UNIVERSITY

OF ANTIQUE
College of Business and
Accountancy

ENTRP 4
E-COMMERCE
MODULE IN ENTRP 4
Table of Contents
CHAPTER 1
Introduction to E-Commerce

Chapter 2
Frameworks and Architectures of E-Commerce

Chapter 3
Business to Consumer (B2C)
 INTRODUCTION TO E-COMMERCE

INTRODUCTION
The term electronic commerce or e-commerce refers to any sort of business
transaction that involves the transfer of information through the internet.

E-commerce means using the Internet and the web for business transactions
and/or commercial transactions, which typically involve the exchange of value (e.g.,
money) across organizational or individual boundaries in return for products and services.

Here we focus on digitally enabled commercial transactions among organizations

and individuals.

Electronic commerce, known as E-Commerce, occurs daily when sellers and buyers
use the internet to conduct business transactions. Technology makes it possible for
anyone to buy or sell practically anything online.

LEARNING OBJECTIVES:
At the end of this lesson, the students are expected to:
1. Define what is internet;
2. Understand the evolution of E-commerce;
3. Define what E-Commerce is;
4. Analyze how the Internet has enabled this type of business;
5. Differentiate the advantages and disadvantages of digital business;
6. Appreciate knowledge and skills in doing business electronically.

MOTIVATION
Essay:
⚫ Explain this quote from Andrew Brown, “The Internet is so big, so powerful and
pointless that for some people it is a complete substitute for life.”
⚫ Is anybody in charge of the internet?
Class Activity:
A C B E F P D S T E
D S F D E R A C I E
F S R E M O T S U C
P U A L W T A A T L
U P M I D O B I I T
K P E V E C S G O T
R L W E M O E O N L
A I O R O L O V R S
M E R Y U N V E G D
T R K E N E B R S J
X D S M R O E N E G
E R I Q S A M M O F
T G A S E R V E R C
R H S K R U I N Z F
E Y L R S S S T E G
P O A E Q S C W X R
Y J T G E H E S O A
H M R C T O D C A D
E O O W K T P G C W
M R P E F W E T H A
P R W S L R N U G Y

⚫ How many words can you find in this puzzle?

⚫ Are you familiar with the words?
Lesson 1: WHAT IS INTERNET?

INTERNET
The internet is a worldwide, publicly accessible network of interconnected
computer networks that transmit data by packet switching using the standard
Internet Protocol (IP). It is a “network of networks” that consists of millions of smaller
domestic, academic, business and government networks which together carry various of
information and services such as electronic mail, online chat, file transfer and the
interlinked web pages and other documents of the World Wide Web.

ORIGIN OF INTERNET
Creation of ARPANET
- ARPANET is a wide area computer network of the late 1960s linking U.S.
government, academic, business, and military sites
- Before it became known as the Internet, ARPA’s (Advanced Research Projects
Agency) network served universities, defense contractors and a few government
agencies.
- The goal of this project was to create a large computer networks with multiple
paths – in the form of telephone lines – that could survive a nuclear attack or a
natural disaster such as an earthquake.

From ARPANET to Internet

- Internet is the result of the linking between ARPANET, NSFnet (National
Science Foundation Network) and other networks.
- The process of connecting separate networks is called internetworking.
- The Internet is born using the TCP/IP (Transmission Control
Protocol/Internet Protocol) standard.

-
From Internet to WWW
- WWW (World Wide Web) was created in 1989 at the European Particle Physics
Laboratory in Geneva, Switzerland as a method for incorporating footnotes,
figures and cross-references into online documents.
- System expands - Advances in computer capacities and speeds - Introduction
of glass-fiber cables - Problems created by its own success
- More computers are linked (1984 – 1000 hosts) - Large volume of traffic
(success of e-mail) - Use of Internet throughout the higher educational system
Tim berners lee invented www

ADVANTAGES OF INTERNET
1. E-mail
2. Information
3. Services
4. Buy or sell products
5. Communities
6. A Leading-Edge Image
7. Improved Customer Service
8. Market Expansion
9. Low Cost Marketing
10. Low Cost Selling
11. Lower Communication Costs

Lesson 2: DEFINING E-COMMERCE

E-COMMERCE
- Electronic commerce, commonly written as E-Commerce, is the trading in
products or services using computer networks, such as Internet. Electronic
commerce draws on technologies such as mobile commerce, electronic fund
transfer, supply chain management, Internet marketing, online transaction,
electronic data interchange (EDI), inventory management systems, and
automated data collection. Modern electronic commerce typically uses World Wide
Web for at least one part of the transaction’s life cycle, although it may also us
other technologies such as E-mail.
- Commonly known as electronic marketing
 • Is a process of buying, selling, transferring or exchanging products, services,
and/or information via electronic networks and computer
• It is the exchange of goods and services between independent organizations
and/or persons supported by a comprehensive usage of powerful ICT systems
and globally standardized network infrastructure.

E-COMMERCE LAW OR REPUBLIC ACT 8792

Section 6.b and 6.k of IMPLEMENTING RULES AND REGULATIONS OF THE ELECTRONIC
COMMERCE ACT

“Commercial Activities” shall be given a wide interpretation so as to cover matters arising

from all relationships of a commercial nature, whether contractual or not. The term shall
likewise refer to acts, events, transactions, or dealings occurring between or among
parties including, but not limited to, factoring, investments, leasing, consulting, insurance,
and all other services, as well as the manufacture, processing, purchase, sale, supply,
distribution or transacting in any manner, of tangible and intangible property of all kinds
such as commodities, goods, merchandise, financial and banking products, patents,
participation, shares of stock, software, books, works of art and other intellectual property.

“Non-Commercial Activities” are those not falling under commercial activities.

E-COMMERCE WITH THE “5-C-MODEL”

1. Commerce
• In the electronic marketplaces there is a matching of customers and
suppliers, an establishing of the transaction terms, and the facilitation of
exchange transactions.
• With the broad move to the Web-enabled enterprise systems with relatively
uniform capabilities as compared to the legacy systems, a universal supply-
chain linkage has been created

2. Collaboration
• The Web is a vast nexus, or network, of relationships among firms and
individuals.
 • More or less formal collaborations are created or emerge on the Web to
bring together individuals engaged in knowledge work in a manner that
limits the constraints of space, time, national boundaries, and
organizational affiliation
• basically done with an influencer who recommends your products to their
audience or with other marketers who expose you to their audience
3. Communication
• As an interactive medium, the Web has given rise to a multiplicity of media
products.
• This universal medium has become a forum for self-expression (as in blogs)
and self-presentation (as, for an example, in Polyvore: luxury fashion and
independent.
• The rapidly growing M-Commerce enables connectivity in context, with
location-sensitive products and advertising.
• In the communications domain, the Web also serves as a distribution
channel for digital products.

4. Connection
• Common software development platforms, many of them in the open-
source domain, enable a wide spectrum of firms to avail themselves of the
benefits of the already developed software, which is, moreover, compatible
with that of their trading and collaborating partners.
• The Internet, as a network of networks that is easy to join and out of which
it is relatively easy to carve out virtual private networks, is the universal
telecommunications network, now widely expanding in the mobile domain.

5. Computation
• Internet infrastructure enables large-scale sharing of computational and
storage resources, thus leading to the implementation of the decades-old
idea of utility computing.

ADDITIONAL TERMS
M-Commerce (Mobile Commerce)
• Commonly understood as the usage of mobile devices for business,
especially mobiles.

E-Procurement (Electronic Procurement)

• It enables widely customers and suppliers to interact and execute purchase
transactions using Web-based applications.
• It can reduced time and cost of procurement process.

E-Government (Electronic Government)

 •
Also known as e-gov, consist of the digital interactions between citizens
and their government (C2G), between governments and government agencies
(G2G), between government and citizens (G2C), between government and
employees (G2E) and between government and business/commerce (G2B).

E-Administration (Electronic Administration)

• Refers to those mechanisms which convert the paper processes in a
traditional office into electronic processes, with the goal to create a paperless
office.

