Ecommerce Unit - 1

E-Commerce Notes
Unit-1
Introduction to Commerce
• Commerce is basically an economic activity involving trading or the buying
and selling of goods.
For e.g. a customer enters a book shop, examines the books, select a book
and pays for it. To fulfill the customer requirement, the book shop needs to
carry out other commercial transactions and business functions such as
managing the supply chain, providing logistic support, handling payments
etc.
As we enter the electronic age, an obvious question is whether these
commercial transactions and business functions can be carried out
electronically.
In general, this means that no paperwork is involved, nor is any physical
contact necessary. This often referred to as electronic commerce (e-
commerce).
The earliest example of e-commerce is electronic funds transfer. This
allows financial institutions to transfer funds between one another in a
secure and efficient manner.
Later, electronic data interchange (EDI) was introduced to facilitate inter-
business transactions.
E-Commerce
• “E-Commerce or Electronic Commerce, a subset of E-Business, is the
purchasing, selling and exchanging of goods and services over computer
networks (such as Internet) through which transactions are performed”.
• “E-Commerce can be defined as a modern business methodology that
addresses the needs of organizations, merchants and consumers to cut
costs while improving the quality of goods and services and increasing the
speed of service delivery by using Internet”.
• E-Commerce takes place between companies, between companies and their
customers, or between companies and public administration.
FEW EXAMPLES OF E-Commerce are:
• Amazon.com, an online bookstore started in 1995 grew its revenue to more
than 600$ million in 1998.
• Microsoft Expedia, an integrated online travel transaction site helps to
choose a flight, buy an airline ticket, book a hotel, rent a car etc. in only a
few minutes.
E-Commerce vs Traditional Commerce
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• E- Commerce is about the sale and purchase of goods or services by
electronic means, particularly over the internet. In a pure e-commerce
system, transactions take place via electronic means. In this case, you will
access a cyber bookstore and download a digital book from a server
computer.
• In a physical or traditional commerce system, transactions take place via
contact between humans usually in a physical outlet such as a bookstore.
For e.g. if you want to buy a book, you will go to a physical bookstore and
buy the physical book from a salesman.
• E-Commerce is more suitable for standard goods, intangible goods;
whereas traditional commerce is more suitable for non standard goods,
perishable goods, and expensive goods.
• Complex products such as cars are better served by integrating e-
commerce and physical commerce.
Difference between Traditional Commerce and E-commerce

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E-Business
• “E-Business is the conduct of business on the Internet, not only buying and
selling but also servicing customers and collaborating with business
partners”.
• E-Business means connecting critical business systems directly to
customers, vendors and suppliers- via the Internet, Extranet and Intranets.
• Therefore it means using electronic information to boost performance and
create value by forming new relationships between and among businesses
and customers.
• One of the first to use the term was IBM, in October 1997, when it launched
a campaign built around e-business.
E-Business enables organizations to accomplish the following goals:-
• Reach new markets.
• Create new products or services.
• Build customer loyalty
• Make the best use of existing and emerging technologies.
• Achieve market leadership and competitive advantage.
• Enrich human capital.

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Advantages of E-Commerce to Customers
• Reduced Prices:- Costs of products are reduced since the stages along
the value chain are decreased. For instance, intermediaries can be
eliminated by the company directly selling to the customers instead of
distributing through a retail store.
• 24-Hour Access:- Online businesses never sleep as opposed to brick and
mortar businesses. E-Commerce allows people to carry out businesses
without the barriers of time.
• Global Marketplace:- Consumers can stop anywhere in the world.
Currently according to World Trade Organization (WTO) there are no
custom duties put on products bought and traded globally electronically.
This also provides wide selection of products and services to consumers.
• More Choices:- Provides consumers with more choices. For e.g. before
making any purchase, customer can study about all the major brands and
features of any item. It also provides consumers with less expensive
products and services by allowing them to shop in many places.
Advantages of E-Commerce to Businesses
• Increased potential market share:- The internet enables businesses to
have access to international markets thereby increasing their market share.
Companies can also achieve greater economies of scale.
• Low cost Advertising:- Advertising on the internet costs less than
advertising on print or television depending on the extent of
advertisement.Advertising on the internet itself is less costly since there is
less cost associated with it in terms of printing and limited television spots.
• Low barriers to Entries:- Anyone can start up a company on the internet.
Start-up costs are a lot lower for companies since there is less need for
money for capital.
• Strategic Benefits:- The Strategic benefits of making a business e-
commerce enabled is that it helps reduce the delivery time, labour cost and
the cost incurred in document preparation, data entry, error detection etc.
Disadvantages of E-Commerce
• Hidden Costs:- Although buying online is convenient, the cost of this
convenience is not always clear at the front end. For e.g. on-line purchases
are often accompanied by high shipping and re-stocking fees, a lack of
warranty coverage and unacceptable delivery times. In fact, too many e-
commerce companies have developed a reputation of overcharging for
shipping and handling.

