E-Commerce

Introduction

If you suddenly want to own a copy of your favorite novel, you no longer need to plan a trip to the nearest bookstore and be disappointed if one is not available. You also don't have to make multiple trips to see if the store was able to obtain one for you. Simply turn on your computer, connect to the Internet, and go to one of the numerous online bookstores such as Amazon.com, SimplyBooks.in, uRead.com, eBay India, or Flipkart.com. You can choose the books you want and have them delivered to your door without leaving your house. That is how simple electronic commerce, also known as e-commerce, has made shopping for you today. It is not only books that can be purchased in this manner. Today, everything from books, toys, clothing, and electronic appliances to cakes, flowers, and gifts is purchased, sold, rented, exchanged, or traded online.

The term e-commerce refers to the combination of tools based on information and communication technologies (commonly referred to as business software) used in organizations to improve their performance. This adds value to the organization, its customers, and its affiliates. E-commerce extends far beyond online purchases and sales and delves into the procedures and history of a business venture.

E-commerce is a powerful business setting formed when critical business systems are directly connected with consumers, workforce, traders, and business associates via intranet, extranet, e-commerce technologies, two-way applications, and the Web. It is more than just a smart Web presence or a flashy shopping cart. This is an important emergence of business around the world, with a number of technologies entering the enterprise computing ecosystem. E-commerce provides a powerful mechanism for businesses to increase productivity while decreasing costs. However, in order to reap these substantial benefits, businesses must ensure that their e-commerce is properly implemented and aligned with their market segment. There are three types of e-commerce applications:

• Internal business systems
• Enterprise communication and collaboration
• Electronic commerce.

Today, e-commerce is a byword in the society and it has become an essential part of our daily life.

Definition of E-Commerce

E-commerce is a cutting-edge technology that combines commerce and electronic media, specifically the computer. It is first necessary to define the term "business," which refers to the exchange of goods, items, or commodities for money, as well as services or applications.

The following is a popular definition of business:

• Business is the large-scale exchange or buying and selling of entities (goods or commodities) involving transportation from one location to another.

• Computers and Internet applications are required in e-commerce to manage and organize products and services. E-commerce or electronic business is the concept of using the Internet to connect with customers, business partners, and distributors for business purposes, as in the case of e-mail.

E-commerce and e-business are frequently used interchangeably.

• E-commerce is the buying and selling of information, goods, and services over a computer network.
• E-commerce is defined as any business activity that involves the use of an electronic medium. It also refers to the purchase or sale of goods and services without physically visiting a store.

E-commerce entails activities such as the electronic delivery of information, products, and services, as well as payment.

Origin of E-Commerce

E-commerce is the practice of conducting business online using electronic devices such as personal computers, phone lines, fax machines, pagers, and so on. Organizations used computers in the 1950s to process and store records of internal transactions. However, information between businesses was still exchanged on paper in the form of purchase orders, invoices, cheques, remittance devices, and other standard forms used to document transactions.

IBM was the first company to use the term "e-commerce" on a global scale. With the invention of personal computers in 1993, the first successful transaction was executed between the United States and the European Union.

Businesses that handled large volumes of transactions began exchanging transaction information on punched cards or magnetic tapes by the 1960s. Trading partners were eventually able to transfer data over telephone lines rather than shipping punched cards or magnetic tapes to each other in advance, thanks to advances in data communications technology.

Although these agreements between trading partners improved efficiency and reduced errors, they were not an ideal solution. Only large trading partners could afford to reap the benefits of these paperless exchanges, because translation programmes written by one trading partner would not work for other trading partners.

In 1968, several freight and shipping companies joined forces to form the Transportation Data Coordinating Committee (TDCC), which was tasked with identifying ways to reduce the load on shippers and carriers. The shipper could send the computer file electronically to any freight company that used the TDCC format. As a result, they avoided printing and handling forms, as well as entering data twice and worrying about error-correction procedures.

The introduction of Electronic Data Interchange (EDI) between banks over a secure private network in the 1970s transformed the financial market. The ANSI (American National Standards Institute) committee created a uniform EDI standard in 1973. This committee and its subcommittees included information technology experts from over 800 organisations. During the late 1970s and early 1980s, e-commerce became common within businesses through electronic messaging technologies such as EDI and e mail.

E-commerce, which combines a variety of processes such as EDI, electronic mail (e-mail), WWW, and Internet applications, provides a means to exchange information between individuals, businesses, and customers, and, most importantly, between computers. The Internet and the World Wide Web remain the primary e-commerce media.

