Architectural Framework for Electronic Commerce

1) Application services 2) Brokerage and Data services, Data or transaction management 3) Interface and Support Layers 4) Secure Messaging, Security, and Electronic Document Interchange 5) Middleware and Structured document interchange 6) Network infrastructure and basic communications services

6) Network Infrastructure
E-commerce framework is being built on the WWW architecture. Wireline - coaxial, fiber optic Wireless

5) Middleware Services
needed to solve all the interface, translation, transformation, and interpretation problems the ultimate mediator between diverse software programs that enables them talk to one another As computing is shifting from application centric to data centric, middleware services should focus on:
transparency transaction security and management - authentication and authorization distributed object management and services. Objects are defined as the combination of data and instructions acting on the data.

4) Secure Messaging, Security, and Electronic Document Interchange

Messaging can be defined as:
the software that sits between the network infrastructure and the clients or e-commerce applications. a framework for the total implementation of portable applications

They offer solutions for communicating nonformatted (unstructured) data, letters, memos, reports, as well as formatted (structured) data such as invoices, PO. With messaging tools, people can communicate and work together more effectively, no matter where they are located.
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3) Interface and Support Services

Interfaces for e-commerce applications such as interactive catalogs, the customized interface to consumer applications such as home shopping. Support directory services, functions necessary for information search and access, which operate behind the scenes and attempt to organize the enormous amount of information and transactions generated to facilitate e-commerce. The difference - interactive catalogs deal with people, directory support services interact directly with software application.

2) Information Brokerage and Management

It provides service integration through the notion of information brokerage, the development of which is necessitated by the increasing information resource fragmentation. Information brokerage is intermediary who provides service integration between customers and information providers, given some constraint such as a low price, fast service, or profit maximization for a client It also addresses the issue of adding value to the information that is retrieved. E.g. FX company provides not only the latest currency exchange rate, but also hedging and risk management etc.

(1) E-Commerce Application services:

Distinct Categories of e-Commerce
Business to Consumer (B2C) Business to business (B2B) Consumer to Consumer (C2C) Consumer to Business (C2B) Intraorganizational e-commerce

Four Categories of e-Commerce

Business originating from . . . Business Consumers

Business And selling to . . . Consumers

B2B B2B

C2B C2B

B2C B2C

C2C C2C

Convergence of e-Commerce Categories

Business originating from . . . Business Publishers order paper Publishers order paper supplies from paper supplies from paper companies companies Amazon orders from Amazon orders from publishers publishers Consumers buy Consumers buy thousands of Harry thousands of Harry Potter books from Potter books from Amazon Amazon Consumers

Business And selling to . . . Consumers

Consumers aggregate Consumers aggregate to bulk purchase from to bulk purchase from Amazon Amazon

Consumers resell Consumers resell copies on eBay copies on eBay

Global Supplier Classic EDI

Procurement, distribution and logistics

Engineering and research

Manufacturing and production

Private Commerce Internal publishing

Accounting, finance and management

Advertising

Sales Consumer-oriented e-commerce

Customer service

Different types of

Customers

e-commerce applications

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Business-to-consumer (b2c) Transactions

It refers to exchanges between business and consumers, like the ones managed by Amazon.com, Yahoo
We call this category marketplace transaction.

The activities tracked are consumer search, frequently asked questions and service and support.
Customers learn about products differently through electronic publishing Buy them differently using electronic cash and secure payment systems have them delivered differently loyalty may also be different

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Consumer-Oriented (b2c) E-Commerce

Consumer-oriented application can be broadly classified into entertainment, such as movies on demand, multiuser games, on-line discussions financial services, such as home banking, financial services, financial news information, such as on-line databases essential services, such as home shopping, electronic catalogs, telemedicine education and training, such as interactive education, multiuser games, video conferencing, on-line databases
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Operational rule of consumer-oriented ecommerce is simple:

whenever the physical transfer of information is replaced with digital transmission, a winner might emerge if the cost is comparable or less use is more convenient or faster the ability to underwrite technology investments, along with a vision to understand the demands of these new media

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Mercantile Process Models from the Consumers Perspective

Product/service search and discovery in the information space Comparison shopping and product selection based on various attributes Prepurchase preparation

Negotiation of terms, e.g., price, delivery times

Placement of order Authorization of payment Receipt of product

Purchase consummation

Customer service and support (if not satisfied in X days, return product)

Postpurchase interaction

Steps taken by customers in product/service purchasing

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A successful on-line shopping environments should address these questions:

How much time are buyers allocating and spending on their purchasing decisions with respect to various products? What factors account for the differences in consumer decision time? What technology can be used or designed to reduce decision time? What is the right shopping environment that keeps customers happy and wanting to return?

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Mercantile Process Models from the Merchants Perspective

Customer inquiry and order planning generation Cost estimation and pricing of product services Presales interaction

Order receipt and entry Order selection and prioritization Order scheduling Order fulfillment and delivery

Product/service production and delivery

Order billing and account/payment management

Customer service and support

Postsales interaction

Order management cycle in e-commerce

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Business-to-business (b2b) Transactions

We call this category market-link transaction. Also known as Interorganization e-commerce. It refers to the full spectrum of e-commerce that can occur between two organizations. This includes purchasing and procurement, supplier management, inventory management, channel management, sales activities, payment management &service and support. Businesses, governments, and other organizations depend on computer-to-computer communication as a fast, economical, and a dependable way to conduct business transactions. B-to-B transactions include the use of EDI and electronic mail for purchasing goods and services, buying information and consulting services, submitting requests for proposals, and receiving proposals.