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• Lack of Security:- One of the main roadblocks to the wide acceptance of
e-commerce by businesses and consumers alike is the perceived lack of
adequate security for on-line transactions.
For e.g. Consumers are growing increasingly worried about providing
creditcard information over the Internet.
During the past few years, the press has been filled with reports about
hackers breaking into e-business and stealing credit card information.
• Lack of Privacy:- Customers also worry about the privacy implications of
data gathered by organizations of all types and sizes. Even at the simplest
data level, sales information is stored in databases connected to web
servers, thus exposing the information to cyber criminals. Because data
gathering on the web is so easy, databases routinely contain information
about customer purchasing habits, credit information and so on. In many
cases, companies sell customer database information to marketing
companies. In turn, the marketing companies engage in massive e-mail
campaigns to attract new customers. It doesn’t take long for the customer’s
email box to be filled with unwanted email (also known as Spam).
• Network Unreliability:- Although the Internet is designed to overcome the
single point of failure problem, there have been several well-publicized
incidents of network failures during the past few years. Network reliability
problems may be generated by such factors as:-
 Equipment failure in the network connection provider.
 Accidental problems caused by nature-such as lightning, floods,
earthquakes that affect communication lines.
 Long response time due to increased network traffic or
inadequate bandwidth.
• Low Service Levels:- Another common complaint about doing
businessonline is the low level of customer service that online companies
tend to provide. Although technology has automated business transactions

to a large extent, there remains a real need for the human touch.
Therefore e-commerce websites must provide:-
 A pleasant and problem free pre-ordering and ordering experience. The
website design is an important interface.
 Readily available easily used feedback options.
 Quick complaint resolution.
 Timely and low-cost shipping delivery to customers.

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Scope of E-Commerce
• E-Commerce is a general concept covering any form of business
transaction or information exchange executed using information and
communication technologies ((ICT’s).
• It includes electronic trading of goods, services and electronic material.
It takes place between companies, between companies and their
customers or between companies and public administrations.

• Electronic Markets:-
An electronic market is the use of information and communication
technology to present a range of offerings available in a market segment
so that the purchaser can compare the prices of the offerings and make a
purchase decision
e.g. Airline Booking System
• Electronic Data Interchange:-
 It provides a standardized system for coding trade transactions so that they
can be communicated from one computer to another without the need for
printed orders and invoices & delays & errors in paper handling.
 It is used by organizations that make a large no. of regular transactions.
e.g. EDI is used in the large supermarket chains for transactions with their
suppliers.
• Internet Commerce:-
 Information and communications technologies can be used to advertise &
make sales of wide range of goods & services.
 This application is both for business to business & business to consumer
transactions.
e.g. The purchase of goods that are then delivered by post or the booking
of tickets that can be picked up by the clients

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Types of E-Commerce/ E-Commerce Market Models
• There are five types of E-Commerce:-
 Business To Business (B2B)
 Business To Consumer (B2C)
 Consumer To Business (C2B)
 Consumer To Consumer (C2C)
 Business To Government (B2G)
Business To Business (B2B):- Business to Business or B2B refers to e-
commerce activities between businesses. An E-Commerce company can
be dealing with suppliers or distributers or agents. These transactions are
usually carried out through Electronic Data Interchange (EDI). EDI is an
automated format of exchanging information between businesses over
private networks.
For e.g. manufacturers and wholesalers are B2B Companies.
By processing payments electronically, companies are able to lower the
number of clerical errors and increase the speed of processing invoices,
which result in lowered transaction fees.
In general, B2Bs require higher security needs than B2Cs.
With the help of B2B E-commerce, companies are able to improve the
efficiency of several common business functions, including supplier
management, inventory management and payment management.
Business To Customer (B2C):- Business to Customer or B2C refers to E-
Commerce activities that are focused on consumers rather than on
businesses.
For instance, a book retailer would be a B2C company such as
Amazon.com. Other examples could also be purchasing services from an
insurance company, conducting on-line banking and employing travel
services.
Customer To Business (C2B):-
Customer to Business or C2B refers to E-Commerce activities which use
reverse pricing models where the customer determines the prices of the
product or services.
In this case, the focus shifts from selling to buying. There is an increased
emphasis on customer empowerment.
In this type of E-Commerce, consumers get a choice of a wide variety of
commodities and services, along with the opportunity to specify the range
of prices they can afford or are willing to pay for a particular item, service or
commodity.
Customer To Customer (C2C):-

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Customer to Customer or C2C refers to E-commerce activities, which use
an auction style model. This model consists of a person-to-person
transaction that completely excludes businesses from the equation.
Customers are also a part of the business and C2C enables customers to
directly deal with each other.
An example of this is peer auction giant ebay.
Business To Government (B2G):- It is a new trend in E-Commerce. This
type of E-Commerce is used by the government departments to directly
reach to the citizens by setting up the websites.
These websites have government policies, rules and regulations related to
the respective departments.
Any citizen may interact with these websites to know the various details.
This helps the people to know the facts without going to the respective
departments.
This also saves time of the employees as well as the citizens.
History of E-Commerce
• The history of Ecommerce seems rather short but its journey started over
40 years ago in hushed science labs
• In the 1960s, very early on in the history of Ecommerce, its purpose was to
exchange long distance electronic data. In these early days of Ecommerce,
users consisted of only very large companies, such as banks and military
departments, who used it for command control communication purposes.
This was called EDI, and was used for electronic data interchange.
• Originally, electronic commerce was identified as the facilitation of
commercial transactions electronically, using technology such as Electronic
Data Interchange (EDI) and Electronic Funds Transfer (EFT). These were
both introduced in the late 1970s, allowing businesses to send commercial
documents like purchase orders or invoices electronically.
• The growth and acceptance of credit cards, automated teller machines
(ATM) and telephone banking in the 1980s were also forms of electronic
commerce
• In 1982 Transmission Control Protocol and Internet Protocol known as TCP
& IP was developed. This was the first system to send information in small
packets along different routes using packet switching technology, like
today's Internet! As opposed to sending the information streaming down
one route
• Beginning in the 1990s, electronic commerce would include enterprise
resource planning systems (ERP), data mining and data warehousing
• In 1995, with the introduction of online payment methods, two companies
that we all know of today took their first steps into the world of Ecommerce.
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Today Amazon and ebay are both amongst the most successful companies
on the Internet