HISTORY OF E-COMMERCE

YEAR FEATURES

❑ Basically initiates the history of e-

commerce, when it was called Electronic
1960
Data Interchange permits companies to
carry out electronic transactions

❑ Michael Aldrich invites online shopping

giving the “concept of teleshopping”
which revolutionizes the way businesses
1978 happen

❑ Michael Aldrich – inventor of online

shopping

❑ Thomson Holidays submits the first ever

B2B electronic transactions using online
1981
technology
 ❑ France Telecom invents Minitel that is
considered the most successful pre-
1982
World Wide Web Online service

❑ Format ASC X 12 provides a dependable

means to conduct electronic business
1984
❑ Gateshead SIS/Tesco is the first B2B
online shopping

❑ Nissan UK sells cars and finance with

1985 credit checking to customers online from
dealers’ lot

❑ Swreg creates the first electronic

1987 Merchant account to let software
developers sell online

❑ Peapod brings the grocery store to the

1989
home PC

❑ Tim Berners-Lee creates the first World

1990 Wide Web server and browser using a
NeXT computer
 ❑ The National Science Foundation (NSF)
1991 lifts restrictions on the commercial use of
NET, clearing the way for eCommerce

❑ J.H. Snider and Terra Ziporyn publish

“Future Shop: How new technologies will
1992
change the way we shop and what we
buy”

❑ Netscape unveils encrypt

❑ Jerry and David’s Guide to the www is
renamed Yahoo
1994 ❑ Third-party payment services for
processing online credit cards sales begin
to appear
❑ The first online banks opens

❑ Amazon.com starts selling each and

everything online
❑ AuctionWeb launches a site soon to
1995
rechristened eBay
❑ A company called Verisign begins
developing digital IDs

❑ PayPal launches pay service

1998 ❑ Google debuts on eCommerce
❑ Yahoo launches Yahoo Stores
 ❑ Zappos launches web-only shoe store
❑ Internet Retailer debut
1999 ❑ Global Sport launches out-sourced
eCommerce platform
❑ Victoria’s Secret debut site

❑ The ongoing dot-com investment bust

2000 ❑ osCommerce is started in Germany as
the exchange project

❑ Amazon.com blazes a trail launching a

2001
mobile commerce site

❑ PayPal is required by eBay

❑ CSN Stores and NetShops begin selling
2002
products through several targeted
domains

❑ Apple launches iTunes store

2003 ❑ Congress passesthe Can-Spam Act
❑ ZenCart branches from osCommerce

❑ Credit Cards companies creates PCI data

2004
security standards
 ❑ First Internet Retailer Conference and
Exhibition
2005 ❑ Launches YouTube
❑ Web 2.0 takes hold making sites more
interactive

2006 ❑ Google debuts google Checkout

❑ Apple launches the iPhone with full web

browsing and downloadable apps,
2007 advancing mcommerce
❑ Free open-source Prestashop software is
founded

❑ Amazon introduces TextBuyIt

2008 ❑ Magento e-Commerce solution is
launched by Varien

❑ Amazon.com and Overtock.com lose New

2009
York online sales tax battle

❑ Magento Mobile is release allowing store

owners to create native mobile storefront
apps
2010 ❑ eCommerce gets serious about social
media ang more personal conversations
taking place between businesses and
consumers
https://visual.ly/community/Infographics/social-media/history-ecommerce
E-COMMERCE VS. E-BUSINESS

✓ E-commerce refers to buying and selling online, while e-business encompasses all
business conducted online.
✓ E-Commerce refers to the performing online commercial activities, transactions
over internet. It includes activities like buying and selling product, making
monetary transactions etc. over internet. Internet is used for E-commerce.
Websites and applications (apps) are required for e-commerce. it is mainly
connected with the end process of flow means connected with the end
customer.

❑ Examples of E-Commerce are online retailers like amazon, flipkart, Myntra,

paytm mall, seller of digital goods like ebooks, online service etc.

Activities of E-Commerce are:

• Buying and selling • Paying different taxes
product online • Online accounting
• Online ticketing software
• Online Payment • Online customer support

✓ E-Business: E-Business refers to performing all type of business activities through

internet. It includes activities like procurement of raw materials/goods, customer
education, supply activities buying and selling product, making monetary
transactions etc over internet. Internet, intranet, extranet are used in e-business.
Websites, apps, ERP, CRM etc are required for e-business.
 ❑ Examples of E-Business are e-commerce companies and its various internal
business activities, auction site, classified site, software and hardware
developer site etc.

Activities of E-Business are:

• Online store setup • Monetary business
• Customer education transaction
• Buying and selling • Supply Chain
product Management
• E-mail marketing
Lesson 3: BUSINESS MODEL RELATED TO E-COMMERCE

INTERNET BASED BUSINESS

1. Access provider
• Ensures access to the Internet
• connects their customers to the Internet through the use of technology such
as dial-up modems, Digital Subscriber Links (DSL), wireless routers or
dedicated high-speed modems

Example: Router

2. Search engine
• The most used software in the Internet
• The starting step for many Internet-based activities
• a program that searches for and identifies items in a database that correspond
to keywords or characters specified by the user, used especially for finding
particular sites on the World Wide Web

Example: Google, Bing, Yahoo

3. Online shop
• a form of electronic commerce which allows consumers to directly buy goods
or services from a seller over the Internet using a web browser or a mobile
app

Examples: Shopee, Lazada, Alibaba

4. Content provider
• Offer content, a completely digital good
• Traditional business models in this area are newspaper publisher, magazine
publisher, radio and television broadcasting services or publishing companies

Examples: information, news, documents, music

 Information broker - a specific variant of a content provider

• Trader of information

5. Portal
• It’s a website which provides a set of services to user
• Often used in big organization to control the access of employees to different
ICT systems

6. Online marketplace/electronic mall

• It’s a website where suppliers and potential customers can come together like
on real marketplace in a small town

Examples: Amazon, AliExpress, Witmart.com

7. Virtual community
• It’s a platform for communication and exchange of experience
• It is similar to virtual club or association

Examples: Google Meet, Zoom, Microsoft Teams

8. Information broker
• The one who collects, aggregates and provides information
• Information with respect to products, prices, availabilities or market data,
economical data, technical information

9. Transaction broker
• Is a person or an organization to execute sales transaction
• Is an agent who is an expert in a specific area and can take over parts of a
business
Example: Job placement services, Travel services

10. Online service provider, cloud service provider (CSP)

• Provides services which can be run electronically e.g. application software
services or ICT infrastructure services like storage or backup services

ADVANTAGES AND DISADVANTAGES OF E-COMMERCE

ADVANTAGES
for the customer for the provider
• Flexible shopping hours • Better customer service can be
• No waiting queues (if net is offered
available and software • Fast communication with
appropriately designed) customer
 • Shopping at home • New customer potential through
• Individual needs can be global visibility
covered if customized if • No intermediaries, who take
offered) away margins
• Global offers, more
competition, pressure on
prices

DISADVANTAGES
for the customer for the provider
• Security risks: • Higher logistics cost (goods
o Data theft (e.g. have to be sent to the
Stealing account or customer’s location)
credit card numbers)
o Identity theft (acting • Anonymity of customers (how to
under our name or make targeted advertisement?)
user identity)
o Abuse (e.g. third
person orders goods
with our identity,
gets them delivered
and we have to pay
for it)

• Crime
o Bogus firm (firms
does not really exist)
o Fraud (e.g. order is
confirmed, invoice
has to be paid, but
goods are never
delivered)

• Uncertain legal status (if

something goes wrong, can
we accuse the provider?)

