ELECTRONIC COMMERCE Session 6 15:00 - 15:30 Dr. Deepak B Phatak IIT Bombay
Dr. Phatak, IIT Bombay
Electronic Commerce 2
OVERVIEW
Dimensions Of E-Commerce Major Issues Underlying Technologies Notions Of Security SMARS Project at IIT
Dr. Phatak, IIT Bombay
Electronic Commerce 3
COMMERCE
Commerce– Activities Involved In Exchange of
Goods / Services On a Large Scale Business
– Carrying Out Commercial Activities Profitably
Dr. Phatak, IIT Bombay
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COMMERCE
Contracting Parties– Buyer And Seller
Intermediaries– Other Participants Facilitating
Commercial Transactions*Direct (Distributors, Retailers)
*Indirect (Banks, Regulators)
Dr. Phatak, IIT Bombay
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COMMERCE
Money Is A Valued Medium To Facilitate Transactions
Attributes Of Money– Wide acceptability
– Security, Anonymity
– Portability, Divisibility
– Durability, Interoperability
Dr. Phatak, IIT Bombay
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COMMERCIAL ACTIVITIES
Advertising, Marketing Contracting Business Deals
– Order Processing Payment Systems
– Instruments (Cheques, LoC) Supply Chain Management
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DIMENSIONS OF ELECTRONIC COMMERCE
E-Commerce– Use Of Electronic Networked
Information Systems To Carry Out Commercial Activities
– Started with EDI
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DIMENSIONS OF ELECTRONIC COMMERCE
Facilitated By Internet Technologies
Current Focus on World Wide Web (WWW)
Communication Channel Between Buyer And Seller
Dr. Phatak, IIT Bombay
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DIMENSIONS OF ELECTRONIC COMMERCE
Intra Business Business To Business Business To Individual Individual To Individual
Dr. Phatak, IIT Bombay
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ECOMMERCE FRAMEWORK
Policy,Legal,
PrivacyIssues
Technical Standards
ForDocuments
SecurityNetworkProtocols
ECOMMERCE APPLICATIONS
Common Business Services
Messaging & Info Distribution
Multimedia Content & Network Publishing Network
Dr. Phatak, IIT Bombay
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ECOMMERCE FRAMEWORK
Applications– Video On Demand
– Remote Banking
– Marketing, Advertisement
– Home Shopping
– Supply Chain Management
Dr. Phatak, IIT Bombay
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ECOMMERCE FRAMEWORK
Business Service Infrastructure– Security
– Authentication
– Electronic Payment
– Directories And Catalogues
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ECOMMERCE FRAMEWORK
Messaging & Information Distribution Infrastructure– EDI
– E Mail
– Hyper Text Transfer Protocol
– Secure Protocols
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ECOMMERCE FRAMEWORK
Content Infrastructure– HTML, CGI Scripts, Perl
– XML
– WWW, Java
– Site Hosting And Management
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ECOMMERCE FRAMEWORK
Network Infrastructure– Telecom
– Wireless (Microwave, VSAT)
– Cable TV
– Internet, Intranets
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ECOMMERCE FRAMEWORK
Standardisation– Proposal For OO Framework
– ECO System, CBL*Layer of Middle ware
*OO Development Environment
*Application “Agents”
Dr. Phatak, IIT Bombay
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Social vs.Technological acceptance
ECommerce Wave Is Just Beginning……...