E-commerce is the paperless exchange of information in a business using technologies such as EDI, electronic bulletin boards, e-mail, and others. E commerce aids in the automation of processes and transactions that were previously done on paper. It assists businesses in changing their operations to become completely e-environment friendly.

In recent years, electronic commerce has grown in popularity.

History of the Internet

1969: The US Department of Defense started the first network among major research centers in the US.

1971: Major connections or nodes were established. E-mail was introduced.

1973: Defense Department started developing various forms of file transfer.

1984: Domain Name Service (DNS) was introduced.

1986: The US National Service Foundation created Internet-based telephone lines.

1987: The number of hosts (computers on the Internet) reached 10,000.

1988: The number of hosts on the Internet crossed over 60,000.

1989: Over 100,000 hosts on the Internet were registered.

1991: The World Wide Web (WWW) was created by CERN in Switzerland.

(Conseil European pour la Recherché Nuclearire)

1992: One million hosts were found on the Internet.

1995: There were a total of 6.6 million hosts or computers on the Internet.

July 1997: 1.3 million domain names were registered.

Dec. 1997: 22 million servers, 40 million users on the WWW.

2000: 110 million users and 72 million domain names.

2003: 802.2 million users and 233 hosts.

Opportunities for Businesses in E-Commerce

Many businesses require e-commerce software services to take advantage of e-commerce opportunities.

Tourism and Travel Sector: This industry has upgraded its system to include e-commerce services. Customers can book hotels, motels, plane tickets, and train tickets online.

Banking Sector: Most banks have altered their business practises by making their services available online via their respective websites.

Health Care Sector: This is a large sector that consumes a significant portion of government funds. As a result, most health-care organisations communicate or exchange services with one another.

Stock Exchange Sector: In the stock exchange sector, e-commerce services offer demat account facilities to customers so that they can conduct an overall analysis of the status of the stock areas and conduct their respective transactions.

Financial Sector: Around the world, the financial sector has adopted e-commerce services, and users make extensive use of them.

E-Commerce vs. Traditional Business Mechanism

Basis: Data Error Reduction

E-Commerce

It does not involve multipoint data. With e-commerce, data is transferred directly from one computer to another without the involvement of a human.

Traditional

The buyer and seller generate purchase orders on their respective systems, which they then print or email to the receiver. The receiver then enters the same information into the computer for the second time. This results in the error.

Basis: Cost reduction

E-Commerce

When compared to the paper process, the initial cost of e-commerce is very high. However, it is extremely effective over time.

Traditional

Because time is money, saving money is inextricably linked to saving time. At every level, the same work is repeated. As a result, it takes a long time, and if there is an error, money may be lost.

Basis: Paperwork reduction

E-Commerce

E-commerce data in electronic form is simple to share throughout the organisation.

Traditional

It necessitates re-entry of data at each level, as well as a significant amount of time. As a result, valuable time is wasted in re-entering and printing reports.

Basis: Process cycle time reduction

E-Commerce

As data is entered into the system, e-commerce reduces the processing cycle time of complete cycles. It is a simulation procedure.

Traditional

When a buyer orders on paper in the traditional system, the data is re-entered into the seller's computer and only then is processing performed. This takes time and requires complete dedication.

 

The Advantage of E-Commerce

1. Customers can use the marketplace at any time through the use of e-commerce services.
2. Customers are completely satisfied and receive better service.
3. Customers can contact suppliers directly, bypassing all intermediaries.
4. Data on consumer performance; Using e-commerce services, one can understand consumer behavior, such as preferred websites, products, payment schemes, and modes of payment.
5. Customers can save time because they can buy anything through the merchant websites.

Other Advantages

1. E-commerce lowers the price of the product.
2. It reduces paperwork because all work is completed electronically.
3. Because all orders and inquiries are processed online, the product is delivered directly to the customer. This eliminates the need for wholesalers and retailers, lowering costs.
4. Improved customer relationships are achieved through the rapid dissemination of information.
5. E-commerce reduces the amount of time it takes from order to delivery.
6. Better, faster, and more effective client communication.
7. As the organisation receives customer feedback, it improves its product and conducts a market analysis.
8. E-commerce aids in the development of knowledge markets. Small groups within large corporations can be seeded with funds to develop new ideas.
9. E-commerce facilitates collaboration.
10. E-commerce is a 24 x 7 operation and has a global reach.

