CMPE 484 - Fundamentals of Electronic Commerce

CMPE 484 - Fundamentals of Electronic Commerce

Spring 2001

Dr. Ayşe Başar Bener

About the Course

• Technical majors

• Team projects- teams will be assigned

• Weekly assignments

• Guest lecturers

• Web site for course: www.cmpe.boun.edu.tr/cmpe484.html

• The course is run in collaboration with GWU (course code Csi 701)

Project Requirements

• Design and Implement an E-business• Business Plan• Complete architecture: design & implement• Each team

– install a webserver– Java servlet module– MSQL DBMS– ** for technical lecture, need extra time slot**

Sooner or later the internet will become an indispensable part of our lives - resistance is futile. It is here to stay!

Essential to E-business

E-Business

Communication

Collaboration

Commerce

What is Communication

• Communication: The building block of a revenue generating e-business activity. It involves the setting up of web-sites on the internet

What is Collaboration

• Collaboration:

Is a critical requirement for e-business. Currently, EDI is being used to meet requirements, but clearly, the future belongs to XML or extensible markup language. Emerging needs such as open buying on the internet and open tracking protocol can be embedded in XML

What is Commerce

• Commerce involves a whole gamut of issues including – Legal rights of respective trading

partners, (more so, if they are from different countries)

– Exchange of business transactions: between the supplier/s, enterprise and the customer/s

What is Commerce

– Marketing of products and services:

The actual marketing/selling on internet took a long time to find acceptance as customers were cagey about the security of financial transactions on the internet

Electronic Commerce - Definitions

• Modern business methodology that addresses the needs of organizations, merchants, and consumers to– cut costs – improve quality of goods and services– increase speed of service delivery– increase market share

• modern gold rush

Electronic Commerce - Definitions

• Communications– delivery of information, goods/services via

phone, computer or other e-means

• Business– application of technology to automation of

business transactions

More Definitions

• Service– tool for firms wanted to cut service costs and

improve quality of goods and speed of delivery

• On-line– capability of buying an selling on-line– converts digital inputs to value-added outputs

through set of intermediaries

• Not electronic cash

Electronic Commerce - Definitions

• Use of computer networks to search and retrieve information in support of human and corporate decision making

• E-commerce is associated with the buying and selling of information, products and services via computer networks

• Commercialization of the Internet– cheap to get going

– easy to reach millions

Electronic Transactions• Any transaction is an exchange• Series of steps that must run to completion so

that an exchange can be recorded• Not new

– ATM (Automated Teller Machine)

• Value exchange transactions– not just digital money– new ways of working

Building Blocks

• Common business services for facilitating buying and selling

• Messaging and information distribution

• Multimedia content and network publishing

• Information Superhighway– Any successful e-commerce requires the E-6

the way regular commerce requires the one-way interstate roads

Pillars of E-commerce• Public policy

– universal access– privacy– information pricing

• Technical standards– nature of information publishing– user interfaces– transport and compatibility across the network

Model for commercial transaction

• establishing trust– customer enters store – customer makes prior choices– merchant and customer trust each other

• negotiating a deal

• payment and settlement– consummation of online transaction

Online commerce integrators

• hardware

• software

• network connections

• labor and programming involved for digital storefront

• payment and settlement systems

• linking online transaction to existing organizational systems

Online commerce vs Electronic Payment System

• online commerce is all encompassing

• connected in that people have to pay for stuff

Currency• Function

– medium of exchange– store of value

• Began in primitive barter

• Intermediate good – trade a for b– trade b for c– b becomes intermediary

• medium of exchange

Currency

• gold was generally medium of exchange– heavy– paper replaced coins but paper was redeemable

for gold

• silver certificates

• now trust– three centuries of banking systems

Banking Systems

• Government today has the exclusive right to print money

• Today centralized banking

Internet advantage

• open system

• no ownership

• world wide web capability

MYTH

Electronic commerce is about a new way of doing business...

…that will forever change today’s business

Agrarian Economy

Electronic EconomyYear 2000+

Industrial Economy

Evolution of the Web

The impact of this New Electronic Economy is just emerging

Cro-Magnon

toE-Magnon

It’s all about a new business model...

… with unique characteristics

… that changes how companies must think about web enabling their business

• Customer Choice

• Product Breadth and Convergence

• Economic models based on high volume, low margins and high service

• Recognizing new strategies for winning

• Preparing for the onset of buyer value networks

• Transforming to an electronic economy competitor

“It’s not about new products. It’s about a new business model where the greatest risk is irrelevancy”

E-commerce• E-commerce is buying and selling of

products, services, and information via computer networks including the Internet

• Companies who do business on the net and/ or who carry their businesses to the net– business-to-business: B2B– business-to-consumer: B2C– consumer to consumer: C2C– consumer to business: C2B

• Companies that provide infrastructure to enable others to do business on the net.