turn has made communication more efficient, faster, easier, and more economical as the need to set up separate networks for telephone services, television broadcast, cable television, and Internet access is eliminated.

From the standpoint of firms/ businesses and consumers, having only one information provider means lower communications cost

DRIVING FORCES OF E-COMMERCE-Societal and environmental forces

To understand the role of E-commerce in today’s organizations, it becomes necessary to review the factors that create societal and environmental forces.

Changing nature of workforce

Government deregulations

Shrinking government subsidies

Increased importance of ethical and legal issues

Increased social responsibility of organizations

Rapid political changes

The Benefits of EC

The new markets could be accessed through the online and extending the service offerings to customers globally.

Internet shrinks the globe and broaden current geographical parameters to operate globally

Marketing and promotional campaigns can be done globally at the reduced cost.

Retaining the customer and the customer services could be improved drastically.

Strengthen relationships with customers and suppliers

Streamline business processes and administrative functions

No added sales staff

Benefits of EC A catalogue which is quickly and easily updateable. This means

that when prices or stocks are changed, you don’t have to havehundreds or thousands of obsolete catalogues lying around. Youdon’t have to wait for the printer to deliver the catalogue beforethe new prices can come into effect.

The facility to advertise daily, weekly or monthly ‘specials’ and sales, or any special discounts - and they can be changed within minutes, when and if necessary.

You can also add a marketing message which highlights your strengths, such as the range and quality of your products or services - or anything else you want to tell your customers

Benefits to Organizations•

Electronic commerce expands the marketplace to national and international markets. With

minimal capital outlay, a company can easily and quickly locate more customers, the best

suppliers, and the most suitable business partners worldwide.

Electronic commerce decreases the cost of creating, processing, distributing, storing, and

retrieving paper-based information. For example, by introducing an electronic procurement

system, companies can cut the purchasing administrative costs by as much as 85 per cent.

Ability for creating highly specialized businesses. For example, dog toys which can be

purchased only in pet shops or department and discount stores in the physical world, are sold

now in a specialized www.dogtoys.com

Electronic commerce allows reduced inventories and overhead by facilitating “pull”-type

supply chain management. In a pull-type system the process starts from customer orders and

uses just-in-time manufacturing.

Benefits to Organizations

Electronic commerce reduces the time between the outlay of capital and thereceipt of products and services.

Electronic commerce initiates business processes reengineering projects. By

changing processes, productivity of salespeople, knowledge workers, and

administrators can increase by 100 per cent or more.

Electronic commerce lowers telecommunications cost-the Internet is muchcheaper than VANs

Other benefits include improved image, improved customer service, newfound

business partners, simplified processes, compressed cycle and delivery

time, increased productivity, eliminating paper, expediting access to

information, reduced transportation costs, and increased flexibility

Benefits to Consumers

Electronic commerce enables customers to shop or do other transactions 24 hours aday, all year round, from almost any location.

Electronic commerce provides customers with more choices; they can select.

Electronic commerce frequently provides customers with less expensive products andservices by allowing them to shop in many places and conduct quick comparisons.

In some cases, especially with digitized products, EC allows quick delivery.

Customers can receive relevant and detailed information in seconds, rather than days orweeks.

Electronic commerce makes it possible to participate in virtual auctions.

Electronic commerce allows customers to interact with other customers in electroniccommunities and exchange ideas as well as compare experiences.

Electronic commerce facilitates competition, which results in substantial discounts

The Limitations of EC

The limitations of EC can be grouped into technical and non-technical categories.

Technical Limitations of EC

There is a lack of system security, reliability, standards, and some communication protocols.

Insufficient telecommunication bandwidth.

The software development tools are still evolving and changing rapidly.

It is difficult to integrate the Internet and EC software with some existing applications and databases.

Vendors may need special Web servers and other infrastructures, in addition to the network servers.

Some EC software might not fit some hardware, or may be incompatible with some operating systems or other components

Non-technical Limitations

Of the many non-technical limitations that slow the spread of EC, the following are

the major ones.

Cost and justification: The cost of developing EC in-house can be very

high, and mistakes due to lack of experience may result in delays.

There are many opportunities for outsourcing, but where and how to do it is not a simple

issue. Furthermore, to justify the system one must deal with some intangible benefits (such as improved customer service and the value of advertisement), which are difficult to quantify.

Security and privacy: These issues are especially important in the B2C area,

especially security issues which are perceived to be more serious than they really are when appropriate encryption is used. Privacy measures are constantly improved. Yet, the customers perceive these issues as very important, and the EC industry has a very long and difficult task of convincing customers that online transactions and privacy are, in fact, very secure.

Lack of trust and user resistance: Customers do not trust an unknown

faceless seller (sometimes they do not trust even known ones), paperless transactions, and electronic money. So switching from physical to virtual stores may be difficult.

Other limiting factor:. Lack of touch and feel online. Some customers like

to touch items such as clothes and like to know exactly what they are buying.

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Many legal issues are as yet unresolved, and government regulations and

standards are not refined enough for many circumstances.

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Electronic commerce, as a discipline, is still evolving and changing rapidly.

Many people are looking for a stable area before they enter into it.

There are not enough support services. Forexample, copyright clearance centres for EC transactionsdo not exist, and high-quality evaluators, or qualified ECtax experts, are rare.

In most applications there are not yet enough sellers andbuyers for profitable EC operations.

Electronic commerce could result in a breakdown ofhuman relationships.

Accessibility to the Internet is still expensive and/orinconvenient for many potential customers. (With WebTV, cell telephone access, kiosks, and constant mediaattention, the critical mass will eventually develop.)Despite these limitations, rapid progress in EC is takingplace.