BUSINESS NET TYPE

1. Business Web Agora
• Objective: To run a marketplace for goods and values
• Attributes: Market information available, negotiation process established,
dynamic pricing through negotiations between market participants
• Rule of the customer: Market participant
 • Benefits: Negotiable products and services
• Examples: eBay, auctions.yahoo

2. Business Web Aggregator

• Objective: To run a digital Super market
• Attributes: Presentation of great variety of products, fixed prices and no
negotiation between supplier and customer, simple fulfilment from the
customer’s point of view.
• Rule of the customer: Customer
• Benefits: Convenient selection and fulfilment from the customer’s point of
view
• Examples: etrade, amazon

3. Business Web Integrator

• Objective: To establish an optimized value creation chain
• Attributes: Systematic supplier selection, process optimization for the total
value chain, product integration along the value
• Rule of the customer: Value driver
• Benefits: Creation and delivery of customer-specific products
• Examples: Cisco, Dell

4. Business Web Alliance

• Objective: To establish a self-organizing value creation space
• Attributes: Innovation in products and process, trust building between
different actors, abstinence of hierarchal supervision
• Rule of the customer: Contributor
• Benefits: Creative and collaborative
• Examples: Linux, music.download

5. Business Web distributor

• Objective: Exchange of information, goods and services
• Attributes: Net optimization, unlimited usage, logistics processes
• Rule of the customer: Recipient
• Benefits: In-time delivery
• Examples: UPS, AT&T, Telekom

UNDERSTANDING WEB 2.0

Web 2.0
o the second stage of development of the World Wide Web, characterized
especially by the change from static web pages to dynamic or user-
generated content and the growth of social media
 o describes the current state of the web, which has more user-generated
content and usability for end-users compared to its earlier incarnation

o does not refer to any specific technical upgrades to the internet. It simply
refers to a shift in how the Internet is used. In the new age of the Internet,
there is a higher level of information sharing and interconnectedness
among participants. This new version allows users to actively participate in
the experience rather than just acting as passive viewers who take in
information.
Examples of WEB 2.0
1. Blogs
▪ a discussion or informational site published on World Wide Web and
consisting of discrete entries (“post”) typically displayed in reserve
chronological order.

2. Social networking services

▪ a platform that build social networks or social relations among people who
share similar interest, activities, backgrounds or real-life connections
▪ are Web-based services that allow individual create a public profile, create
list of users with whom to share connections, and view and cross the
connections within the system
▪ Incorporate new information and communication tools such as mobile
connectivity, photo/video/sharing and blogging

3. Online communities
▪ A virtual community whose members interact with each other primarily via
Internet.
▪ Can act as an information system where members can post, comment on
discussions, give advice or collaborate.

4. Forums/Bulletin boards
▪ Differ from chat rooms

5. Content aggregators
▪ Is a website or computer software that aggregates a specific type of
information from multiple online sources

WEB 1.0
o is the term used to refer to the first stage of development on the World
Wide Web that was characterized by simple static websites.

o The term Web 1.0 didn’t appear until the term Web 2.0 was coined in
1999 by Darci DiNucci. During that time, the web was undergoing a major
 transformation. Most websites in the 1990s had originally been built with
static HTML pages, and a few simple styles embedded in the HTML markup.
In the late 1990s and early 2000s, interactive website features redefined
what could be accomplished in a web browser and marked a major point
of evolution in the world of web development.

Web 1.0 characteristics:

• Static pages: Pages didn’t offer interactive features that changed based
on website visitor behavior. At that point websites were largely
informational.

• Website content stored in files: Virtually every modern website

makes use of a database to store the majority of website content. During
Web 1.0 this was not the case and most website content was stored
directly in the website files, not in a separate database.

• Combination of content and layout: Good web design practice today

dictates the separation of webpage markup and styling. Virtually every
modern website makes use of external style sheets to determine the look
and layout of webpages. During Web 1.0 most styling was built into the
page markup itself, often by misusing HTML elements such as tables.

• Proprietary HTML tags: During Web 1.0 browsers attempted to stand

out by offering support for proprietary tags, creating significant
incompatibility problems between websites that used these tags and site
visitors using unsuported browsers.

• Guestbooks: Website visitor comments were usually added to

a Guestbook page rather than attached directly to content pages.

• E-mailing of forms: Web hosting servers during the Web 1.0 phase
rarely offered support for server-side scripting, which is required to use
the web server to submit a form. As a result, during Web 1.0, when
the Submit button was clicked on most forms the website visitor’s e-mail
client would launch, and the visitor would have to e-mail their form to an
e-mail address provided by the website.

WEB 1.0 VS WEB 2.0

o Web 1.0 is used to describe the first stage of the Internet. At this point,
there were few content creators; most of those using the Internet were
consumers. Static pages were more common than dynamic HTML, which
 incorporates interactive and animated websites with specific coding or
language. Content in this stage came from a server’s filesystem rather
than a database management system. Users were able to sign online
guestbooks, and HTML forms were sent via email.

o Examples of Internet sites that are classified as Web 1.0 are Britannica
Online, personal websites, and mp3.com. In general, these websites are
static and have limited functionality and flexibility.

o The term Web 2.0 first came into use in 1999 as the Internet pivoted
toward a system that actively engaged the user. Users were encouraged
to provide content, rather than just viewing it. People were now able to
publish articles and comments, and it became possible to create user
accounts on different sites, therefore increasing participation. Web 2.0
also gave rise to web apps, self-publishing platforms like WordPress, as
well as social media SITES.
ADVANTAGES AND DISADVANTAGES OF WEB 2.0

Advantages
• Allow students explore through and do research.
• Allows students to collaborate with other on projects in classroom and out
of the classroom like home.
• Allow students to express their ideas freely.
• Receives information from multiple sources.
• Easy for teachers to use in classroom, example most online tools are free
for educational purpose.

Disadvantages
• Over dependent on internet.
• Web services not secure.
• Easily targeted by hackers.
• Sharing information become controversial.
• Parents and teacher think is waste of time- gossip

Web 2.0 Premises:

1. Service is the fundamentals

2. Indirect exchange masks the fundamental basis of exchange
3. Operant resources are the fundamental source of competitive advantage
4. Goods are a distribution mechanism for service provision
5. All economies are service economies
6. The customer is always a co-creator of value
7. The enterprise cannot value, but only offers value propositions
8. A service-centered view is inherently customer-oriented and relational
9. All social and economic actors are resource integrators
10. Value is always uniquely defined by the beneficiary
Lesson 3: TECHNICAL AND ECONOMIC CHALLENGES
OF E-COMMERCE

Technical challenges

- According to industry analysts, the primary technology-related challenges facing

ecommerce businesses include security concerns, bandwidth availability, and
integration with existing protocols. One of the realities of the explosive popularity
of ecommerce is that it has also become a more attractive target for criminals; put
simply, more overall ecommerce activity also means greater security concerns. In
addition, with each new high profile ‘hacking’ incident, consumer confidence in
online retailing takes a ‘hit’ and further raises the importance of ecommerce
security. Additionally, another challenge of ecommerce booming is the growing
concern about the reliability of network infrastructure. Integrating Internet
software with preexisting applications and databases presents another technology-
related challenge; ecommerce technology continuously evolves, and integrating
that new technology is not always an easy—or inexpensive—task.

Economic challenges

- The economic challenges facing e-Commerce merchants include the costs related
to establishing an e-Commerce business, the number of competing online
merchants, issues connected with infrastructure upgrades, and the availability (or
shortage) of skilled staff. Researchers point out that it’s estimated up to 90 percent
of Internet host computers reside in high-income countries that are home to only
16 percent of the world’s population.
 FRAMEWORKS AND ARCHITECTURES

INTRODUCTION
Today, World Wide Web (WWW) has grown tremendous and E-commerce offers
organizations and consumers a unique channel for delivery and purchase of goods and
services.

E-commerce has a big impact in the people and organization. It make business more
attractive and efficient.

LEARNING OBJECTIVES:
At the end of this chapter, students are expected to:

1. Identify the main actors and stakeholders in the area of E-Commerce

2. Analyze the fundamental sales process and his 7+1 process steps
3. Classify the technological elements, which are characteristics for E-Commerce and
have enabled the big success of E-Commerce.

Motivation
Lesson 1: ACTORS AND STAKEHOLDERS OF E-COMMERCE

ACTORS AND STAKEHOLDERS

STAKEHOLDERS - is any individual, group, or party that has an interest in an
organization and the outcomes of its actions.

