CSIT 72 Electronic Commerce Technologies

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CSIT 72Electronic Commerce Technologies

• Lecture 1 - Introduction to Electronic Commerce
• (Adapted from Dr. Ahmad Kayed, Monash University)

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Electronic Commerce Introduction

• What is Electronic Commerce?
• Why Electronic commerce?
• The Internet and Electronic Commerce.
• Electronic Commerce Technologies Why how?

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Electronic Commerce

• Electronic commerce describes the use of
  electronic means to pursue business objectives.
• It relies on a wide range of modern technologies,
  such as the World Wide Web, telecommunications,
  database technologies,agent technologies business
  intelligence, multimedia and user interfaces.

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Electronic Commerce

• Electronic commerce includes the ability to
  order, track inventory, and invoice
  automatically the capability of designing,
  testing and delivering products designed with
  input from multiple partners and the opportunity
  to reduce cycle times, to operate in asynchronous
  geographic locations and time periods.
• However, it goes beyond the traditional business
  models by introducing a new class of (digital)
  products and services and electronic delivery of
  information goods.

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Electronic Commerce Technologies

• Electronic Commerce

Technology
Business
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What is Electronic Commerce?
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Electronic Commerce is

• " The process of conducting all forms of business
  activity between entities using appropriate
  electronic methodologies and procedures in order
  to achieve theorganisation's objectives"
• Electronic Commerce Australia

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Electronic Commerce is....

• Doing business in a paperless fashion.For
  example
• Use of Email (Electronic mail)
• Paying bills by telephone
• Computer to computer transactions(EFTPOS, EDI
  etc.)
• Use of the Internet for business
• Replacement of cash with smart cardsand
  electronic money

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Electronic commerce is

• a modern business methodology that addresses the
  needs of organizations, merchants, and consumers
  to cut costs while improving the quality of goods
  and services and increasing the speed of
  services.
• EC covers any form of computerized buying and
  selling, both by customers and from company to
  company.
• EC is associated with the buying and selling of
  information, products, and services via computer
  networks.

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Key aspects of EC

• Networks -Internet, Value added Network (VAN),
  any other network. For this reason many
  researchers differentiate between e-commerce and
  Internet-commerce.
• Interactions or/and transactions - buying,
  selling, ordering, querying, etc.
• Parties sellers, suppliers, retailers, buyers,
  mediators, brokers, individual, commercial
  objects, administration objects (governments),
  etc.
• Interactions are done electronically and parties
  are communicating electronically.

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Electronic Commerce is...
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Electronic Commerce

• UsingEmail, E-forms, EDI, Facsimile,
  Interactivevoice systems, Touch phone
  technology,Multimedia, Smart Cards, Bar
  codescanners, etc.
• Via
• The Internet (or its equivalent) and WWW
• Value added networks, Private networks,Microwave,
  Cable TV, etc., etc.

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Electronic Commerce

• Why Transact Business Electronically?
• Efficiency gains transactions can be processed
  quicker
• Time exchange of information more timely
• Accuracy errors from re-keying data eliminated
• Productivity human resources can be
  re-allocated
• Control manual controls over risks can be
  replacedwith more effective automated
  systemcontrols

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Electronic Commerce

• Electronic Commerce
• Not
• "whether
• but
• "when" and "how"

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Electronic Commerce
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Electronic Commerce Technologies Why and How?

• Web information to support e-commerce activities.
• New e-commerce tools and technologies.
• New Web data models and query languages.
• Web site management system.
• Auction and negotiation issues.
• The management of Web data
• The advent of XML and other standards.

