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    Electronic commerce (EC)The process of buying, selling, or exchangingproducts, services, or information via

    computer Other definitions from different perspectives

    Business Processdoing businesselectronically by implementing businessprocesses over electronic networks, therebysubstituting information for physical businessprocesses

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    Servicea tool that addresses the desire ofgovernments, firms, consumers, andmanagement to cut service costs whileimproving the quality of customer service

    LearningEC is an enabler of online trainingand education in schools, universities, and

    other organizations, including businesses CollaborativeEC is the framework for inter-

    and intra-organizational collaboration

    CommunityEC provides a gathering placefor community members to learn, transact,and collaborate. Popular community is socialnetworks, such as MySpace and Facebook

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    E-Business

    A broader definition of EC that includes notjust the buying and selling of goods and

    services, but also servicing customers,collaborating with business partners, andconducting electronic transactions within anorganization

    Some exclude buying and selling Some define e-business as dealing with firms

    internal activities only, whereas e-commerce

    deals with the external activities only We use the broadest definition of E-

    Commerce

    However, the two terms will be used

    interchangeably 4

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    OTHER EC CONCEPTS

    Pure Versus Partial EC

    EC can take several forms depending onthe degree of digitization ofthe product(service) sold, the process (e.g., ordering,

    payment, fulfillment), and the deliverymethod

    The possible configurations of these 3

    dimensions determine different levels of EC

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    A product may be physical or digital, theprocess may be physical or digital, and the

    delivery method may be physical or digital These alternatives create 8 cubes, each of

    which has 3 dimensions

    In traditional commerce, all 3 dimensionsof the cube are physical (lower-left cube)

    In pure EC, all dimensions are digital

    (upper-right cube)Other cubes include a mix of digital and

    physical dimensions

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    If there is at least 1 digital dimension, weconsider the situation EC, but only partial EC

    Ex. Purchasing a computer from Dells Website or a book from Amazon.com is partial EC,because of the physical delivery

    However, buying an e-book fromAmazon.com, or a software product fromBuy.com is pure EC, because the product,payment, and delivery are all digital

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    EC Organizations

    brick-and-mortar (old economy) organizations

    Old-economy organizations (corporations) that

    perform their primary business off-line, sellingphysical products by means of physical agents

    virtual (pure-play) organizations

    Organizations that conduct their businessactivities solely online

    click-and-mortar (click-and-brick) organizations

    Organizations that conduct some e-commerce

    activities, usually as an additional marketingchannel

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    electronic market (e-marketplace)

    An online marketplace where buyers andsellers meet to exchange goods, services,money, or information

    Any individual can also open a marketselling products or services online

    Electronic markets are connected to sellersand buyers via the Internet

    But, they may be supplemented byconnecting inter-organizational or intra-organizational information systems

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    Inter-organizational information systems(IOSs)

    Communications systems that allow

    routine transaction processing andinformation flow between two or moreorganizationsusing standard protocolssuch as EDI

    Intra-organizational information systems

    Communication systems that enable e-commerce activities to go on within

    individual organizationsalso known asintrabusiness EC

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    Internet - Vast majority of people use theglobally networked environment, theInternet

    Intranet - An internal corporate orgovernment network that uses Internettools, such as Web browsers, and Internet

    protocols Extranet - A network that uses the Internet

    to link multiple intranets in a secure manner

    Retail sales are on the increase continually12

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    AN EC FRAMEWORK

    The EC field is diverse, involves many activities,organizational units, and technologies

    A framework that describes its contents isuseful

    EC applications shown at the top

    To execute these applications, companiesneed the right information, infrastructure, andsupport services

    So, the EC applications are supported byinfrastructure, and the five support services

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    l ll b i di i i f

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    Peoplesellers, buyers, intermediaries, infosystems & technology, and any otherparticipants

    Public policycompliance with legal andother policy and regulations, such asprivacy protection and taxation, that aredecided by governments; also the issue oftechnical standards established bygovernment and/or industry-mandatedgroups

    Marketing and advertisementlike anyother business, EC requires the marketingsupport, to bridge the gap betweenbuyers and sellers

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    Support servicesmany supportservices such as content creation,

    order management & delivery,payments and so on are essential

    Business partnershipsassociations

    such as joint ventures, exchanges,and business partnerships of varioustypes are common in EC applications;these occur frequently throughout thesupply chain

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    The infrastructure for EC is shown at thebottom

    The infrastructure describes the hardware,software, and networks used in EC

    All these components require soundmanagement practices

    So, companies need to plan, organize,motivate, devise strategy, and restructureprocesses, as needed, to optimize business

    use of EC models and strategies

    Essentially management deals with thestrategic, tactical ,and operational

    decisions all alike 17

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    EC IS CLASSIFIED BY THE NATURE, DIRECTIONOF TRANSACTIONS, AND INTERACTIONS

    business-to-business (B2B) - E-commercemodel in which all of the participants arebusinesses or other organizations

    business-to-consumer (B2C) - E-commercemodel in which businesses sell to individualshoppers (also called e-tailing

    Online retailing)

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    i t b i C t

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    intra-business EC - E-commerce categorythat includes all internal organizationalactivities that involve the exchange of

    goods, services, or information amongvarious units and individuals in anorganization (usually performed over

    intranets or corporate portals business-to-employees (B2E)subset of

    the intra-business category in which an

    organization delivers services, information,or products to its individual employees(B2ME)

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    t (C2C)

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    consumer-to-consumer(C2C) -E-commerce model in which consumerssell directly to other consumers (selling

    residential property, cars in online classifiedads; use of auction sites to place items forsale)

    collaborative commerce (c-commerce)

    E-commerce model in which individuals orgroups communicate or collaborateonline, multi-located business partners

    designing a product together, using screensharing; managing inventory online)

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    e-learning

    The online delivery of information for

    purposes of training or education (e-training, virtual universities)

    e-government

    E-commerce model in which agovernment entity buys or provides goods,services, or information from or to

    businesses (G2B)or individual citizens (G2C)

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    First applications developed in the early 1970s

    for electronic fund transfer and the EDIs (fordocument transfers)

    These were first generation IOS applications

    EC coined during early 1990s, butapplications expanded from mid 1990s

    1999emphasis shifted from B2C to B2B

    2001from B2B to B2E, C-commerce, e-government, e-learning, and m-commerce

    2005social networks received attention asdid the wireless applications

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    EC Failuresstarting 1999 many e-tailing and

    B2B exchanges began to fail (seedisobey.com/ghostsites)

    B2C failureseToys, Xpeditor, MarchFirst,

    Drkoop, Webvan, and Boo B2B failuresChemdex, Ventro, and

    Verticalnet (see businessplanarchive.org)

    A survey by Strategic Direction (2005) foundthat 62% of the dot-coms lacked financialskills, 50% had little experience in marketing,many firms had poor inventory and logistics

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    D t th t EC d

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    Does not mean that ECs days arenumbered

    First, the dot-com failure rate is decliningsharply

    Second, the EC field is basicallyexperiencing consolidation as companiestest different business models andorganization structures

    Third, many pure EC companies such as

    Amazon.com are expanding operations

    Finally, click-and-mortar model works verywell in e-tailing (Wal-mart, eBay)

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    EC S l t f h i

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    EC Successeslast few years have seen riseof extremely successful EC companies such aseBay, Google, Yahoo!, AOL, E-Trade

    Click and mortar companies such as Cisco,Wal-Mart online, GE, IBM, Intel also have seengreat success

    Despite the failure of individual companiesand initiatives, the total volume of EC hasbeen growing by 15 to 25% every year

    Finally, ECs success is now being shapedlargely by social computing and networking

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