DIFFERENT ACTORS AND STAKEHOLDERS OF E-COMMERCE

1. Consumers or citizens (C)

2. Business Organization (B)
- Producers and suppliers, trade organization or merchants, banks, insurance
companies or other financial service providers, logistics & transportation firms
3. Governmental authorities (G or A)
- G stand for Government
- A stand for Administration
- Local authorities
- National authorities
- International Authorities
4. Political parties
5. Press and media
6. Non-governmental Organizations (NGOs) – Red Cross, churches and sports
organizations
Types of E-Commerce

1. Consumer to Consumer (C2C)

- is the exchange of products or services among consumers
- a type of trade relations where both sellers and buyers are consumers, not
businesses. It presupposes interaction between parties through a third one,
mostly an online auction or trade website
- Examples:
o Sites: OLX, Shopee, Lazada, Facebook, Pinteres, Instagram
o mary buying an iPod from Tom on eBay
o Me selling a car to my neighbor

2. Business to Consumer (B2C)

- refers to the process of selling products and services directly between a
business and consumers who are the end-users of its products or services
- Examples:
purchase goods from the supermarket
buy items from your favorite shopping web sites
buying load from a loading station

3. Business to Business (B2B)

- is a form of transaction between businesses, such as one involving a
manufacturer and wholesaler, or a wholesaler and a retailer
- refers to business that is conducted between companies, rather than between
a company and individual consumer
- Examples:
o Licandas Variety Store purchase goods from Bancon Marketing
o Jollibee purchase chicken from Cargill Philippines

4. Government to Citizen (G2C)

- part of e-governance
- the objective of this model is to provide good and effective services to each
citizen
- the Government provides the following facilities to citizens through website
- Example:
Order birth or marriage documents online
Books for passport renewal
 Apply for NBI clearance

Government Website
Citizen

5. Government to Business (G2B)

- Is a business model that refers to government providing services o information
to business organization
- Government uses B2G model website to approach business organization. Such
websites support auctions, tenders and application submission functionalities.
- Example:
Bidding on government projects through PhilGEPS
Submitting reports and paying taxes to BIR

Government Website Business

Organization

Lesson 2: FUNDAMENTAL SALES PROCESS

SALES - an exchange of money for goods, services or other property

PROCESS - is a series of actions which are carried out in order to achieve a

particular result.

SALES PROCESS
A sales process is a predetermined, defined sequence of steps taken to turn a potential
lead into a customer. It encompasses every step of the potential customer’s sales journey,
from initial contact to the closed deal.

E-commerce Process
 (https://www.youtube.com/watch?v=9d6Q-lEeKnY)

TYPES OF SALES PROCESS

1. Primary Process
In this process the provider of goods or services is the supplier and the receiver of
such goods or services is the customer.

Contract
Information Initiation
conclusion

Delivery/
Fulfillment

Contract
Information Initiation
conclusion

Figure 1: the primary process

The steps
1. Information Steps
o Search for products and services: by the customers,
o Search for potential suppliers: by the customer,
o Search for potential customers: by the supplier,
o Communicate an offering: by the supplier,
o Communicate a need: by the customer

2. Initiation
o Get into contact: either by the customer or by the supplier
o Request for delivery or service: by the customer
o Offer for delivery or service: by the supplier
o Assess supplier: by the customer
o Assess customer: by the supplier
3. Contact conclusion step
o Negotiate offer: by the supplier and customer
o Negotiate contract: by the supplier and customer
o Place order: by the customer
o Confirm order: by the supplier

4. Delivery/fulfilment step
✓ Proceeding for physical goods:
o Pack goods: by the supplier
o Load goods: by the supplier
o Ship goods: by the shipping agent
o Unload goods: the shipping agent
o Unpack goods: by the customer or the shipping agent or a specific
service provider
o Assemble complex equipment at the customer’s site: by the shipping
agent or a specific service provider,
o Accept delivery: by the customer,
o Approved contract fulfilment to authorize billing: by the customer

✓ Proceeding for physical services:

o Build and maintain service fulfilment capability: by the supplier,
o Come together physically because customer must be an active part in
service delivery: by the supplier and the customer,
o Define service levels: by the supplier, possibly after a negotiation with
the customer,
o Add service level agreement to contract: by the supplier,
o Accept service fulfilment: by the customer,
o Approve contract fulfilment to authorize billing: by the customer,

✓ Proceeding for digital goods:

o Send goods to the customer via the net or provide for download: by
the supplier,
o Protect goods against unauthorized access: by the supplier,
o Accept delivery or confirm successful download: by the customer,
o Approve contract fulfilment to authorize billing: by the customer,

✓ Proceeding for digital services:

o Provide service via the net: by the supplier,
o Define service levels: by the supplier, possibly after a negotiation with
the customer,
o Add service level agreement to contract: by the supplier,
o Initiate service provision: by the customer,
o Accept service fulfilment: by the customer,
 o Approve contract fulfilment to authorize billing: by the customer,

✓ Proceeding for information:

o Like digital goods,

5. Billing/invoicing step:
o Generate invoice: by the supplier,
o Generate attachments to invoice (e.g. protocol of service fulfilment,
protocol of final customer’s approval, certificates, etc.): by the supplier,
o Forward invoice to customer (via the web or via postal services): by the
supplier,

6. Payment step:
o Get money from the customer: by the supplier or a financial services
provider,

7. Service/support step:
o Provide additional information for the customer (e.g. recommendation
usage, FAQ, etc.): by the supplier,
o Manage complaints: by the supplier,
o Repair: by the supplier or a specific service provider,
o Manage returns (if repair is necessary, a wrong product has been delivered
or customer wants to “roll back” the business): by the supplier in the
cooperation with the customer,
o Conduct maintenance (maybe part of the product or maybe a separate
service offered by the supplier): by the supplier or a specific service
provider.

2. Secondary Process
A. Internal Process Control
B. Communication to the customer:
Tracking & tracing: by the supplier or the shipping agent
Inform about order processing status: by the supplier
Announce delivery time: by the supplier or the shipping agent

Lesson 3: TECHNOLOGICAL ELEMENTS

 The Internet is a collection of computers that communicate using a standard set
of protocols. Since there are now millions of computers involved in the Internet, it has
grown to be a major means of communication and allows for users to interact with little
regard to distance or location. Associated with the Internet is a set of technologies
ranging from network protocols to browsers that have been developed to support
Internet operations.

This gives a description of the basis of these Internet technologies and how
these can be used by corporations to improve their operations.

Protocol – a set of rules and standards for data transfer

Packet Switching - a method of slicing digital messages into packets, sending the
packets along different communication paths as they become available, and then
reassembling the packets once they arrive at their destination

Packet - the discrete units into which digital messages are sliced for transmission over
the Internet

TECHNOLOGIES FOR E-COMMERCE

1. Basic Technologies
2. Middleware
3. Platforms
4. Applications
1. BASIC TECHNOLOGIES
A. Transmission Control Protocol/Internet Protocol (TCP/IP)
o The core communications protocol for the internet
o A twin protocol that describes the transportation of data in the Internet and
was introduced in 1978 by the USA-DoD (Department of Defense) as standard
for heterogeneous
o Is independent from any local network technology and can adapt changes at
the local level

TCP – protocol that establishes the connections among sending and

receiving Web computers and handles the assembly of packets at
the point of transmission, and their reassembly at the receiving end
 IP – protocol that provides the internet’s addressing scheme and
its responsible for the actual delivery of the packets

TCP/IP FOUR LAYERS

Layer 1: Local network/network access/ Network Interface

- responsible for placing packets on and receiving them from the network
medium, which could be a LAN (Ethernet) or Token Ring network, or
other network technology

Fiber Distributed Data Interface (FDDI)

- which has a ring structure, provides a transmission rate up to 100

Mbit/sec and is defined in the ANSI standards X3T9.5, X3.139 and
X39.5 (ANSI – American National Standards Institute)

Token Ring

- a ring structure in which the token-possession grants the processor

permission to transmit on the medium, is an advancement of FDDI
and is defined by the standard IEEE 802.5 (IEEE = Institute of
Electrical and Electronics Engineers)

Ethernet

- provides transmission rates up to 10 Gigabit/sec

Layer 2: Internet (IP)

- responsible for addressing, packaging and routing messages on the

Internet

IP ADDRESS

- a unique identifier assigned to each device

connected to a network computer
- IP Address are not random, they are
mathematically produced and allocated by
the Internet Assigned Numbers Authority
(IANA)
- It has 2 parts:
• Network ID - uniquely identifies the host’s network on an internetwork
• Host ID - identifies the host within its network
 Bit – a single position in an IP Address

Two version of IP Address

1. IPv4 (Internet Protocol version 4)

- Is the fourth version of Internet Protocol (IP)
- It is one of the core protocols of standards-based internetworking methods
in the internet
- Has a length of 4 bytes respectively 32 bits
- Each byte is presented as a decimal figure between 0 to 255:
nnn.mmm.pp.sss

Example: IP Address 192.168.178.25

Binary form: 11000000.10101000.10110010.00011001

2. IPv6 (Internet Protocol version 6)

- The most recent version of the Internet Protocol (IP)
- Communication protocol that provides an identification and location system
for computers on networks and routes traffic across the Internet.
- Was developed by the IETF to deal with the long-anticipated problem of
IPv4 address exhaustion
- Uses a 128-bit address, allowing 2128 addresses or more than 7.9x1028
times as many IPv4
- It is larger address than IPv4
- Represented as eight groups of four hexadecimal digits

Example: 2001:0DB8:0000:0042:0000:8A2E:0370:7334
LAYER 3: HOST-TO-HOST OR TRANSPORT LAYER (TCP)

- Responsible for providing

reliable data transport service
between two computers (host)
over Internet.
- It accepts data from a data
stream, divides it into chunks
and adds a TC; header creating
TCP segment

Two types of Host to Host

A. User Datagram Protocol

The User Datagram Protocol gives application programs direct access to

a datagram delivery service, like the delivery service that IP provides.
This direct access allows applications to exchange messages over the
network with a minimum of protocol overhead.