Functions of E-Commerce
• Marketing:- One of the areas it impacts particularly is direct marketing. In
the past this was mainly door-to-door, home parties (like the Tupperware
parties) and mail orders using catalogues or leaflets. This moved to
telemarketing and TV selling with the advance in television technology and
finally developed into e-marketing.
• Human Resource Management:- Issues of on-line recruiting, home
working and ‘entrepreneurs’ working on a project by project basis replacing
permanent employees.
• Business law and ethics:- The different legal and ethical issues that have
arisen as a result of a global ‘virtual’ market. Issues such as copyright laws,
privacy of customer information etc.
• Management Information System:- Analysis, design and implementation
of e-business systems within an organization ; issues of integration of front-
end and back-end systems.

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• Product Operations and Management:- The impact of on-line processing
has led to reduced cycle time. It takes seconds to deliver digitized products
and services electronically; similarly the time for processing orders can be
reduced by more than 90 percent from days to minutes.
• Finance and Accounting:- On-line banking ; issues of transaction costs ;
accounting and auditing implications where ‘intangible’ assets and human
capital must be tangibly valued in an increasing knowledge based
economy.
• Economy:- The impact of E-commerce on local and global economies;
understanding the concepts of a digital and knowledge based economy and
how this fits into economic theory.

E-Commerce Applications
• E-Marketing
• E-Advertising
• E-Banking
• E-Learning
• Mobile Commerce
• Online Shopping
• Entertainment

• E-Marketing:-
 E-Marketing also known as Internet Marketing, Online Marketing, Web
Marketing.
 It is the marketing of products or services over the internet.
 It is consider to be broad in scope because not refers to marketing on the
internet but also done in Email and wireless media.
 E-Marketing ties together the creative and technical aspects of the internet,
including design development, advertising and sales.
 Internet marketing is associated with several business models i.e., B2C,
B2B, C2C.
 Internet marketing is inexpensive when examine the ratio of cost to the
reach of the target.

• E-Advertising:-

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 It is also known as online advertising it is a form of promotion that uses
internet and World Wide Web to deliver marketing messages to attracts
customers.
Example: Banner ads, Social network advertising, online classified
advertising etc.
 The growth of these particular media attracts the attention of advertisers as
a more productive source to bring in consumers.

• E-Banking:-
 Means any user with a personal computer and browser can get connected
to his banks, website to perform any of the banking functions. In internet
banking system the bank has a centralized data base i.e., web-enabled.
 Best example for E-Banking is ATM.
 An ATM is an electronic fund transfer terminal capable of handling cash
deposits, transfer, Balance enquiries, cash withdrawals, and pay bills.
• SERVICES THROUGH E-BANKING:
 Bill Payment Service
 Fund Transfer
 Investing through Internet Banking
 Shopping

• E-Learning:-
 E-Learning comprises all forms of electronically supported learning and
teaching.
 E-Learning applications and processes include web-based learning,
computer-based learning.
 Content is delivered via. The internet, intranet/extranet, audio, or video tape,
satellite TV.
 E-Learning is naturally suited to distance and flexible learning, but can also
be used conjunction with face-to-face teaching.
 E-Learning can also refer to the educational website such as those offering
learning scenarios worst and interactive exercises for children.
 A learning management system (LMS) is software used for delivering,
tracking, and managing training /education.

• Mobile Commerce:-
 Mobile Commerce also known as M-Commerce, is the ability to conduct,
commerce as a mobile device, such as mobile phone.

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 Banks and other financial institutions use mobile commerce to allow their
customers to access account information and make transactions, such as
purchasing, withdrawals etc.,
 Using a mobile browser customers can shop online without having to be at
their personal computer.
• SERVICES ARE:
1. Mobile ticketing
2. Mobile contract purchase and delivery mainly consumes of the sale of
ring tones, wallpapers and games of mobile phones.
3. Local base services
• Local discount offers
• Local weather
4. Information services
• News
• Sports, Scores

• Online Shopping:-
 Online shopping is the process whereby consumers directly buy goods or
services from a sell in real time, without intermediary services over the
internet.
 An online shop, e-shop, e-store, internet shop web shop, web store, online
store, or virtual shop evokes the physical analogy of buying products or
services in a shopping center.
 In order to shop online, one must be able to have access to a computer, a
bank account and debit card.
 Online shoppers commonly use credit card to make payments , however
some systems enable users to create accounts and pay by alternative
means ,such as
• Cheque.
• Debit cards.
• Gift cards
 Online stores are usually available 24 hours a day

• Entertainment:-
 The conventional media that have been used for entertainment are
1. Books/magazines.
2. Radio.
3. Television/films.
4. Video games.

