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E-Commerce: Business on the Internet

E-Commerce: Business on the Internet. James Vickers, Boston College http://www.jamesvickers.com/education jamie@boston.ac.uk. What is it?. E-Commerce means “Electronic Commerce” E-commerce encompasses the following: Electronic trading Commercial presence Business to Business transactions

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E-Commerce: Business on the Internet

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  1. E-Commerce: Business on the Internet James Vickers, Boston College http://www.jamesvickers.com/education jamie@boston.ac.uk

  2. What is it? • E-Commerce means “Electronic Commerce” • E-commerce encompasses the following: • Electronic trading • Commercial presence • Business to Business transactions • Customer interaction • Inter-Business electronic communications that improve productivity • Companies that use electronic technology to perform business activities

  3. Examples of Technological Developments • Mass-market computing and networking • Cost has decreased • 24/7 Home dial-up connection for approx £15 pcm • Usage increased source nua.ie (2001) • It is no longer just Hypertext, it is Hypermedia • World-Wide Web • Digital music, images, text, etc. • “Search” available with mass data processing • “Strong” cryptography – secure systems available

  4. Examples of Business Developments • New ways to conduct old business • New companies • New capabilities for old companies • Death of some old companies • “Empowered consumers” ?? • New types of business • More differentiation • More competitors – good for the consumer

  5. Why trade online? • E-commerce provides businesses with: • 24/7 Access to customers • Diverse customer base: • Abilities (Motor, audible and speech) • Disabilities are easier to overcome by the use of electronic systems (if systems are implemented correctly!) • Provide facilities to remote customers • Historically, remote and diverse communities have not had access to specialist services • Now all communities, globally, can access specialist services

  6. Why trade online? • E-commerce means: • Stock does not “have” to be available • Companies can advertise, and deliver in 28 days • Companies can act as a portal for other companies • Staffing • Conventional shops must be staffed – either by the owner, or employed staff • Web sites may not – may just be one person, with a single computer at home • Overheads • Shops, electric, water, council rates, rent, etc. • Technology has decreased in price, therefore, ecommerce is cheaper to create and operate. If developed correct, an ecommerce “presence” can be cheaper than the physical presence.

  7. Typical Services • The following are approximate services available to people in the U.K: • Typical services for a rural village (approx 500 inhabitants): • E.g: Public House, Village Store • Typical services for a rural village (approx 1500 inhabitants): • E.g: Public House, Village Store, Pharmacy, Butchers, Bakery, Fast Food outlet, Garage, Hairdressers. • Typical Services for a rural town (approx 15,000 inhabitants): • E.g: Clothing, Electrical Goods, Supermarket, Restaurants, Home Improvements, Department Stores, Motor Vehicle Traders • Typical Services for a city (approx 1,000,000 inhabitants): • E.g. Lighting Specialists, Designer Clothes Store, Aquatics Centre, Gift Shops, Multi-National Chain Stores.

  8. So what does this mean? • If you study at DMU, you will not have to worry about where to shop – the shops are on your doorstep • If you studied at Boston College, would you be able to visit a “Next” or “Discovery” store? • No – you would have to travel at least 35 miles. • Does everybody have access to a local bank? • No – but with online banking, you do.

  9. The diversification • Trading fall into 3 categories: • Business to Business (B2B) • E.g: Wholesalers listing current stock prices to traders, and allowing automated trading • Business to Consumer (B2C) • E.g: On-line customers purchasing items, allowing online purchasing • Consumer to Consumer (C2C) • E.g: Auction or peer-to-peer sales / adverts • How has this improved business? • Automation of sales, meaning realistic and small stock levels. • Immediate sales, monies and delivery processed “at the click of a button”. • Real-time prices, meaning cheaper prices

  10. The possibilities... • Take this scenario: • John lives in a rural village, he has motor impairments that force him to be unable to drive, and public transport does not run near him. He could use a taxi, but it is £20 per trip to the nearest town. • How can he manage? • Ecommerce: • Online banking • Online shopping

  11. The problems • Security – can it be guaranteed • Technology – you must have it! • Technology – it is expensive! • Telephony – you must have it too! • Experience – It is far from a simple task to operate and use ecommerce systems

  12. An example • Lloyds: • LloydsTsb is the banking arm of Lloyds International • One of the only banks left with rural branches found in villages • They can reach even more customers by using Internet Banking • Improves customer relations, allows locus of control to user. • Allows, and promotes the use and purchase of their goods and services. • Provides automation in services, and communications. • Removes necessity for permanent and over-use of branches • Customers can do everything, and in some cases more than at a cash point or their local branch (especially if rural): • Manage direct debits and standing orders • Apply on-line for credit cards, loans, foreign currency • View permanent and previous bank statements

  13. An example • Lloyds insurance recently announced an initiative to automate their insurance claims. • This project would cost £23m • However, they estimate the delay in claims, which is caused by lack of automation, costs £25m per year. • Benefits to Lloyds by saving money, and increasing productivity • Saves the customer months of waiting for paper based claims to be processed and transferred • Is this then a “Win, Win” situation?

  14. But... • How can be information be made secure? • What if someone gained control of your bank account? • Usernames and passwords used – securely checked by application and posting first • Memorable information – you have to set a second password • Secure web site used – 128Bit SSL secured. • Fraud • Well publicised! • Barclays bank – user logged on, everyone with the same surname had their details revealed to the one user • LloydsTsb – emails sent randomly, pretending to be Lloydstsb, asking for the recipient to email their account and sort code back to the sender! • “Security Code” – The three digit ID on the back of your debit / credit card – purpose is ensure that the user of the card in an ecommerce transaction can prove they have the card. • Chip & Pin – the new way to protect. You will soon be asked for your PIN number when you purchase online.

  15. Business Conflicts • Privacy vs. efficiency • Data protection act requires privacy, business requires efficiency and speed • Anonymity vs. accountability • Users want to anonymous, businesses do not want to pry, but there is a line where tracking and monitoring needs to take place • Commerce vs. law enforcement • Speed is the essence, but laws must be adhered to. The operator is responsible, and accountable. • Standardization vs. innovation • Standards protect technology, innovation leads and advances it. A fine line between leading, and breaking what we know and can support. • Global technology vs. local expectations • Does the service meet the local expectations – and if so, does that still support the global outlook. Examine printing something as simple as “Please enter your Christian name” – is this racist, or simply a cultural notation? What is the difference in the colour “Red” between China and the UK?

  16. Challenges in E-commerce • We need a three-tier architecture • This is a three-tier failure system too • This is a three-tier system of expertise • This is a three-tier system of security vulnerabilities • This is a three-tier system of expenditure • This has become cheaper • People have become more IT literature • Through practice • Through initiative - such as the government’s desires for the e-Government to save money by automation – they need an IT literate society • Through training – free course in basic IT, such as BBC’s WebWise courses

  17. Challenges in E-Commerce • Some services suffer Congestion • At some point value can decrease with expansion. e.g. America Online flat-rate fiasco • We must take into consideration the scale of what we intend to do online. • Gaining and retaining a customer base • Via incentives: special recognition, bias, gifts, e-mail reminders • Revenue • Sales alone is often not enough • Advertisement through traditional adverts or “click throughs” • Free Speech? • Relationship with advertisers & among users • Relationship with suppliers and compatriots

  18. Essential Reading • Current Internet User Statistics: • http://www.clickz.com/stats/ • http://www.clickz.com/stats/big_picture/geographics/article.php/5911_151151 • LloydsTsb facilities • www.lloydstsb.com • LloydsTsb security warnings • ZDNet • www.zdnet.com • Computer Weekly Newspaper

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