UDP is an unreliable, connectionless datagram protocol. "Unreliable"

merely means that the protocol has no technique for verifying that the
data reached the other end of the network correctly. Within your
computer, UDP will deliver data correctly.

Why do applications programmers choose UDP as a data transport

service? A number of good reasons exist. If the amount of data being
transmitted is small, the overhead of creating connections and ensuring
reliable delivery may be greater than the work of retransmitting the
entire data set. In this case, UDP is the most efficient choice for a host-
to-host transport layer protocol.

Applications that fit a "query-response" model are also excellent

candidates for using UDP. The response can be used as a positive
acknowledgment to the query. If a response is not received within a
 certain time period, the application just sends another query. Still other
applications provide their own techniques for reliable data delivery and
do not require that service from the transport layer protocol. Imposing
another layer of acknowledgment on any of these types of applications is
redundant.

B. Transmission Control Protocol

Applications that require the host-to-host transport protocol to provide

reliable data delivery use TCP because it verifies that data is delivered
across the network accurately and in the proper sequence. TCP is
a reliable, connection-oriented, byte-stream protocol.

(https://www.cisco.com/E-
Learning/bulk/public/tac/cim/cib/using_cisco_ios_software/linked/tcpip.h
tm)

LAYER 4: PROCESS/APPLICATION

- the seven-layer OSI model is the top layer that approaches protocols for
application interaction with the network
- Provides a wide variety of applications with the ability to access the services
of the lower layers
(https://www.techopedia.com/definition/6006/application-layer)

RFC - Request for Comments

- a memorandum published by the Internet Engineering Task Force
(IETF) describing methods, behaviors, research, or innovations
applicable to the working of the Internet, along with Internet-connected
systems

Types of Application Layer

1. HTTP (Hypertext Transfer Protocol)
- Functions as a request-response protocol in the client-server computing
model. A web browser for example may be the client and an application
running on a computer hosting a website may be the server.
- is an application layer protocol for transmitting hypermedia documents,
such as HTML. It was designed for communication between web browsers
and web servers, but it can also be used for other purposes. HTTP follows
a classical client-server model, with a client opening a connection to make
a request, then waiting until it receives a response. HTTP is a stateless
protocol, meaning that the server does not keep any data (state) between
two requests. (https://developer.mozilla.org/en-US/docs/Web/HTTP)
 - the most common protocol you see on the Internet. It provides the
gateway for community between your computer or device, the client,
and the website or online resource found on a server. Typically, when
you click on a result in a search engine or type a URL into your browser,
you're making an HTTP request. Most websites that don't need to
protect information use HTTP, including news websites, blogs, business
sites and even advertisement pop-ups.
(https://smallbusiness.chron.com/examples-hypertext-transfer-protocols-
72578.html)

- HTTP is documented in RFC 2616 (=HTTP/1.1)

- HTTPS
HTTP Secure is an extension of HTTP with an extra protocol that
encrypts and protects your information. This protocol requires that you
authenticate yourself with the website, which helps to protect any
sensitive information shared between you and the Web server. Websites
that use HTTPS include banks, email clients and e-commerce sites.
When you log in to these sites, you often see "https" in the protocol
portion of the URL. (https://smallbusiness.chron.com/examples-
hypertext-transfer-protocols-72578.html)

2. FTP (File Transfer Protocol)

- A standard network protocol used to transfer computer files from one
host to another host over a TCP-based network, such as the Internet.
- Is built on a client-server architecture and uses separate control and
data connections between the client and the server
- Documented in RFC 959 (1985)

3. SMTP (Simple Mail Transfer Protocol)

- An Internet standard for electronic mail transmission.
- First defined by RFC 821 in 1982 and was last updated in 2008 with the
Extended SMTP additions by RFC 5321
- E-mail is one of the most widely used application services in internet and
widely used in business activities
- It is sometimes paired with IMAP or POP3 (for example, by a user-level
application), which handles the retrieval of messages, while SMTP
primarily sends messages to a server for forwarding.
- provides a set of codes that simplify the communication of email
messages between email servers (the network computer that handles
email coming to you and going out). It’s a kind of shorthand that allows
a server to break up different parts of a message into categories the
other server can understand. When you send a message out, it’s turned
into strings of text that are separated by the code words (or numbers)
that identify the purpose of each section.
- Example SMTP : Outlook.com, Gmail and Yahoo! Mail)
4. WWW (World Wide Web)
- Is an open source information space where documents and other Web
resources are identified by URLs (Uniform Resource Locator),
interlinked by hypertext links, and can be accessed via the Internet
- Simply known as “the Web”
- Is the primary tool billions of people use to interact on the Internet
- Invented by the English scientist Tim Berners-Lee in 1989
Tim Berners-Lee – wrote the first Web browser in 1990 while he was
employed at CERN (Conseil Europeen pour la Recherche Nucleaire) in
Switzerland
- Author of the book “Weaving The Web”
- WWW is documented in RFC 1738 (1994) and WWW is administered by
W3C (World Wide Web Consortium)

Berners-Lee Three Essential technologies

a. universal documents identifier (UDI), later known as uniform
resource locator (URL) and uniform resource identifier (URI)
b. HyperText Markup Language (HTML)
c. Hypertext Transfer Protocol (HTTP)

5. Mobile Communication
GSM/EDGE (Global System for Mobile Communication)
- Originally Groupe Special Mobile
- A standard developed by the European Telecommunications Standards
Institute (ETSI) to describe protocols for second-generation (2G) digital
cellular networks used by mobile phones
- is now considered the standard for communication globally, particularly
in Asia and Europe, with its availability in over 210 countries worldwide
(https://www.androidauthority.com/gsm-vs-cdma-689328/)
- 1998 3rd Generation Partnership Project (3GPP)
- Part of evolution of wireless mobile telecommunication

3GPP Extensions:
✓ High Speed Circuit Switched Data (HSCSD): up to 115kbit/sec
✓ General Packet Radio Service (GPRS): up to 536 kbit/sec,
✓ Enhanced Data Rates for GSM Evolution (EDGE): up to 220 kbit/sec
download; up to 110 kbit/sec upload

EDGE (Enhanced Data for Global Evolution)

- A digital mobile phone technology that allows improved data

transmission rates as a backward-compatible extension of GSM.
 - It provides nearly three times faster speeds than the outdated
GPRS system. The theoretical maximum speed is 473 kbps for 8
timeslots but it is typically limited to 135 kbps in order to conserve
spectrum resources. Both phone and network must support EDGE,
otherwise the phone will revert automatically to GPRS.
- EDGE meets the requirements for a 3G network but is usually
classified as 2.75G.
- Can be used for any packet switched applications, such as an
Internet connection, and thus creates the basis for M-coomerce

UMTS (Universal Mobile Telephone System)

- Was developed in the 3GPP
- A mobile cellular system for networks based on the GSM standard and
provides transmission rates up to 384 kbit/sec, with HSDPA up to 14,4
Mbit/sec.