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Online books /newspapers, online radio, online television, online firms, and
online games are common place in internet where we can entertain.
 Online social networking websites are one of the biggest sources of E-
entertainment for today’s tech-savvy generation.

E-Commerce Trade Cycle

• E-Commerce can be applied to all, or different phases of the trade cycle.
• The trade cycle varies depending on:-
 The nature of the organization (or individuals) involved.
 The nature and type of goods or services being exchanged.
 The frequency of trade between the partners to the exchange process.
• The trade cycle has to support:-
 Finding goods or services appropriate to the requirement and agreeing the
terms of trade often referred to as search and negotiation.
 Placing the order, taking delivery and making payment i.e., execution &
settlement of transaction.
 After sales activity such as warrantee, service etc.
 There are numerous categories of trade cycles depending on the factors
outlined above and, for many transactions, further complicated by the
complexities of international trade.
• Three generic trade cycles can be identified:-
1. Regular, repeat transactions between commercial trading partners (Repeat
Trade Cycle).
2. Irregular Transactions between commercial trading partners where
execution and settlement are separated (Credit Transactions)
3. Irregular transactions in once-off trading relationships where execution and
settlement are typically combined (Cash Transactions)

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• Electronic Markets:-
 It increases the efficiency of the market.
 It reduces the search cost for the buyer and makes it more likely that buyer
will continue the search until the best buy is found.
 It exists in financial markets & they are also used in airline booking system.
 It is irregular transaction trade.

• Electronic Data Interchange:-

 It is used for regular repeat transactions.
 It takes quite a lot of work to set up systems.

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 Mature use of EDI allows for a change in the nature of the product or
service.
e.g. Applications are sending test results from the pathology laboratory to
the hospital or dispatching exam results from exam boards to school.

• Internet Commerce:-
 The first stage
• Advertising appropriate goods and services.
• Internet sites offer only information & any further steps down the trade cycle
are conducted on the telephone.
 The Second stage
• An increasing no. of sites offer facilities to execute & settle the transaction.
• Delivery may be electronic or by home delivery depending on the goods
and services.
 The final stage
• After-sales service.
• On-line support & On-Line services.

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Tools & Technologies for E-Commerce
• Electronic data interchange (EDI)
• Bar codes
• Electronic mail
• Internet
• World Wide Web
• Product data exchange
• Electronic forms
• Electronic Data Interchange (EDI)
 EDI is the computer-to-computer exchange of structured business
information in a standard electronic format. Information stored on one
computer is translated by software programs into standard EDI format for
transmission to one or more trading partners. The trading partners’
computers, in turn, translate the information using software programs into a
form they can understand.
• Bar Codes
 Bar codes are used for automatic product identification by a computer. They
are a rectangular pattern of lines of varying widths and spaces. Specific
characters (e.g. numbers 0-9) are assigned unique patterns, thus creating
a "font" which computers can recognize based on light reflected from a
laser.
 The most obvious example of bar codes is on consumer products such as
packaged foods. These codes allow the products to be scanned at the
checkout counter. As the product is identified the price is entered in the
cash register, while internal systems such as inventory and accounting are
automatically updated.
• Electronic Mail
 Messages composed by an individual and sent in digital form to other
recipients via the Internet.
• Internet
 The Internet is a global network of millions of diverse computers and
computer networks. These networks can all "talk" to each other because
they have agreed to use a common communications protocol called
TCP/IP. The Internet is a tool for communications between people and
businesses. The network is growing very, very fast and as more and more
people are gaining access to the Internet, it is becoming more and more
useful.
• World Wide Web

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 The World Wide Web is a collection of documents written and encoded with
the Hypertext Markup Language (HTML). With the aid of a relatively small
piece of software (called a "browser"), a user can ask for these documents
and display them on the user’s local computer, although the document can
be on a computer on a totally different network elsewhere in the world.
 HTML documents can contain many different kinds of information such as
text, pictures, video, sound, and pointers, which take users immediately to
other web pages.
 It is this ability to jump from site to site that gave rise to the term "World
Wide Web." Browsing the Web (or "surfing the Net") can be a fascinating
activity, especially to people new to the Internet. The World Wide Web is by
far the most heavily used application on the Internet.
• Product Data Exchange
 Product data refers to any data that is needed to describe a product.
Sometimes that data is in graphical form, as in the case of pictures,
drawings and CAD files. In other cases the data may be character based
(numbers and letters), as in the case of specifications, bills of material,
manufacturing instructions, engineering change notices and test results.
 Product data exchange differs from other types of business communications
in two important ways.
 First, because graphics are involved users must contend with large
computer files and with problems of compatibility between software
applications. (The difficulty of exchanging CAD files from one system to
another is legendary).
 Second, version control very quickly gets very complicated. Product
designs, even late in the development cycle, are subject to a great deal of
change, and because manufacturing processes are involved, even small
product changes can have major consequences for getting a product into
production.
• Electronic Forms
 Electronic form is a technology that combines the familiarity of paper forms
with the power of storing information in digital form. Imagine an ordinary
paper form, a piece of paper with lines, boxes, check-off lists, and places
for signatures. To the user an electronic form is simply a digital analogue of
such a paper form, an image, which looks like a form but which appears on
a computer screen and is filled out via mouse, and keyboard.
 Behind the screen, however, lie numerous functions that paper and pencil
cannot provide. Those extra functions come about because the data from
electronic forms are captured in digital form, thus allowing storage in data

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bases, automatic information routing, and integration into other
applications.
Framework of E-Commerce
• This framework, first developed by Kalakota and Whinston, Professors of
Information Systems and prolific authors on the subject, takes a holistic
view and identifies the different components of business and technology
that make up e-commerce. Using the analogy of the architecture of a
building illustrated in Fig., they explain how the different components fit and
interact together, emphasizing the relative importance of each component.

