Internet & Digital Economy n What is Internet? n What is Electronic Commerce? n A Framework for EC n Benefits of EC n Categories of EC Applications n.

Internet & Digital EconomyInternet & Digital EconomyInternet & Digital EconomyInternet & Digital Economy

What is Internet?What is Internet? What is Electronic Commerce?What is Electronic Commerce? A Framework for ECA Framework for EC Benefits of ECBenefits of EC Categories of EC ApplicationsCategories of EC Applications Internet Shopping MallsInternet Shopping Malls Electronic Payment SystemsElectronic Payment Systems Agent TechnologyAgent Technology

What is Internet?What is Internet?

ARPANET created in 1969 by DODARPANET created in 1969 by DOD Evolved into a worldwide network linking Evolved into a worldwide network linking

educational, research, business and educational, research, business and governmental organizationsgovernmental organizations

Based on TCP/IP communications protocol Based on TCP/IP communications protocol Open network architectureOpen network architecture

Services Available on InternetServices Available on Internet

electronic mailelectronic mail– allows for exchange of personal messages between individualsallows for exchange of personal messages between individuals

FTP (File Transfer Protocol)FTP (File Transfer Protocol)– uploads/downloads files uploads/downloads files

telnettelnet– permits log-ins to access resources in remote locationspermits log-ins to access resources in remote locations

usenet (usenet (useuser’s r’s netnetwork)work)– designed to let user groups exchange information of their interestdesigned to let user groups exchange information of their interest

WWW (Worldwide Web)WWW (Worldwide Web)– uses a graphically-oriented user interface to share multi-media info.uses a graphically-oriented user interface to share multi-media info.

Company Uses of the Web for Electronic Commerce Company Uses of the Web for Electronic Commerce

1.Market place awareness http:/www.fritolay.com/; http:/www.gatorade.com/ 2.Customer Support http://www.developer.ibm.com/ ; http://netwire.novell.com/servsup/ 3.Sales 1) Indirect http://www.jcpenney.com/; http://www.ultranet.com/~adamo/CA_Gold/products.htm 2) Direct http://www.800flowers.com/shop/index.html; http://www.midcoast.com/cybermall/indexcm.htm 3) Virtual Companies http://www.condom.com/; http://www.nwpros.com/Mall/mall.html 4.Advertising http://www.publicita.com/homepage.html; http://www.ultimate.org/; http://www.wp.com/CYBERPAGE/ 5.Electronic Information Services 1) Subscription-Based http://www.espnnet.com/; http://www.mids.com/ 2) Non Subscription-Based http://www.disneychannel.com/ 3) Local/Regional Broadcast Stations (TV/Radio) http://www.kzps.com/kzps; http://www.kxas.com/

Electronic CommerceElectronic Commerce

EC is defined as the buying and selling of EC is defined as the buying and selling of products, services, and information via products, services, and information via computer networks, including the Internet.computer networks, including the Internet.

Evolution of ECEvolution of EC– EFTEFT– EDI or e-mail (VAN-based)EDI or e-mail (VAN-based)– InternetInternet

Categories of EC transactions: Categories of EC transactions: – business-to-businessbusiness-to-business– business-to-consumerbusiness-to-consumer

A Framework for ECA Framework for EC

EC Applications

People PublicPolicy

PublicPolicy

Organi-zations

Infra:(1) Common Business Services Infra. (security smart cards, electronic payment)(2) Messaging and Info. Distribution Infra. (EDI, e-mail, Hypertext)(3) Multimedia Content and Network Publishing Infra. (HTML, JAVA, WWW, VRML)(4) Network Infra. (Telecom, CATV, wireless, Internet)(5) Interfacing Infra. (to DB, customers, applications)

Benefits of ECBenefits of EC

Benefits to OrganizationsBenefits to Organizations– EC decreases the cost of creating, processing, distributing, storing, and EC decreases the cost of creating, processing, distributing, storing, and

retrieving paper-based info, as well as telelcom costretrieving paper-based info, as well as telelcom cost– EC allows reduced inventories and overhead by facilitating SCMEC allows reduced inventories and overhead by facilitating SCM– EC allows small businesses to compete against larger onesEC allows small businesses to compete against larger ones