High Speed Downlink Packet Access (HSDPA)

- an enhanced 3G (third generation) mobile communications protocol in the
High-Speed Packet Access (HSPA) family
- dubbed 3.5G, 3G+, or Turbo 3G, which allows networks based on Universal
Mobile Telecommunications Systems (UTMS)

6. HTML (Hypertext Markup Language)

- is the set of markup symbols or codes inserted into a file intended for
display on the Internet. The markup tells web browsers how to display a
web page's words and images
- Allows images and objects to be embedded and can be used to create
interactive forms.

HyperText is the method by which Internet users navigate the web

HTML 5
- is a markup language used for structuring and presenting content on the
World Wide Web. It was finalized on October 28, 2014 by the World Wide
Web Consortium
- Fifth revision of the HTML

HTML 4
- was the previous version and standardized in 1997
- Its core aims are to improve the language with support for the latest
multimedia while keeping it easily readable by humans and consistently
understood by the computers and devices

HTML tags
 - is commonly defined as a set of characters constituting a formatted
command for a Web page. At the core of HTML, tags provide the
directions or recipes for the visual content that one sees on the Web.
- include tags for references, tags for tables, tags for headlines or titles, etc
- consists of the tag name in angular brackets and may come in pair, which
makes up the beginning and ending tag that frame a particular piece of
code, text or other tags
- The beginning tag consists of the name, optionally followed by one or
more attributes, whereas the ending tag consists of the same name
preceded by a forward slash ("/")
- For example, the HTML tag "<p>" begins a paragraph, whereas "</p>"
ends that paragraph. This is a consistent syntax in HTML.

Pros and cons of HTML

Pros of using HTML include:

✓ Is widely adopted with a large amount of resources available.
✓ Is natively run on every browser.
✓ Is relatively easy to learn.
✓ Has a clean and consistent source code.
✓ Is open source and free to use.
✓ Can be integrated with other backend programming languages such as
PHP.

A few cons to consider are:

✓ Does not have very dynamic functionality and is mainly used for static web
pages.
✓ All components must be created separately even if they use similar
elements.
✓ Browser behavior can be unpredictable. For example, older browsers may
not be compatible with newer features.

Example Explained

✓ The <!DOCTYPE html> declaration defines that this document is an HTML5

document
✓ The <html> element is the root element of an HTML page
✓ The <head> element contains meta information about the HTML page
✓ The <title> element specifies a title for the HTML page (which is shown in
the browser's title bar or in the page's tab)
✓ The <body> element defines the document's body, and is a container for all
the visible contents, such as headings, paragraphs, images, hyperlinks,
tables, lists, etc.
✓ The <h1> element defines a large heading
✓ The <p> element defines a paragraph

7. XML (Extended/Extensible Markup Language)

- Is a markup language that defines a set of rules for encoding documents
in a format that is both human-readable and machine-readable
- Was developed by W3C
- is a software- and hardware-independent tool for storing and
transporting data
- design goals of XML emphasize simplicity, generality and
usability over the Internet.
- It is a textual data format with strong support via Unicode for different
human languages
- XML advantage is that the data structure of a documents is documented
within the document.
- It is much greater size of documents compared to EDIFACT
- XML-based format have become the default for many office-productivity
tools, including Microsoft Office (Office Open XML), OpenOffice.org and
LibreOffice (OpenDocument) and Apple’s iWork

Unicode
- is a computing industry standard for the consistent encoding,
representation and handling of text expressed in most of the world’s
writing system
- Developed in conjunction with the Universal Coded Character Set
(UCS) standard and published as the Unicode Standard
- Later version contains a repertoire of more than 128,000 characters
covering 135 modern and historic scripts

✓ As of 2009 hundreds of documents formats using XML syntax have

been developed including RSS (Rich Site Summary: a family standard
Web feed formats to publish frequently updated information: blog
 entries, news headlines, audio, video), Atom (Atom Syndication
Format; used Web feeds or Atom Publishing protocol for creating and
updating Web resources, SOAP (Simple Object Access Protocol;
protocol specification for exchanging structured information in the
implementation of Web services in computers networks) and ZHTML
(Extensible HyperText Markup Language, mirrors or extends versions
of HTML)

8. XML Database
- Is a data persistence (a data structure that always preserves the
previous version of itself when it is modified) software system that
allows data to be stored in XML format. These data can be queried,
exported and serialized into the desired format
- Usually associated with document-oriented databases

Two categories of XML databases are available:

1. XML enabled data bases: These may either map XML to traditional
database structures, accepting XML as input and rendering XML as output,
or more recently support native XML types within traditional database
2. Native XML data bases: The internal model of such databases depends
on XML and uses XML documents as the fundamental unit of storage,
which are, however not necessarily stored in the form of text files.

2. MIDDLEWARE
- Consist of technologies building the link between hardware and application
software.
- is software that enables one or more kinds of communication or connectivity
between two or more applications or application components in a distributed
network
- is software that provides common services and capabilities to applications
outside of what’s offered by the operating system helps developers build
applications more efficiently. It acts like the connective tissue between
applications, data, and users.

Term middleware first appeared in a report following the 1968 NATO Software
Engineering conference in Garmisch-Partenkirchen, Germany

TYPES OF MIDDLEWARE
1. CORBA (Common Object Request Broker Architecture)
- Is a standard defines by the Object Management Group (OMG) designed to
facilitate the communication of software system that are deployed on diverse
platforms.
 - Enables collaboration between systems on different operating systems,
programming languages and computing hardware
- Objects are described in a syntax called Interface Definition Language (IDL)
- CORBA specification dictates there shall be an ORB (Object Request Broker)

ORB (Object Request Broker) - handles the communication, marshaling,

and unmarshaling of parameters so that the parameter handling is
transparent for a CORBA server and client applications

2. Java Native Interface (JNI)

- Is an alternative to CORBA.
- Programming framework that enables java code running in a Java Virtual
Machine (JVM) to call and called by native applications and libraries written in
other languages as C, C++ and assembly.

3. Database systems
- A database is an organized collection of structured information, or data,
typically stored electronically in a computer system. A database is usually
controlled by a database management system (DBMS).

Typical examples for structures data are:

❑ Address data
❑ Orders
❑ Shipping documents
❑ Invoices
❑ Tax declarations

Types of databases
1. Relational databases
- became dominant in the 1980s. Items in a relational database are organized
as a set of tables with columns and rows. Relational database technology
provides the most efficient and flexible way to access structured
information.

2. Object-oriented databases
- Information in an object-oriented database is represented in the form of
objects, as in object-oriented programming.

3. Distributed databases
- A distributed database consists of two or more files located in different sites.
The database may be stored on multiple computers, located in the same
physical location, or scattered over different networks.

4. Data warehouses
- A central repository for data, a data warehouse is a type of database
specifically designed for fast query and analysis.
5. NoSQL databases
- A NoSQL, or nonrelational database, allows unstructured and semistructured
data to be stored and manipulated (in contrast to a relational database,
which defines how all data inserted into the database must be composed).
NoSQL databases grew popular as web applications became more common
and more complex.

6. Graph databases
- A graph database stores data in terms of entities and the relationships
between entities.

7. OLTP databases
- An OLTP database is a speedy, analytic database designed for large
numbers of transactions performed by multiple users.
These are only a few of the several dozen types of databases in use today.
Other, less common databases are tailored to very specific scientific,
financial, or other functions. In addition to the different database types,
changes in technology development approaches and dramatic advances
such as the cloud and automation are propelling databases in entirely new
directions. Some of the latest databases include

8. Open source databases

- An open source database system is one whose source code is open source;
such databases could be SQL or NoSQL databases.

9. Cloud databases
- is a collection of data, either structured or unstructured, that resides on a
private, public, or hybrid cloud computing platform. There are two types of
cloud database models: traditional and database as a service (DBaaS). With
DBaaS, administrative tasks and maintenance are performed by a service
provider.
-
10. Multimodel database
- Multimodel databases combine different types of database models into a
single, integrated back end. This means they can accommodate various data
types.

11. Document/JSON database

- Designed for storing, retrieving, and managing document-oriented
information, document databases are a modern way to store data in JSON
format rather than rows and columns.

12. Self-driving databases

- The newest and most groundbreaking type of database, self-driving
databases (also known as autonomous databases) are cloud-based and use
 machine learning to automate database tuning, security, backups, updates,
and other routine management tasks traditionally performed by database
administrators.