• Kalakota and Whinston use the analogy of a traditional transportation

company to describe the complexity of the network and how the different
components that make up the technology infrastructure are interlinked.
 The network infrastructure is like the network of roads that are
interconnected and are of different widths, lengths and quality – for
example, the Internet, local area networks, intranets. Network
infrastructures also take different forms such as telephone wires, cables,
wireless technology (such as satellite or cellular technology).
 The publishing infrastructure (including the WWW, Web servers) can be
seen as the infrastructure of vehicles and warehouses, which store and
transport electronic data and multimedia content along the network.
Multimedia content is created using tools such as HTML and JAVA. This
content can be very different with varying degrees of complexity similar to
different vehicles travelling on the roads. For example, text only, or more

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complex is an application, such as a computer game, containing audio,
video, graphics and a programme.
 Messaging and information distribution infrastructure are the engines and
fuel, which transport the data around the network. Once the multimedia
content is created, there has to be a means of sending and retrieving this
information, for example by EDI, e-mail, Hyper Text Transfer Protocol.
 Once content and data can be created, displayed and transmitted,
supporting business services are necessary for facilitating the buying,
selling and other transactions safely and reliably. For example, smart
cards, authentication, electronic payment, directories/catalogues.
• The next components which facilitate and enable e-commerce and which
are built on the foundations of technology are:
 Public policy, regulations and laws that govern issues such as universal
access, privacy, electronic contracts and the terms and conditions that
govern e-commerce.
 Universal agreement of technical standards dictate the format in which
electronic data is transferred over networks and is received across user

interfaces, and the format in which it is stored. This is necessary so that

data can travel seamlessly across different networks, where information
and data can be accessed by a whole range of hardware and software
such as computers, palmtops, and different kinds of browsers and
document readers.
 The interaction of people and organizations to manage and coordinate the
applications, infrastructures and businesses are all necessary to make e-
commerce work.
 All these elements interact together to produce the most visible
manifestation of e-commerce. These applications include on-line banking
and financial trading; recruitment; procurement and purchasing; marketing
and advertising; auctions; shopping are just a few examples.
 This is a particularly useful framework for managers to understand the
importance of technology and business, both within the organization and
external to it, in the planning and development of any e-commerce or e-
business solution.

Electronic Data Interchange (EDI)

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• Electronic data interchange (EDI) is the process used by organizations in
order to transmit the data between organizations by electronic means. It is
used to transfer electronic documents or business data from one computer
system to another computer system, i.e. from one trading partner to
another trading partner without human intervention.

• Here, are two major parties i.e. Customer & Merchant,

• Customer firstly order for the required product. Trading party then give
confirmation, Delivery note, Invoice & Acknowledgements for the product
status. At the end, customer pays for the product.
• Here, We have shown the basic overview but EDI is somewhat complex.
EDI is used by organizations for transactions that occur on regular basis to
a predefined format.
• Organizations that send or receive documents between each other are
referred to as "trading partners" in EDI terminology. The trading partners
agree on the specific information to be transmitted and how it should be
used.
• EDI is also known as paperless trading.
• EDI is basically-
• “The transfer of structured data, by agreed message standards, from
one computer system to another, by electronic means.”
 EDI has four elements, each of them essential to an EDI system:
• Structured Data: EDI transactions are composed of codes, & short pieces
of text. Each Element with a strictly defined purpose. Fore.g An order has
codes for the customer & product & values such as quantity ordered.
• Agreed Message Standards: The EDI transaction has to have a standard
format. The standard is not just agreed between the trading partners but is

