Understanding E-commerce, Lecture notes of Fundamentals of E-Commerce

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E-Commerce

Dr. Ridwan

Introduction

In the emerging global economy, e-commerce and e-business have

increasingly become a necessary component of business strategy and a

strong catalyst for economic development. The integration of information

and communications technology (ICT) in business has revolutionized

relationships within organizations and those between and among

organizations and individuals.

E-Commerce

The use of ICT in business has enhanced

Productivity,

Encouraged greater customer participation,

Enabled mass customization,

Reduced costs.

E-Commerce vs E-Business

Despite that some individuals interchangeably use e-commerce and e-business, both are

clearly different. In e-commerce, ICT is used to enable the external activities and

relationships of the business with individuals, groups and other businesses. While e-

business is the transformation of an organization’s processes to deliver additional

customer value through the application of technologies, philosophies, and computing

paradigm of the new economy. That is, e-commerce is a particular form of e-business.

Application of E-Commerce

Various applications of e-commerce are continually affecting

trends and

prospects forbusiness over the Internet, including

e-banking,

e-tailing and

online publishing/onlineretailing.

Traditional economy system vs Electronic economy system

Electronic Payment Methods

Innovations affecting consumers, include credit and debit cards,

automated teller machines (ATMs), stored value cards, and ebanking.

Innovations enabling online commerce are e-cash, e-checks, smart

cards, and encrypted credit cards. These payment methods are not too

popular in developing countries. They are employed by a few large

companies in specific secured channels on a transaction basis.

Innovations affecting companies pertain to payment mechanisms that

banks provide their clients, including inter-bank transfers through

automated clearing houses allowing payment by direct deposit.

Incorporated facilities to support e-commerce and e-

business

Some of the incorporated facilities to support e-commerce and e-business

systems are highlighted below:

 Mobile (smart) phones

 Website

Ecommerce shopping cart

 Social media

Technical challenges

ICT systems which remain paramount in these systems have to be

effective not only within the boundaries of an organisation, rather

synergise with ICT systems of other organisations. This synergy

rests on user-centred design (UCD) interfaces.

Technical Challenges

Is the present IT infrastructure, in developing countries and Nigeria in

particular, fit for e-commerce?

How to protect the ICT system to prevent its destruction, damage, or

manipulation?

Are the present ICT systems for e-commerce secure?

Are payment procedures and modules secure enough?

How guaranteed is the protection of personal data of involved people,

especially customer data?

Economic Challenges

E-Commerce is primarily a concept of management and

organisation. It is not solely a matter of technology. Some of the

lingering issues confronting e-commerce and e-business

development under guise economic perspectives are highlighted in

the next slide;

Economic Challenges

Is the participation open to all? Who makes and how the decision of

participation is made?

How to adopt or change the business model?

What might happen after e-sales channel is opened? Will traditional sales

channel suffer from it?

How can we measure the success of our e-commerce activities? Will costs

be compensated through revenues?

How do we build relationship with customers, suppliers, and other

business partners to realise the merits of e-commerce?

B2B

Companies provides sales of their products or provide

services to other companies

B2C

Companies provides sales of their products or provide

services to Consumers