4. DIRECTORY SERVICES

We need directory services for the following purposes:

✓ Address lists,
✓ User management: A common usage of a directory service is to provide
a “single sign on” where one password for a user is shared between many
service, such as applying a company login code to Web pages (so that
staff log in only once to company computers, and then are automatically
logged into the company intranet),
✓ Authentication

There are standards widespread used:

➢ LDAP (Lightweight Directory Access Protocol)

- is an open, vendor-neutral, industry standard application protocol
for accessing and maintaining distributed directory information
services over an internet Protocol (IP) network.

- Is documented in RFC 4510 and RFC 4511. It has become the

de-facto—standard in industry for authentication, authorization
as well as user and address management. Is based on a subset of
the standards contained within the X.500 standard

➢ X.500 is a series of computer networking standards covering electronic

directory services. These directory services were developed in order to
support the requirements of X.400 electronic mail exchange name
lookup.

5. WEBSERVER
- Is a virtual computer which helps to deliver Web content that can be
accessed through the Internet.

Well-known products are:

o Apache HTTP Server,
o Microsoft Internet Information Services (IIS)

6. WSDL (Web Services Description Language)

- The actual version is WSFL 2.0 (2007). WSDL has been developed by W3C
(World Wide Web Consortium)
- an XML –based interface definition language that is used for describing the
functionality
 - often used in combination with SOAP and an XML Schema to provide Web
services over the Internet.

7. SOAP (Simple Object Access Protocol)

- Is a protocol specification for exchanging structured information in the
implementation of Web services in computer networks.
- It uses XML Information Set for its message format, and relies on other
application layer protocol =s, most notably HTTP or SMTP, for message
negotiation and transmission.

3. PLATFORMS/FRAMEWORKS

PORTAL
- Is a central entry and navigation point to provide access to a virtual area
and to deliver additional information to the user.
- It works as an interface between user and system.

Two categories of portals:

1. Web portal
- Horizontal portal is used as a platform to several companies in the same
economic sector or to the same type of manufacturers or distributors
- A vertical portal is a specialized entry point to a specific market or industry
niche, subject area, or interest. Some vertical portals are known as “vertical
information portals” (VIPs).

2. Enterprise portal
- Provides a secure unified access point, often in the form of a Web-based
user interface,
- is a framework for integrating information, people and process across
organizational boundaries,
- is designed to aggregate and personalize information through application-
specific portlets (Portlets are pluggable user interface software components
that are managed and displayed in Web or enterprise portal)

Technical elements of a portal are:

• use of Web-servers and Web-browser on the basis of HTTP and HTML,
• integration of “business objects”, JavaBeans (In computing, based on the
Jave Platform, JavaBeans are classes that encapsulate many objects into
a single objects (the bean) or ActiveX components
ActiveX – is a deprecated software framework created by Microsoft for
content downloaded from the network, particularly in the context of the
World Wide Web)

• Access to data via ODBC or JDBC (Open/Java Database Connectivity)

Content Management System (CMS)

 - Is application software that allows publishing, editing and modifying
content, organizing, deleting as well as maintenance from the central
interface

Main areas of functionality are:

✓ Content management application (CMA) is the front-end user
interface that allows a user, even with limited expertise to add,
modify and remove content from a Website without the intervention
of Webmaster
✓ Content delivery application (CDA) compiles that information and
updates the websites.

Web Application Server

- Is a piece of software, which provides the run-time environment for the
server application

Java EE (Java Platforms, Enterprise Edition)

- An API (Application programming interface) and run-time environment for
developing and running enterprise software, including network and Web
services, and other large scale, multi-tiered, scalable, reliable and secure
network applications

.NET (Dot-net)
- Is a proprietary platform provided by Mic

4. APPLICATION

A. Supplier Oriented
o SRM (Supplier relationship Management
o SCM (Supply Chain Management)
o Procurement System
B. Back Office
o Enterprise Resource Planning
C. Customer Oriented
o Online Shop
o CRM (Customer Relationship Management)
D. Market Place
 BUSINESS TO CONSUMER (B2C) BUSINESS

INTRODUCTION
In the B2C business normally the selling partner is a business organization, but it
is not a Must. Normally the buying partner is a single person. So B2C is a
synonyms for the selling process considered from the point of view of the
supplier.

LEARNING OBJECTIVES

At the end of this chapter, students are expected to:

1. Identify the fundamental sales process and its variants.
2. Know the three challenges in realizing B2C business
3. Know that digital business creates new opportunities to learn more about
customers.

MOTIVATION

Lesson 1: B2C PROCESS MODEL AND ITS VARIANTS

B2C is a synonym for the selling process considered from the point of view of the
supplier

BUYING VIA INTERNET

- The process starts, when the customer generates an order via an online
shop. The order is processed in the backend ERP systems as a sales order
and all ordered products and components are verified.

VARIANTS OF THE PROCESS

A. Information Step
- the first variant is, that the customer becomes active. Even here we
have to differentiate because the starting point may be different:
✓ Product/ service is clear, the supplier has already been selected,
✓ Product/ service is clear; the supplier has not yet been selected,
✓ Product/ service has to be determined.

The customer may enter the process via search engines,

marketplaces/multi-shops, communities, rating platforms or known
providers respectively their websites or online shops.
The result of this step will be, that
✓ the customer identifies relevant products/services,
✓ the customer identifies relevant providers,
✓ the customer conducts a pre-selection or
✓ the customer makes his final decision.
Cookies are token or short packets of data passed between
communicating programs, where the data is typically not meaningful to
the recipient program. Cookies are used to identify specific users and
improve your web browsing experience.

Recommendation Engines are software systems, which analyze what

the customer has purchased or checked. From this behavior they make
conclusions what the customer could be interested in when he visits the
online shop for the next time.

Product Data Model

1. BMEcat provides a basis for a simple adoption of catalogue data from

many different formats and particularly provides the requirements to
promote the Internet goods traffic among companies in Germany.

2. cXML (Commerce XML) is a protocol that is published for free on

the internet along with its DTD. It is open to all their use without
 restrictions apart from publications of modifications and naming that
new protocol.

3. GTIN is an identifier for trade items developed by GS1. Identifiers are

used to look up product information in a database, which may belong
to a retailer, manufacturer, collector, researcher, or other entity. GTIN
is contained in GS 1- 128, an application standard within the Code
128 barcode. It identifies data with Application Identifiers (AI) and is
a universal identification system in logistics. GTIN has 13 digits:

Country prefix =3 digits,

Company identifier =4-6 digits,
Company specific article number = 5-3 digits,
Check digit.

4. IBSN is a numeric commercial book identifier which is intended to be

unique. Publisher’s purchase IBSNs from an affiliate of the
International IBSN Agency. An IBSN is assigned to each separate
edition and variation of a publication.
➢ P3P Platform for Privacy Preferences a protocol is
available allowing websites to declare their intended use of
information they collect about Web browser users.

B. Initiation Step
When customer and supplier at the end of the information step know that
they want to conduct a business transaction together, then they initiate it
according to the specific nature of the goods to be sold respectively
bought.

• Electronic Shopping Cart the customer picks up interesting

products or services and puts them into his shopping cart. He
removes products or services, which are not interesting for him.

C. Contract Conclusion Step

At the end, both, the supplier as well as the customer, have to sign a
contract. Initially all relevant data have to be put together.
 Solvency Check where the request of the customer to buy something
from the supplier must be answered by the supplier. The customer will
check either his own customer profile data or by sending a request to a
specific financial information service provider.
⚫ A severe problem for many online shops are the so called junk
orders, where people order things just for fun and never plan to
accept delivery and pay for the delivered goods.

D. Delivery/Fulfilment Step

If real goods have been sold, then the contract between supplier and
customer is followed by the compilation of the ordered goods. The
process step is finished with a confirmation of the delivery by the
customer. This may be integrated into the proof of delivery.

E. Billing/ invoicing step

After the confirmation of delivery the billing and invoicing step can be
started.
• Factoring is one of the billing/invoicing step were the supplier sell
the debt claims to a third party and this third party will take over the
cashing.
• Dunning Process if the payment is done after delivery and not in
combination with delivery then there may be a delay of payment and
the supplier has to initiate a corresponding dunning process to get his
money.