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a general standard agreed at national or international level. A purchase
order will be one of a number of agreed message standards.
• From one computer system to another: The EDI message sent is
between two computer applications. There is no requirement for people to
read the message or re-key it into a computer system. For e.g. The
message is directly between the customer’s purchasing system & the
supplier’s order processing system.
• By electronic means: Usually this is by data communications but the
physical transfer of magnetic tape or floppy disc would be within the
definition of EDI. Often networks specifically designed for EDI will be used.
Main Features of EDI:
• EDIs use structured formatted messages that are based on agreed
standards - in this way the messages can be read by any system that
understands the rules they are governed by. However, this is not always as
simple as it seems, as there are also the provision of EDI translation
software packages.
• Required to set up an interface between the company computer and the
EDI sent/received document.
• EDI provides a relatively fast delivery of electronic documents from sender
to receiver.
• EDI provides direct communication between applications, rather than
between computers.
• EDI includes data management and networking capabilities, data
processing, the efficient capture of data into electronic form, the processing
and retention of data, controlled access to it, and efficient and reliable data
transmission between remote sites.
Benefits of EDI:
• Reduced paperwork: Even when paper documents are maintained in
parallel with EDI exchange, e.g. printed shipping manifests, electronic
exchange and the use of data from that exchange reduces the handling
costs of sorting, distributing, organizing, and searching paper documents.
• Cost cutting: The use of EDI can cut costs. These include the costs of
stationary & postage but these will probably be fully matched by the costs
of running the EDI service.EDI and similar technologies allow a company to
take advantage of the benefits of storing and manipulating data
electronically without the cost of manual entry.
• Reduced Errors: Another advantage of EDI is reduced errors, such as
shipping and billing errors, because EDI eliminates the need to rekey
documents on the destination side. Keying an information into the computer
system is a source of errors & keying paper orders into order processing
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system is no exception.EDI eliminates this source of errors. On the down
side, there is no order entry clerk who might have spotted errors made by
the customer- the customer will get what the customer asked for.
• Faster Response: With paper orders it would be several days before the
customer was informed of any supply difficulty, such as the product is out
of stock. With EDI the customer can be informed straight way giving time
for an alternative product to be ordered or an alternative supplier to be
used.
• Improved funds transmission: Due to this increased efficiency of non-
paper accounts, cash flow will improve as electric fund transmission is able
to begin much earlier than previously.
• Improved Shipping Service: Shipping is also improved as EDI provides
quick and efficient information as it relies on barcode information to
communicate. It is able to track inventory and eliminates the incidence of
lost packages due to their isolation from the larger shipping order. EDI
greatly improves accuracy of data as it is all automated.
• EDI payment: Payment can also be made by EDI. The EDI payment
system can also generate an EDI payment invoice that can be
electronically matched against the relevant invoices, again avoiding query
& delay.
EDI System

Difference between EDI & Email:

• EDI sounds similar to electronic mail (email), but is actually quite different.
While email allow for free unstructured test messages to be sent from one
computer to another (or multiple) computers, EDI supports structured
business messages to be transmitted between partners. Previously these
would have been hard copy documents or printed business documents. So

23
rather than having documents pass from person to person, they go from
computer to computer.
EDI: THE NUTS AND BOLTS
EDI Standards:
• At the heart of any EDI application is the EDI standard. The essence of EDI
is the coding & structuring of the data into a common & generally accepted
format.
• Documents sent via EDI can serve as input for a receiving a company's
business application because they are formatted according to standards
that stipulate where certain information should be located, such as where
net total amount should appear on an invoice.
• These standards also define how individual pieces of information should be
represented. For example, in the standards for an electronics industry
purchase order, there are specific codes defined to identify the type of
product or service being requested, e.g. PN (company part number), BY
(buyers part number), VP (vendors part number), PW (part drawing), etc.

Components of EDI
1. Application service
2. Translation service
3. Communication service

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1. Application Services :-
It provides the link between application and EDI. It allows you to send documents from
an EDI system. The set of callable routine is used to transfer document from the
business application into EDI document, destination can be either intra-company or to
the external companies.

2. Translation service:-
Converts the outgoing documents from an internal format file to an agreed external
format. Translates internal document from external format to EDI internal format file.

25
3. Communication service:-
The communication service sends and receives transmission files to and from the
trading partners either directly or by using partly service called a valued added network
(VAN).

File Types
EDI creates following files as a document passes through the system:
1. Internal format file (IFF):-
It contains single document for single trading partner.
2. External format file (EFF):-
It contains same data as the internal format file translated into the appropriate standard
document format.
3. Transmission file:-

26
It contains one or more document for the same trading partner. Documents of same
format are packed into functional groups. The functional groups going to one trading
partner are packaged into an interchanged set.

EDI software
1. Translators:-
Every EDI sender and receiver should have EDI translator. It varies based on the
computer on which it is going to reside. The computer may be a micro computer or a
mini or a mainframe. Translator reads the fixed length file and generates valid EDI
standard and maintains control information.
2. Application link software:-
Application link software is used to collect information from the business application and
then it formats into fixed length computer file and passes it onto translators.
Types of EDI standards:
• Proprietary standard - EDI standard developed for a specific company or industry. This
is also called a non-public or private standard.
• Public standard - EDI standard developed for use across one or more industries.

EDIFACT
• Electronic Data Interchange for Administration, Commerce, and Trade is the
international set of EDI standards
• Became a UN standard in 1987
• Maintenance and further development is the responsibility of the United Nations Centre
for Trade Facilitation and Electronic Business (UN/EDIFACT)
• Includes syntax rules and implementation guidelines, message design guidelines, data
elements, code sets, and other definitions
• Used for business-to-business (B2B) communication rather than business-to-consumer
(B2C)
• Allows multi-country and multi-industry exchange
The four pillars of EDIFACT

• Syntax
• Rules for the definition of a message structure

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• Data elements
• Smallest data unit
• Include codes & the values for items such as date & address code
• Segments
• Groups of related data elements
• Messages
• Ordered sequence of segments
• Defines a business transaction

• United Nations/Electronic Data Interchange For Administration, Commerce and

Transport (UN/EDIFACT) is the international EDI standard developed under
the United Nations.