0
20
40
60
80
100
120
TechnologyAdvances SocialAcceptance
Dr. Phatak, IIT Bombay
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Value chainValue chain
Direct Direct marketing, marketing, selling, and selling, and
servicesservices
Corporate Corporate purchasingpurchasing
Employee self-service purchasing Employee self-service purchasing from suppliersfrom suppliers
Online bill payment, investment Online bill payment, investment services, banking, and soft goodsservices, banking, and soft goods
CustomerCustomerserviceservice
DirectDirectsellingselling
Brand Brand developmentdevelopment
Financial and Financial and information information
servicesservices
Establish “direct” process linking Establish “direct” process linking with trading partnerswith trading partners
E-Commerce Scenarios
Dr. Phatak, IIT Bombay
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E-Commerce For Everyone
Value chainValue chain
Web sites that deliver Web sites that deliver resultsresults
Employee self-serviceEmployee self-service
Effective sites for small Effective sites for small businessbusiness
Better online shoppingBetter online shopping
Dr. Phatak, IIT Bombay
Electronic Commerce 20
SizeSize Online todayOnline today
50 50 million vehiclesmillion vehicles$700 billion car sales$700 billion car sales > 4%> 4%
4.2 4.2 million homes million homes $728 billion in loans$728 billion in loans < 1%< 1%
$189 $189 billion in billion in advertisingadvertising < 1%< 1%
Web Life Style:Still Early
200 200 million ticketsmillion tickets$180 billion on travel$180 billion on travel < 1%< 1%
AutomotiveAutomotive
TravelTravel
AdvertisingAdvertising
Real estateReal estateBankingBanking
2 Trillion2 Trillion < 1%< 1%RetailRetail
Dr. Phatak, IIT Bombay
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Consumer Orders for personal and household goods
Source: Inetco Research
1.5
4
6
13.3
0
2
4
6
8
10
12
14
1996 1997 1998 2001
•50% by Credit Card•Excludes Stock trades
($Billion)
Dr. Phatak, IIT Bombay
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U.S. Internet B2B revenues
Source: Forrester Research
327
183
105
41178
0
50
100
150
200
250
300
350
1997
1998
1999
2000
2001
2002
($Billion)
Dr. Phatak, IIT Bombay
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BUSINESS-TO-BUSINESS -
Extend Electronic Data Interchange (EDI) to the Internet– Apply EDI features to new application
environments
– Inter-operate with existing, new, and future information interchange systems
– Support new standards and associations
Dr. Phatak, IIT Bombay
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BUSINESS-TO-BUSINESS ------------------------------------
Conduct Transactions Cost-effectively– Scale Economies for Suppliers and
Buyers
– Integrate With Legacy Systems Full-featured Apps Enable More
Than Just Transactions
Dr. Phatak, IIT Bombay
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Trading Trading Partner Partner (EDI Gateway)(EDI Gateway)
Trading Trading Partner Partner (EDI Gateway)(EDI Gateway)
VANVAN
InternetInternet
Trading Trading Partner Partner (CIP)(CIP)
Trading Trading Partner Partner (Hosted CIP(Hosted CIP--Browser)--Browser)SignSign
EncryptEncrypt
MapMap
TransportTransportPost transport auditPost transport audit
InitializeInitialize
Pre transport auditPre transport audit
Verify signatureVerify signature
MapMap
DecryptDecrypt
App integrationApp integration
AuditAudit
InitializeInitialize
Receipt generateReceipt generate
Pre app auditPre app audit
Commerce InterchangeCommerce Interchange
Interoperation via XML:Commerce Interchange Pipeline
Platforms
Dr. Phatak, IIT Bombay
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Interoperation via XML:
Business to Business data interchange Transport and format independent XML/XSL for mapping
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Create cost-effective Create cost-effective commerce sites and commerce sites and
applications, with targeted applications, with targeted online advertising and online advertising and
marketing, and personalizedmarketing, and personalizedpromotionspromotions
Conduct business online Conduct business online with secure and scaleable with secure and scaleable
order processing and order processing and integration with existing integration with existing
systems.systems.
Understand customer and partner Understand customer and partner purchases and usage to improve online purchases and usage to improve online
businessbusiness
E Commerce Requirements
AnalyzeAnalyze
TransactTransactEngageEngage
AnalyzeAnalyze
EngageEngage TransactTransact
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MAJOR ISSUES
Business Transaction– Authentication
– Secure Transmission
– Non Repudiation
– Automatic Response (At least At One End)
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UNDERLYING TECHNOLOGIES
Work Stations, Servers– Multimedia PC, Application, Web,
OLTP, IVR, Data Warehouse Internet
– Secure Protocols (SSL), XML, JAVA Intranets
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REGULATORY ISSUES
Internet Regulations– Practically None
Banking Regulations– Overwhelming
– Compliance Monitoring
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SMART CARDS AT IIT
SMArt Rupee System Launched In December 1998 ~1000 Cards, 25 Merchants ~Rs. 1.5 Crore Outlay Interface Standards For India
Dr. Phatak, IIT Bombay
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SMART CARDS AT IIT
Loading Station To Card Card To PoS Terminal Terminal To Host Host To Settlement System