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Technology of Internet Business
Some slides have taken from Technology of
Internet Business by Elaine Lawrence
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History of eCommerce

• Many terms electronic commerce (e-commerce),
  eCommerce, iCommerce, Internet commerce,
  e-business and digital commerce
• M-commerce is business carried out on mobile
  phones and personal digital assistants (PDA) such
  as palm pilots

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Internet
Internet
Firewall
Intranet
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National Science Foundation

• Internet established in 1960 in the US for
  non-profit organizations
• Mid 1980s the NSF created high speed long
  distance telecommunications network into which
  other networks could be linked
• By 1991 the NSF had dropped its restrictive usage
  policy

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World Wide Web

• Arrival of WWW caused the business community to
  take notice
• Web is a graphical hypertext environment that
  operates within the Internet
• The protocol that underpins the Web is Hypertext
  Transfer Protocol (HTTP)
• E-businesses use Secure Hypertext Transfer
  protocol

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Multi-Tier
Internal Corporate Network
ERP Mainframes
Legacy Systems
Database Servers
Secured Neutral Zone
Application Servers
Static Pages Dynamic Pages
Web Servers
Internet
Routers Load balancers Firewalls
Network
Internet
Browser Helper Applications
End User
Clients
PriceWaterhouse Coopers
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Multi-Tier

• Client (Browser, PDA, another server, Web TV)
• Presentation to the user
• Formatting (application of stylesheet, rendering
  of HTML)
• User interface
• Helper applications eg PDF, multimedia
• Web server
• Creation of the HTML, XML etc (ASP, JSP, PHP)
• Single point of reference for the client
• Formatting (creation of HTML)
• Application Server
• Business logic programs (COM, EJB)
• Single point of reference for application logic
• Database server
• Data storage
• Legacy and Corporate systems
• ERP, MIS

PWC
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New Technologies

• Since the development of WWW, many new
  technologies and software applications have been
  released
• These technologies include
• Credit card processing
• Interactive advertising
• Image transmission
• Audio and video streaming

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The Advent of Electronic Commerce

• Electronic Funds Transfer (EFT), Personal
  Computer (PC) banking and Automated Clearing
  House (ACH) are early versions of e-commerce
• EFT utilizes computer and telecommunication
  components both to supply and to transfer money
  or financial assets

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Overview of EDI

• EDI is very expensive so it is mainly used by
  large companies
• A clearing house collects the various EDI payment
  authorizations from customers and settles
  accounts once a day
• Internet EDI integrates existing systems with
  up-to-date e-commerce packages

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The Digital Economy

• Entire Internet is accessible to users and is
  unrestricted
• Businesses can be established on the Internet
  very quickly
• Many Internet based businesses have been
  developed as overlays reducing start up costs
• Early 2000 many dot.com companies collapsed

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M-Commerce

• m-commerce or w-commerce are terms for mobile or
  wireless e-commerce
• WAP is emerging technology that is common in
  Europe mobile devices have web-ready
  micro-browsers
• WAP is a set of communication protocols to
  standardize the way that wireless devices can be
  used for Internet access

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M-Commerce

• Smart phones, using bluetooth technologies, offer
  fax, email and phone
• Bluetooth is a computing and telecommunications
  industry specification describing how devices
  interconnect using a short range wireless
  connection

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M-Commerce

• These areas utilize m-commerce
• Financial services customers can use hand held
  devices to access accounts, pay bills
• Telecommunications service changes, bill
  payments and account reviews can be conducted
  from a hand held device
• 50 percent of Portuguese use ATM bill payment
  facilities to reload their mobile credit

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M-Commerce

• Service Retail allows customers to pay for
  services on the fly
• Pilot schemes in Scandinavia allow for consumers
  to use their mobile phones to pay for unattended
  car parking, soft drinks in vending machines
• Information Services delivery of financial news,
  sports figures and traffic updates to a mobile
  device

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Types of Electronic Commerce

• There are nine segments to e-commerce
• B2C business to consumer
• B2B Business to business
• B2G Business to government
• C2B consumer to business
• C2C Consumer to consumer
• C2G consumer to government
• G2B government to business
• G2G government to government
• G2C government to consumer

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Types of Electronic Commerce