EDIFACT Structure Chart

• For EDIFACT each document type is referred to as a message. For trade purposes
the documents include order, dispatch notice, invoice, payment order &
remittance invoice. Other sectors include their own documentation requirements,
sectors using EDIFACT include:
• Transport
• Customs
• Finance
• Construction
• Statistics
• Insurance
• Tourism
• Healthcare
• Social Administration
• Public Administration

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EDIFACT subsets

EDI Layered Architecture

EDI Semantic layer:-

 Describes the business application
 Procurement example
• Requests for quotes
• Price quotes
• Purchase orders
• Acknowledgments
• Invoices
 Specific to company & software used
EDI Standard Layer:-
 Specifies business form structure so that information can be exchanged it
also influence the content at application layer.
 The most competing standards are:
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• American National Standards Institute(ANSI)X12
• EDIFACT developed by UN/ECE, Working Party for the Facilitation of
International Trade Procedures
EDI Transport Layer:-
 It corresponds with non electronic activity of sending business from one
company to another company.
 It can send via postal service, registered and certified mail & email etc.
 Generally, EDI transport layer chooses email as the carrier service.

EDI Physical Layer:-

 It describes physical devices which are involved in transaction.
 Dial-up lines, Internet, Value-Added Networks etc.

EDI in India
EC/EDI Council of India:
Chairman: Secretary Department of Commerce
Secretariat: EC/EDI Division Department of Commerce
Udyog Bhawan, New Delhi - 110011
EC/EDI council is the apex body consisting of all the key government
departments and representatives of trade and industry. It is responsible for
laying down the policy frame work and direction for:-
• promotion and propagation of EDI and Electronic Commerce.
• creating awareness and education among the potential EC/EDI
functionaries and users
• streamlining procedures and practices attending to legal issues
• human resource development
• any other issue connected with EDI and Electronic Commerce
India EDIFACT Committee:
Chairman: Additional Secretary Department of Commerce
Secretariat: EC/EDI Division Department of Commerce
Udyog Bhawan, New Delhi - 110011
The India EDIFACT Committee (IEC) is responsible for formulatin
standards, streamlining the procedures in line with UN/EDIFACT and
maintain liaison with UN/EDIFACT bodies.
To address all the information needed on different sectors and its interface
with UN/EDIFACT standards following Message Development Groups are
working –
 Ports Message Development Group under Indian Ports Association (IPA)
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 Airports Message Development Group under Airports Authority of India (AAI)
 Financial Message Development Group under Indian Banks Association
(IBA)
 Customs Message Development Group under Central Board of Excise &
Custom (CBEC)
 Private Sector Message Development Group under Federation of Indian
Export Organisations (FIEO)
 Working Group: The working group is responsible for motivating various
functionaries in the government and ensure scheduled implementation of
program.
 Technical Assessment Group: The Technical Assessment Group is
responsible for assessing the messages developed by the various
agencies for structure and syntax conformance, to review the
Implementation Guidelines prepared by various agencies for the respective
messages developed by them and to prepare and circulate the EDIFACT
Message Directory.
 Chairman : Senior Technical Director, NIC Department of Commerce
Secretariat : EC/EDI Division Department of Commerce Udyog Bhawan,
New Delhi - 110011
Education and Awareness: The Department of Commerce has identified
key areas where immediate attention was required such as user awareness
and human resource development. For creating awareness in respect of
EC/EDI, four organizations have been identified namely Federation of
Indian Export Organizations (FIEO), All Indian Management Association
(AIMA), National Informatics Centre (NIC) and Indian Institute of Foreign
Trade(IIFT). The course contents for awareness and training programmes
have been structured and programmes for various level of management
have been devised. This Ministry also organizes EDICON (An international
conference and exhibition on Trade Facilitation (TF/EC/EDI) every year
along with special session for CEOs of top Indian companies.
VAN Service Providers: Department of Telecom has already licensed a
number of operators for Value Added Network (VAN) services. National
Informatics Centre (NIC) and Videsh Sanchar Nigam Limited(VSNL) are
the two major companies/organizations providing high speed information
highway for EC/EDI services within the country and connectivity to foreign
networks. A number of other companies also recognized the emerging
EC/EDI market and approached the Department of Telecommunications,
which is the licensing authority for (VAN) Value Added Network operations
in India. Companies such as Global Electronic Commerce Services Ltd.,

31
Mahindra Network Services, Satyam Infosys, CMC Ltd., Manipal Control
Data Electronic Commerce Systems etc.., have started EC/EDI services.
Co-ordinated EC/EDI implementation project
 To facilitate international trade a co-ordinated EC/EDI implementation
project is underway in following departments/organisations :
– Customs
– Directorate General of Foreign Trade (DGFT)
– Apparel Export Promotion Council/Cotton & Textile Export Promotion
Council etc.
– Port Trusts
– Airport Authority of India (AAI)
– Container Corporation of India (CONCOR)
– Reserve Bank of India (RBI)
– Scheduled Banks
– Airlines
– Indian Railways
– CHA/Freight Forwarders
– Export Promotion Organization

