| E-Commerce Story |
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Doing Business with a " E
" : The E-commerce story
Introduction
Electronic Commerce (E-commerce of EC) is the exchange of business information
using electronic formats, including Electronic Data Interchange (EDI, Electronic
Mail (e-mail), Electronic Bulletin Boards (EBBs) and Electronic Funds
Transfer(EFT). E-commerce Technologies are designed to replace traditional
paper-based workflow with faster, more efficient and reliable communications
between computers. To conduct business in the current environment using
E-Commerce technologies requires that a business have access to a computer and a
modem. This article is intended to introduce you to E-Commerce technologies
mentioned above, to provide you with an overview of the use of E commerce
technologies in the commercial arena and to show you how to use these
technologies to benefit your business.
E-commerce is what happens when you
combine the broad reach of the Internet with the vast resources of traditional
information technology systems. It uses the Web to bring together customers,
vendors, and suppliers in ways never before possible e-commerce is here and
presents abundant opportunities. Companies around the world already but and sell
over the Internet. They connect with customers, suppliers and each other. They
do business on the WEB, and consequently, they do more business. There are
challenges like security, scalability and reliability. They are real, but they
are surmountable. E-commerce is about web enabling your core business processes
to improve customer service, reduce cycle time, get more results from limited
resources, and actually sell things. In its simplest terms electronic commerce
is the process of two or more parties making business transactions via computer
and some type of network - e.g. a direct connection or the Internet. This
includes business-to-business transactions, online retail, and the
digitalization of the financial industry. Some experts and leading Net
Entrepreneurs even argue that electronic commerce includes all the steps that
occur in any business cycle, such as placing ads, completing invoices, and
providing customer support. The term "e-commerce", often used
interchangeably with IBM's coined term "e-business," covers a lot of
ground and refers to all these areas.
Background
E-commerce actually began in the 1970s when larger corporations started creating
private networks to share information with business partners and suppliers. This
process, called Electronic Data Interchange (EDI), transmitted standardized data
that streamlined the procurement process between businesses, so that paperwork
and human intervention were nearly eliminated. EDI is still in place, and is so
effective at reducing costs and improving efficiency that an estimated 95% of
Fortune 1,000 companies use it. It was, and is, the foundation of electronic
commerce.
Today, electronic commerce increasingly
refers to business conducted over the Internet. EDI, for example, is being
brought to the Internet and allowing companies to save money by eliminating the
old system's expensive private networks and by expanding reach to include more
businesses on the supply chain. Other business-to-business transactions are
simply moving to the web without using the standardized forms required by EDI.
But the e-commerce buzz that you hear on
the radio, see on TV, and read in the papers and online refers to online
retailing -- using the web to sell goods, services and information to consumers.
Online retailing began four years ago, and was pioneered largely by Internet
companies that didn't (and some still don't) perform traditional retail, such as
Amazon.com and CD Now.
More recently, brand names like Barnes
and Noble, the Gap, and Wal-Mart and Indian companies like BPB publications and
rediff on the net have set up shop on the Net, and many experts believe that
these and other brand names will be able to establish long-lasting presence on
the Web. Today, all a person needs is a computer, a browser, and Internet
access, and he or she can buy flowers, airline tickets, and even a car.
Tomorrow. who knows. The sky's the limit.
Advantages and Pitfalls
Most e-commerce studies cite speed and convenience as the reason for the
e-commerce upsurge. I think there's something more fundamental going on.
Something that is both an opportunity-for consumers-and a danger-to old-line
businesses. In short, e-commerce obliterates the barriers that have long propped
up traditional retailing.
Barriers and Geography can be accessed
every corner of the globe without building physical stores and a website .Time,
it's costly to keep a physical store open 24 hours a day. Web sites are always
open. so also and switching cost comparison-shopping is a breeze, because all
shops are just a click away. Businesses can no longer rely on incomplete
information to keep customers paying inflated prices. The competition is just a
click away. No longer are customers locked in by the time and hassle of finding
another supplier.
Some of the obstacles that may delay the
success of online commerce are that most computer users were about transaction
security, and get so for stated that the abort transaction. only a few online
purchases are gift related and surfers also felt about inadvertently patronizing
a fly-by-night operator. These are all the disadvantages assuming an online
audience. Given the facts of Low-pc penetration and Internet Usage e-commerce as
an industry has still a long way to go.