• B2B exchanges are considering shifting to peer to
  peer networks (P2P)
• This allows participants to exchange information
  directly bypassing central exchanges
• The basic technology for this paradigm shift is
  already available as seen in Gnutella
• http//gnutella.wego.com/

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Business to Consumer B2C

• Growth of this sector is extremely fast as seen
  by sites such as Schwab, eTrade, Amazon
• http//www.etrade.com.au
• If it reaches critical mass, real world traders
  could experience problems
• Online businesses are also under threat when
  there is an oversupply

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Business to Business B2B

• Businesses are using the Internet to hook up with
  suppliers distributors resellers consultants
  and contractors
• These collaborative networks are called extranets

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Consumer to Business C2B

• www.priceline.com epitomizes this type of
  business
• Developed the reverse auction model where bidders
  set their price for items and a seller decides
  whether to supply them

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Consumer to Consumer C2C

• Usually in the form of online auctions consumers
  trade with each other using sites such as eBay
• http//www.ebay.com
• http//www.ubid.com
• http//www.safetytechnology.com/auctions.htm

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Government to Government G2G

• Particularly important in Australia using the
  Internet to communicate between federal and state
  governments
• Australia has an office for government Online OGO
• http//www.ogo.gov.au/

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Government to Business and Government to Consumer
G2B and G2C

• During the transition to the GST in July 2000 the
  Australian Taxation Office relied heavily on the
  Internet
• http//www.ato.gov.au
• Businesses were able to apply for their ABN over
  the web
• Speeding tickets and traffic fines may be paid
  over the Internet

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Technology for the New Age of BusinessThe
Internet

• It is a public, cooperative, and self sustaining
  facility used by hundreds of millions of people
  worldwide
• Uses a portion of the total resources of the
  currently existing public telecommunications
  network
• What distinguishes the Internet is its use of a
  set of protocols called TCP/IP

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Intranets

• Privately developed networks that operate within
  organizations
• Intranets operate as separate networks within the
  operations of the Internet

Intranet
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Extranets

• Links businesses to their suppliers using
  Internet technology
• These networks are not always in the public
  domain
• One example is SITA supporting booking systems of
  most airline companies

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Extranet VPN
Internet
Firewall
Intranet
VPN
Extranet
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Extranets

• Wide Area Networks (WANs) can span a large
  geographical area
• Nodes on the network may communicate via
  telephone wires or satellites
• Local Area Networks are normally restricted to
  one geographic region or department such as a
  university department

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Extranets

• Groupware is software shared on extranets such as
  Lotus Notes and Microsoft Exchange
• http//www.microsoft.com
• Attention must be paid to appropriate security
  measures

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Ultranets

• This will exist once Internet tools mature into
  next phase
• Building blocks for the Ultranet include
• Java
• Internet protocol version 6
• Secure electronic transactions (SET)
• Object orientated database management systems
  (OODBMS)
• Extensible Markup Language (XML)

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Hypertext Transport Protocol

• HTTP is the most basic protocol by which HTML
  resources are fetched across network connections
• Hypertext is software technology that allows for
  fast and flexible access to information

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Transmission Control Protocol/Internet Protocol

• TCP/IP is the set of communication protocols used
  by the Internet to connect dissimilar systems and
  control the flow of information
• IP is a packet forwarding protocol that splits up
  packets automatically to send large messages
  across the networks, then reassembles them at
  destination

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Bluetooth

• Jini Initiative enables desktop computers, PDAs
  and mobile phones to collaborate
• Bluetooth Wireless Personal Area Networking
  (WPAN) creates a bubble of wireless connectivity
  for personal electronic devices

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Uniform Resource Locators

• This is the unique address of a web page
• Each URL defines
• Internet protocol being used
• The server on which the web site is stored
• The path that will transmit the document
• Internet uses a IP address to send data to a
  specific destination computer

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Browsers

• Web browsers are software packages enabling users
  to access sites
• Technically a client program using HTTP to make
  requests of web servers throughout the Internet
  for the user
• Netscape Navigator and Internet Explorer are
  highly competitive browsers
• Opera new browser

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Client/server Architecture

• Refers to a pair of machines or a pair of role
  designations
• A client requests services and a server provides
  them.