F. Service / Support Step

To be successful in E- commerce does not only depend on interesting

products, low prices and fast delivery. To generate a high customer
satisfaction presumes a professional service and support. There must be
one effective complaints management. Supplementary and replacement
deliveries, including return consignment, must be in place and run
smoothly if needed.
G. Communication/ tracking & tracing step

Customer and supplier want to monitor the order processing status. This
presumes a seamless and automated data capture during the total
workflow, e.g. by scanner or RFID technology (Radio Frequency
Identification).
 • RFID (Radio Frequency Identification) is the wireless use of
electronic fields to transfer data for the purpose of automatically
identifying and tracking tags attached to objects. The tags contain
electronically stored information.
• E-Procurement is a synonym for the selling process considered
from the point of view of the customer. It is similar to B2C, but now
the buying organization is the driver. This organization is the only
customer and is looking for many suppliers. Thus a procurement
platform if we talk about IT systems is somehow an inverse of an
online Shop.

Lesson 2: THE PRICING CHALLENGE

Pricing strategies

The first pricing strategy is that the supplier sets the prices for his
products. The customer makes a “take it or leave it” decision. In the E
commerce world this leads to the lower prices and price dispersion. The
problem for the supplier is, that it is easy to reduce prices but it is extremely
hard to increase process.
The second pricing strategy is the auction. Here we have a reasonable
competition among customers. The customer who offers the highest amount
of money gets the product. However, there is a difference to real life auction if
we are in the digital world. There are different end of auction rules, hard ending
times and late minute bidding. The disadvantage for the customer is that
Internet auctions run without physical inspection of goods. Thus the reputation
of the supplier is a fundamental prerequisite for the trust of the customer in
such transactions.

The third pricing strategy is the individual negotiation between

customer and supplier.
Reasons of price dispersion
In the economic theory there is the law of one Price. That means that in ideal
market with the identical and total information for every participant demand and
supply lead to a unique price for a specific product.
First of all suppliers are not interested in ideal markets with total transparency and
full information for everybody. And they tried to create the impressions as if they
would offer a unique product or service as well as keeping competitors on Distance.
The objective of the first approach is that the (potential) customer stops his
research process because he thinks that he has already found the best offer. The
objective of the second approach is to exclude competitors from the competition,
so that they are not able to offer something adequately to the customer.
• Price Dispersion occurs when different sellers offer different prices for the
same good in a given market.

LESSON 3: THE FULFILMENT CHALLENGE

DELIVERING REAL GOODS

Real goods cannot be forwarded electronically to the customer. Forwarding

agencies and
trucking companies are needed.
• Dual use goods are products and technologies normally used for civilian
purposes but which may have military applications. Ex. (missiles, nuclear
technology, chemicals)

DELIVERING DIGITAL GOODS

Digital goods can be copied without any damage of the original copy. Thus the
“master
copy”must be protected against unauthorized usage. Examples: e-books, online
games & downloadable music.
The process runs as follows:
• The software supplier provides a software product.
• With specific packer software the product is registered at a clearing
organization,
a unique product identification number due to a global numbering standard is
generated and the software is transferred to a BOB (Box of Bits) in coded form.
Lesson 4: THE PAYMENT CHALLENGE
First we differentiate following categories of money:
• Money in cash the money in cash means that you have a cash in hand
or on your wallet that can be used to exchange goods and services. The
examples of cash equivalents include commercial paper, treasury bills,
 short term government bonds, marketable securities, and money market
holdings.
• Book money it is primarily denotes bank account balances. Book money
differs from base money in that it is not part of a limited supply of actual
currency released by a central bank or monetary authority, but is simply a
debt agreement between a commercial bank and a depositor. The
examples of book money are loans and securities trading.
• E-money electronic money or e-money is the electronic alternative to
cash. It is monetary value that is stored electronically on receipt of funds,
and which is used for making payment transactions. E-Money can be held
on cards, devices, or on a server. E-money can serve an umbrella term for
a number of more specific electronic value products and services.
The examples are pre-paid cards, electronic purses, such as M-PESA in
Kenya, or web-based services, such as PayPal.

Primary payment methods are:

• Cash payment
- is bills or coins paid by the recipient of goods or services to the provider.
It can also involve a payment within a business to employees in
compensation for their hours worked, or to repay them for minor
expenditures that are too small to be routed through the accounts payable
system.
The examples are Cash purchases of merchandise, supplies, equipment,
or any other asset, Cash payments for expenses such as salaries, rent,
insurance, and taxes and Cash refunds to customers for the return of
merchandise sold for cash.

• • Bank transfer
- is when money is sent from one bank account to another. Transferring
money from your bank account is usually fast, free and safer than
withdrawing and paying in cash.
The example story is that a human uses an Automatic Teller Machine
(ATM) to transfer funds from her checking account to her savings
account.

• Debit note
-is a commercial document issued by a buyer to a seller as a means of
formally requesting a credit note. Debit note acts as the Source document
 to the Purchase returns journal. In other words it is an evidence for the
occurrence of a reduction in expenses.

• Wallet payment
is a small software program used for online purchase transactions.
Many payment solution companies, such as CyberCase, offer free Wallet
software that allows several methods of payment to be defined within the
wallet. Apple Pay, Samsung Pay, and Android Pay are examples of mobile
wallets that can be installed on a hand-held or wearable device.

Derivative payment methods are:

• Debt collection and billing methods - Debt collection is the process of
pursuing payments of debts owed by individuals or businesses. An
organization that specializes in debt collection is known as a collection
agency or debt collector. Billing Methods are used to determine the rate
for time worked. This helps communicate the value of your time to the
Client, or help you put a value on your business' productivity.

• Check-based methods
- These are ordered through the buyer's account. They are essentially
paper forms the buyer fills out and gives to the seller. The seller gives the
cheque to their bank, the bank processes the transaction, and a few days
later the money is deducted from the buyer's account. With the increasing
trend toward fast payment, cheques are seen as slow and somewhat
outdated.

• • Mobile phone based methods

-Mobile payments refer to any payment made using a mobile device. Due
to our ever-increasing smartphone dependence, various ways have been
developed to allow consumers to pay conveniently through a phone.

• • Credit card based methods

- Credit cards are used in much the same way as a debit card but the key
difference is customers are paying with credit i.e. money they’ll pay back
at a later date. When someone takes out a credit card they’ll be given a
credit limit - how much they’re allowed to spend - and when they use it
they’re agreeing to pay back the balance plus interest.
 • E-Mail based methods
-A simple and straightforward way for a customer to pay for goods online
is via a link sent in an email. The person selling the goods a custom link,
sends it to the customer and once it’s opened, they’re taken to a secure
payment page where they can complete the transaction without the need
for any interaction.

• • Prepaid charge card based methods

-Pre-paid cards are an alternative to carrying cash. They can be used in a
similar way to debit and credit cards but the person doesn’t need an
account to have one. Instead, they’re loaded up with cash as and when
needed much like a pay-as-you-go mobile phone.

B2C BUSINESS AND CRM

CRM (Customer Relationship Management)
- They aims at tracking and analysis of all interaction of the firm with
the customer in order to optimize sale volume, customer
effectiveness, customer satisfaction and customer loyalty.
It integrates all customer- oriented processes and consider the
customer as a strategic asset or (A regular customer is the most
profitable customer).

There are 6 Typical CRM- Process

1. Process Customer Request
2. Inform Customer
3. Solve Problem of Customer
4. Conduct Repair and Service
5. Manage complaints
6. Run customer loyalty improvement programs.
B2C SOFTWARE SYSTEMS
Online Shop is characterized by one supplies and customer. Process and
Software are under the control of the supplier.

Procurement Platform
It is a computerized system designed to manage the procurement
process. It is often include an enterprise resource planning (ERP) or
accounting software product. Procurement Platform is characterized by a
suppliers and on customer.
CUSTOMER RELATIONSHIP MANAGEMENT (CRM)
 • is an approach to manage a company’s interaction with current
and future customer.
It tries to analyze data about customer’s history with a
company.
One important aspect of CRM system it complies information
from a range of different channels, including a company’s
website, telephone number, email, etc.

5 Types of CRM System that Usually Provides the Following

Functionality
External Interfaces
Marketing
Sales
Service
Internal Interfaces