Benefits to ConsumersBenefits to Consumers– EC provides consumers with more choices (more vendors/products)EC provides consumers with more choices (more vendors/products)– EC keeps the costs of products and services downEC keeps the costs of products and services down– EC provides the opportunity to shop 365 days a year, 24 hours a dayEC provides the opportunity to shop 365 days a year, 24 hours a day

Benefits to Society/EconomyBenefits to Society/Economy– EC decreases the need to travel for business transactionsEC decreases the need to travel for business transactions– EC lowers the prices of merchandise, allowing poor people to buy more and EC lowers the prices of merchandise, allowing poor people to buy more and

improve their quality of livingimprove their quality of living

B-to-B EC ApplicationsB-to-B EC Applications

EDI(Electronic Data Interchange): EDI(Electronic Data Interchange): – defined as the electronic movement of specially formatted standard business defined as the electronic movement of specially formatted standard business

documents, such as orders, bills, and confirmations sent between businessesdocuments, such as orders, bills, and confirmations sent between businesses– document formatting standards: X12, EDIFACT, etc.document formatting standards: X12, EDIFACT, etc.– widely used by retailers, manufacturers, insurance companies, and other widely used by retailers, manufacturers, insurance companies, and other

paperwork-intensive organizationspaperwork-intensive organizations– can significantly lower paperwork-related cost and speed up transactionscan significantly lower paperwork-related cost and speed up transactions

There has been a shift from VAN-based EDI There has been a shift from VAN-based EDI to Internet-based EDIto Internet-based EDI

e.g., KTNET(Korea Trade Network)e.g., KTNET(Korea Trade Network)

B-to-C EC ApplicationsB-to-C EC Applications Advertising and Online PublishingAdvertising and Online Publishing

– websites of most large corporationswebsites of most large corporations

Cyberbanking, Personal Finance, and Stock TradingCyberbanking, Personal Finance, and Stock Trading– online decision support toolsonline decision support tools

Travel and Real EstateTravel and Real Estate– digital photosdigital photos

Retailers & Internet Shopping MallsRetailers & Internet Shopping Malls– electronic catalogselectronic catalogs

AuctionsAuctions– can invite and collect many bids over the Internetcan invite and collect many bids over the Internet

Cyber Auction Site (ebay.com)

Seller

구매자 ABuyer A

구매자 BBuyer B

구매자 CBuyer A

‚ Bid submission

„ Bid close

d

…Remittance

† Delivery

„Notification

of thesuccessful

bidder

Selection of thesuccessful bidder

ItemRegistra-tion

ƒ

‚ Bid submissi

on

‚ Bid submiss

ion

How Electronic Auction Works

Categories of Internet Shopping MallsCategories of Internet Shopping Malls

Indirect Direct

Multiple

Single

ProductCategories

Selling Method

Direct Sale, Multiple ProductsDirect Sale, Multiple Products

Indirect Sale, Multiple ProductsIndirect Sale, Multiple Products

Direct Sale, Single ProductDirect Sale, Single Product

Indirect Sale, Single ProductIndirect Sale, Single Product

Electronic Payment SystemsElectronic Payment Systems

Smart CardsSmart Cards– The value is stored on a card; can be either online or offlineThe value is stored on a card; can be either online or offline

Credit CardsCredit Cards– S.E.T. standard developed jointly by Visa & MasterCardS.E.T. standard developed jointly by Visa & MasterCard

Electronic CashElectronic Cash– Money is drawn at the time of a transactionMoney is drawn at the time of a transaction

Electronic ChecksElectronic Checks– Money is drawn some time after the time of a transactionMoney is drawn some time after the time of a transaction

Intelligent AgentsIntelligent Agents

A technology designed to alleviate the information overflow A technology designed to alleviate the information overflow problem and facilitate ECproblem and facilitate EC

special software that travel from site to site, performing tasks special software that travel from site to site, performing tasks useful for the useruseful for the user

Functions of intelligent agents:Functions of intelligent agents:– information access and navigationinformation access and navigation– decision support and empowermentdecision support and empowerment– repetitive office activityrepetitive office activity– routine personal activityroutine personal activity– search and retrievalsearch and retrieval– domain expertsdomain experts

mySimon.com: an Agent to Aid in Shopping