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b2b and EDI

EDI developed in 1960s as a means of accelerating the movement of documents pertaining to shipments and transportation. In mid-1980s, the technique was used in may industries - automotive, retail, international trade etc. It is still growing now and is set to become the standard by which organizations will communicate formally with each other in e-commerce Might be replaced by XML in the future

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Some Definition of Electronic Data Interchange (EDI)

the transmission, in a standard syntax, of unambiguous information of business or strategic significance between computers of independent organizations. the interchange of standard formatted data between computer application systems of trading partners with minimal manual intervention. the electronic transfer, from computer to computer, of commercial and administrative data using an agreed standard to structure an EDI message. the electronic transfer from one computer to another of computer processable data using an agreed standard to structure the data.
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EDI in Action
EDI takes what has been a manually prepared form or a form from a business application, translates that data into a standard electronic format, and transmit it. At the receiving end, the standard format is untranslated into a format that can be read by the recipients application. Hence, output from one application becomes input to another through the computer-to-computer exchange of information. Result is elimination of delays and errors inherent in paper-based transaction.

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Buyer
Purchase request initiated in the organization Finance department

Seller
Finance department
Bill Payment

Purchasing department
Order

Paper-based mailroom

Paper-based mailroom
Order

Sales department

delivery

confirmation

Inventory and warehousing

Receiving department
Product delivery

Shipping department

Manufacturing department

Information flow without EDI

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Buyer
Purchase request initiated in the organization Finance department
Payment Billing

Seller
Finance department

Purchase-orderdetails
delivery

Purchasing department

EDI-capable computer
confirmation

EDI-capable computer

Sales department

Automated- Order

Inventory and warehousing

Receiving department
Product delivery

Shipping department

Manufacturing department

Information flow with EDI

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Tangible Benefits of EDI

EDI can be a cost- and time-saving system because:
automatic transfer of information from computer to computer reduce errors EDI produce acknowledgement of receipt of data - invoice is not necessary, and thus save efforts and reduce cost

for companies dealing with thousands of suppliers and tens of thousands of purchase order a year, the saving from EDI are significant. e.g. RJR Nabisco cut the processing of purchase order from about $100 to 93 cents saving accrue from the following improvements:
reduced paper-based systems improved problem resolution and customer service expanded customer/supplier base
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Inter-organisational electronic commerce (b2b)

Supplier management
Electronic applications enhance business partnerships by reducing purchase order (PO) processing costs and cycle times, and by increasing the number of POs processed with fewer people.

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Inter-organisational electronic commerce (b2b)

Inventory management
Electronic applications helps to reduce inventory levels, improve inventory turns, and eliminate out-of-stock problems. EC can shorten the order-shop-bill cycle and can also track their documents to ensure that they were received.

Distribution management
Electronic applications facilitates the transmission of shipping documents such as bills of lading, purchase orders, advanced ship notices, and claims and enable better resource management by ensuring the documents themselves contain more accurate data.
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Inter-organisational electronic commerce (b2b)

Channel management
Electronic applications can quickly disseminate information about changing operational conditions to trading partners. Technical, product, and pricing information that once required repeated telephone calls and countless labor hours can now be posted to electronic bulletin board.

Payment management
Electronic applications link companies with suppliers and distributors so that payments can be sent and received electronically. Electronic payment reduces human error, increases the speed at which companies compute invoices, and lower transaction costs.

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Consumer to Consumer (C2C)

exchanges involve transactions between and among consumers. These can include third party involvement, as in the case of the auction website Ebay. Examples: other examples?

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Consumer-to-Business (c2b)
c2b is when consumers band together to present themselves as a buyer in group. Example: www.speakout.com

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Intraorganizational Transactions
We call this category market-driven transactions A company becomes market driven by
dispersing throughout the firm information about its customers and competitors spreading strategic and tactical decision making so that all units can participate continuously monitoring their customer commitment by making improved customer satisfaction an ongoing objective

Three major components of market-driven transactions are:

customer orientation through product and service customization cross-functional coordination through enterprise integration advertising, marketing, and customer service
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Intra-organisational electronic commerce

Workgroup communications
These applications enable managers to communicate with employees using e-mail, videoconferencing, and bulletin boards. The purpose is to improve the internal communication effectiveness especially for international companies.

Electronic publishing
Electronic publishing applications enable companies to organize publication, and disseminate human resources manuals, product specifications, meeting minutes and company announcements. The benefits are clear: reduction of printing cost and speed up internal communication. 30

Intra-organisational electronic commerce

Sales Force productivity
These applications improve the information flow between the production and sales forces. Internal parties can get the most updated market intelligence information which can be used to formulate the most effective company strategy.

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Internal Information Systems

better utilization of corporate information in operational and analytical decision is important corporate data provide the building blocks to form the information and knowledge that underlie the operations of all enterprises corporate information is created, managed, and stored in many forms and places, and its value is contingent on the ability of workers to access, manipulate, change and distribute it

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