Disadvantage of E-Commerce

Rapid technological advancements have made global transactions possible in record time. This has transformed the traditional marketplace into an electronic marketplace, also known as an e-marketplace. However, benefits are only one aspect of e-commerce. There are also drawbacks to doing business online. Some of the most notable are:

1. Lack of customer awareness: People who are unfamiliar with electronic communication technologies such as the Internet and computers find it difficult to transact electronically.
2. Not for small businesses; Small business owners do not want to add to their workload because they are unfamiliar with e-commerce functions.
3. Does not support all types of businesses: E-commerce services are not appropriate for all types of businesses.
4. Legal formalities: Before implementing e-commerce services in the business, certain legal formalities such as authorization and authentication must be completed.

Other Disadvantages

1. High risk for an Internet startup company
2. Issues with security
3. Customer service issues
4. Data integrity issues
5. Problems with customer satisfaction

 

Main Goals of E-Commerce

It is widely acknowledged today that new technologies, particularly Internet access, tend to alter communication between various players in the professional world, most notably:

1. Relationships between businesses and organisations and their customers
2. Relationships between companies and their employees, or internal operations
3. Relationships between businesses
4. Supplier-companies relationship

Thus, the term "e-commerce" refers to the incorporation within a company of tools based on information and communication technologies (generally referred to as business software) to improve their functionality in order to create value for not only the business, organisation, or enterprise, but also its clients and partners.

E-commerce no longer applies only to virtual companies (also known as click and mortar) whose activities are entirely based on the Internet, but also to traditional businesses (called brick and mortar).

In fact, the term e-commerce, which is frequently confused with the term e-business, only covers one aspect of e-commerce, namely the use of an electronic support for a company's commercial relationship with individuals.

All e-commerce projects seek to add value. This value can be created in a variety of ways.

Increase margins by lowering production costs or increasing profits. E-commerce allows you to accomplish this in a variety of ways:

• Concentrating on new markets
• New market positioning
• Improving the quality of goods or services
• Pursuing new clients
• Increasing customer satisfaction
• Increasing the effectiveness of internal operations

By increasing employee motivation: The transition from a traditional activity to an e-commerce activity ideally allows associates to be motivated in such a way that:

• Making the overall strategy more visible to employees and encouraging a shared culture
• By encouraging players to take on more responsibility
• By emphasizing teamwork and developing competencies

Increasing customer satisfaction: Customer satisfaction benefits from e-commerce in the following ways:

• Price cuts combined with increased productivity
• Client handling has been improved.
• Client satisfaction in terms of products and services
• Transparent mode of operation

As a result of the partners' privileged relationships: The establishment of communication channels with suppliers enables:

• Greater comfort
• Faster and more responsive
• Improved anticipatory abilities
• Resource sharing benefits both parties. 

An e-commerce project can thus only be successful if it adds value to the company, as well as its employees, clients, and partners.

E-commerce, in general, ensures that: 

• costs are reduced, 
• product cycle times are reduced, 
• customer response times are shortened,
• service quality is improved. 

As a result, it is not incorrect to state that the primary goals of e-commerce.

• Identifying and meeting the rapidly changing needs of consumers, merchants, organisations, and so on.
• To continuously improve the quality of goods and services based on feedback from all stakeholders.
• To increase turnover by broadening the market and increasing service speed
• Reduce costs by improving information speed and accuracy.

All of these objectives can only be met if the website is user-friendly and has a simple design. Visitors should be able to navigate it correctly. Furthermore, the business must be well promoted in order to establish a good connection with the customers.

Before implementing e-commerce solutions, it is critical to understand the company's e-commerce expectations. Once the expectations are established, the company can start planning its e-commerce strategy. To plan its e-commerce future, a company may benefit from conducting an e-commerce strategy project. E-commerce allows a company to expand market penetration and geographical markets while also facilitating improvements in internal and external processes.

As a result, the processes that will be integrated into the e-commerce infrastructure must be known as well as ready for integration. Implementing e-commerce without first understanding the company's business goals or processes will result in business failure.

E-Commerce Objectives

• Recognize the constantly changing needs of consumers, suppliers, and organizations.
• Meet the ever-changing needs of consumers, suppliers, and organizations.
• Improve the quality of goods and services on a regular basis.
• Take into account feedback from all stakeholders.
• Increase revenue by expanding the market.
• Improve service delivery speed
• Reduce costs by improving information speed and accuracy.