Setting up a E-Commerce Store
The hottest game on the Internet right now is e-commerce, which by now ahs a lot
of players and few winners. One of the biggest challenges in developing a
successful online storefront is choosing the right software solution for your
site, which can make the difference between making money and losing money on the
Web.
An electronic commerce business is no
less demanding than any other type of business operation, but it is also quite
different. Instead of the traditional brick and mortar storefront, everything
happens in the form of bits and bytes flowing over the Internet and what makes
it tick is e-commerce software. To engage in pages that can inform customers,
display products, conduct purchase transactions, and provide feedback and
results. The most critical decision is determining which e-commerce software a
company should use to do all of this. One complex solution is to develop your
own customized software. This requires the work of many specialists in web and
programming languages (HTML, Java, etc.) Most companies would fare better by
investing in a commercial software solution provider.
There are now dozens of companies
offering virtual storefronts and shopping carts on secure servers. The payment
part can be handle by products from companies such as IBM and Micro Soft and
specialist companies such as Icat and vision factory. In some cases you do not
even have to buy the software but simply rent a website and programming from a
webhost.However the first decision to be taken is of deciding what kind of
e-commerce you want-consumer, business to business. or both. the consumer side
of e-commerce is retail trade, where companies offer products for immediate
purchase.(This distinguishes e-commerce from sites that merely promote products)
the business to business side of e-commerce e-commerce can involve both
wholesale purchasing and electronic data transfers(payments, invoices) between
business partners. not all e-commerce software can do both, not without
additional programming and expert configuration.
Indian businesses trying to get into
e-commerce maybe frustrated, since in India RBI does not allow credit card
information to be taken over the internet without a legally binding signature.
and until the Indian government recognizes digital signature for customer
verification over the Internet e-commerce growth in India will be slow.
E-Commerce Software and Security Issues
Because they are impersonal, Internet transactions can get downright touchy. A
sense of security needs to be established without creating the feeling of fort
Knox. Customers must be able to select a mode of payment and the software must
verify their ability to pay. This can involve credit cards, electronic cash or
purchase orders. specialized software such as cyber cash and Microsoft wallet
can verify the purchaser and the purchase. e-commerce software usually work with
the Secure sockets layer (SSL) developed by Netscape or the Secure Electronic
Transaction( SET) technologies for encryption of data transmission. The more of
these supported by an e-commerce package, the better. Most e-payment solution
providers will require that the company establish a special bank account to
handle the online transactions. More on opening your online store later on in
this article.
With security being an issue with most
online customers merchants and others are looking to exploit the huge potential
on-line market with two choices: use conventional follow up systems like faxes
and phone numbers to make the customers feel more secure or develop better
systems of online security. While the first will probably continue, its second
choice which is gaining more credibility- Digital cash. Encryption as already
discussed is being used to protect information while it is being transmitted
between a customer and a merchant on the Internet. Netscape uses the secure
socket layer in their commerce server to provide server authentication, data
encryption, and message integrity. SSL provides capabilities similar to the more
familiar " berkely sockets" or Winsock services. SSL sits between
application protocols such as http, telnet ftp etc and the underlying protocol
TCP/IP. but unlike ordinary socket connection, once your web browser has
established a connection to a server using SSL, you know which merchant you are
connected to , and you that your communication with that merchant is secure from
eavesdropping or tampering.
The method used to establish identity is
based upon an object called digital certificate. A digital certificate simply
ties together a public key with say the name and address of the customer or
merchant. The trick is that these certificates are signed by a trusted third
party, in much the same way that the passport is signed by the government that
issues it. Verisign, a spin off from RSA data security is in the business of
issuing these certificates which they called Digital IDs. Currently these are
digital IDs are not recognized by the Indian government.
The other methods besides Credit card
processing are ecash and ecredit , both of which require you to set up an
account with an ecash provider and buy only from merchants who have also
registered with that provider. When you purchase something online it gets
charged to your real credit card, with the provider taking extra measures to
protect your security. Although electronic or digital cash is not yet wide
spread, banks are issuing it allowing you to purchase items at registered retail
sales. Electronic cards are coming up fast employing coded messages secret
numbers and electronic buyer identification. Besides Verisign another guarantee
of security can be found in Secure Electronic Transaction (SET) . Set was
developed by Visa and master card with participation from several technology
companies including IBM and Microsoft. This system means that your entire credit
card number is never travelling across the net- rather pieces of it are- and
that no human eye sees the entire card number
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