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JAVA

• The programming language used as a software
  development tool designed for use in a
  distributed environment
• JAVA applets are small programs written in JAVA
  that are downloaded onto client machines where
  they execute

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Search Engines

• Assist the user in finding web pages
• An alternative is exploring a structured
  directory
• Resource Definition Format (RDF) is a highly
  flexible way of indexing collections of resources

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EDI

• EDI protocol allows
• One way or simplex mode of data transmission
• Two way or duplex mode
• In most instances, transmission occurs in one
  direction or half duplex mode

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How the Internet Works

• Most basic protocol is TCP/IP
• Other protocols used on the Internet
• Point-to-point protocol (PPP)
• Serial Line Internet Protocol (SLIP)
• Post Office Protocol (POP)
• The development of these types of protocol has
  enabled more complex operations on the web

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How the Internet Works

• Development of the WWW
• Web allows the user to interchange between
  documents using hypertext
• This allows the Internet to establish a link to
  another document using a hotlink or hyperlink
• The protocol that enables these hotlinks is the
  Hypertext Transfer Protocol (HTTP)

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SGML

• In the 1980s the International Organization for
  Standardization release a standard generalized
  markup language (SGML)
• Defines documents in plain text using tags
  embedded in the text to specify the definition

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HTML HTTP

• HTML is a form of SGML with a specified
  document-type definition
• HTTP is a multimedia transport protocol
• It does not process the packages of data it
  transmits, it allows users to search for data
• It allows databases to interact and information
  to be manipulated

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The Web

• What defines the web and differentiates it from
  other networks
• HTTP
• The ability of servers to support it
• The transmission of data within these pages
  relies on the simplicity and speed of HTTP

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Other Protocols

• In addition to the TCP/IP and HTTP protocols the
  Internet uses
• FTP file transfer protocol
• SMTP simple mail transfer protocol
• MIME Multipurpose Internet Mail Extensions

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Architecture of the WWW

• The Web is based on three-part architecture.
• HTML describes the contents of web pages on the
  Internet
• HTTP allows servers and browsers to communicate
• A Common Gateway Interface CGI used by a web
  server to run a separate program that contains
  dynamic information, format it to HTML and send
  it on to the web server

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ISPs

• There are many levels involved on the Internet
• Individuals can connect directly and via an
  intranet to an ISP
• ISP is connected to an Internet access provider
• This is connected to a National Access Provider
• This is connected to a very-high-speed backbone
  (or spine) network service (VBNS)

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EMail

• Most popular Internet application
• Allows the transmission of messages and files
  over a computer network
• IMAP Interactive Mail Access Protocol
• Allows user to view subject and sender, as well
  as attachments before they download
• An email address consists of a user name and a
  domain name

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Information Systems and Internet Commerce

• The connection can be explained by the following
  definitions
• IS (information system) is the collection of
  technical and human resources that provide
  storage, computing, distribution and
  communication
• IS (information services) is a name for an
  organization within an enterprise that is
  responsible for its data processing and
  information system or systems

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Methodologies

• Managing the change to electronic business models
  requires many information technology
  methodologies to be invoked
• Rapid Application Development (RAD)
• Joint Application Development (JAD)

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eCommerce as a Management Tool

• Unfortunately many managers are not technically
  literate
• Organizations need to develop strategies that
  enable them to cope with rapid change and the
  accelerating nature of information flows
• Internal bureaucracies are the natural enemies of
  electronic commerce they may stifle competition

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Summary

• Electronic business is experiencing phenomenal
  growth since its appearance
• Arrival of the Internet and WWW have made
  business available globally which emphasizes the
  need for business to keep ahead