EDI IMPLEMENTATION
• The First Technical element of the EDI system is the EDI software. It is a
complete suite of software for creating, transmitting, receiving, managing
and tracking EDI documents. It contains the tools needed to fine-tune EDI
invoicing, from EDI document editing, to document review, to document
selection.
• The system design is comprehensive and can convert invoices, returns,
change notices, statements, purchase orders, and title catalogues into the
EDI format.
• If pens & things is to send an order from its production control system to
packaging solutions it needs to code that order into the agreed EDI
standard &’squirt’ it into the chosen VADS. To pickup the order at the other
end, packaging solutions has a similar need to extract the data from the
network & to decode the data from EDI message into its order processing
system. The coding/Decoding of EDI messages & interfacing with VADS in
normally achieved using EDI software as shown in Fig.
Sending an order using EDI software

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• Technically EDI comes down to imports/exports to/from your system and
some data communication. It is good practice to keep this import/export as
simple as possible, and to concentrate on the impact of EDI on your system
and organization. You will want ONE import/export in your system (for each
information flow).You don't want to handle all the EDI details in the
import/export module, like you don't want to handle the logic of printer
drivers in your application.

EDI Enabled Procurement Process

PROCUREMENT
 Procurement is the process whereby companies purchase goods and
services from various suppliers. These include everything from indirect
goods like light bulbs, uniforms, toilet paper, and office supplies, to the
direct goods used for manufacturing products.
 Procurement also involves the purchase of temporary labor, energy, vehicle
leases, and more. Companies negotiate discount contracts for some goods
and services, and buy others on the spot. Procurement can be an important
part of a company's overall strategy for reducing costs.
 Historically, the individuals or departments responsible for purchasing a
company's goods and services relied on various methods for doing so. The
most basic included placing orders via telephone, fax, or mail.
E-PROCUREMENT
 Electronic procurement methods, generally referred to as e-procurement,
potentially enable the procurement process to unfold in a faster, more
efficient manner, and with fewer errors. These methods include electronic
data interchange (EDI), online marketplaces or e-marketplaces, and
various blends of the two.

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 EDI deals more with the way information is communicated during
procurement than it does with the act of linking buyers and suppliers.
 By definition, EDI is the electronic exchange of business information—
purchase orders, invoices, bills of lading, inventory data, and various types
of confirmations—between organizations or trading partners in
standardized formats.
 EDI also is used within individual organizations to transfer data between
different divisions or departments, such as finance, purchasing, and
shipping. Two characteristics set EDI apart from other ways of exchanging
information.
 First, EDI only involves business-to-business transactions; individual
consumers do not directly use EDI to purchase goods or services.
 Secondly, EDI involves transactions between computers or databases, not
individuals. Therefore, individuals sending e-mail messages or sharing files
over a network does not constitute EDI.
 EDI can occur point-to-point, where organizations communicate directly with
one another over a private network; via the Internet (also known as open
EDI); and most commonly, via value-added networks (VANs), which
function like telephone lines by allowing for the transfer of information.
 In the early 2000s, although many companies still relied on VANs, the
Internet was playing a larger role in EDI. It is possible for companies to
translate the files used during EDI and send them to another company's
computer system over the Internet, via e-mail, or file transfer protocol
(FTP).
 Because it is an open network and access is not terribly expensive, using
the Internet for EDI can be more cost effective for companies with limited
means.
 It has the potential to provide them with access to large companies who
continue to rely on large, traditional EDI systems.
 The low cost associated with open EDI also means that more companies are
likely to participate. This is important because the level of value for
participants often increases along with their number.
E-procurement tools and applications:
Some e-procurement tools and applications include:
 Electronic systems to support traditional procurement
 EDI (electronic data interchange)
 ERP systems
 Internet as a support or complement to traditional procurement
 Electronic mail (e-mail)
 Web enabled EDI
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 Extensible markup language (XML)
 World wide web (www)
 Internet tools and platforms that replace traditional procurement
EDI (Electronic Data Interchange)
 EDI is an application whereby electronic messages can be exchanged
between computer programs of two separate organizations. Some features
of EDI include:
 Messages are exchanged in groups, known as batches.
 Messages can automatically be sent, transmitted and stored between
computers without retyping or keying data.
 EDI has to be implemented by each pair of organizations (sender and
receiver) who wish to use it. This means that the implementation costs of
EDI are relatively high.
 EDI is mostly used where the messages exchanged concern such matters
as orders, confirmations, transport information and invoicing.
 EDI traditionally runs on so-called, “Value Added Networks”, which are
closed networks (unlike open networks like the Internet).
The figure below illustrates the categories of electronic communication
exchange between people and computers:-

Internet tools and platforms that replace traditional

procurement: Some internet tools and platforms that replace traditional
procurement include:
 E-sourcing
 E-tendering
 E- auctioning
 E-ordering and web-based ERP
 E-informing
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 E-Sourcing: E-sourcing supports the specification phase; it can be used to
pre-qualify suppliers and also identifies suppliers that can be used in the
selection phase. For suppliers the benefit is: “marketing” and for the buying
organizations the benefit is facilitating the sourcing of suppliers. The UN
Global Market Place (UNGM www.ungm.org) is an example of an E-
sourcing tool.
 E-tendering: E-tendering supports the selection stage and acts as a
communication platform between the procuring organization and suppliers.
It covers the complete tendering process from REOI via ITB/RFP to
contracting, usually including support for the analysis and assessment
activities; it does not include closing the deal with a supplier but facilitates a
large part of the tactical procurement process. It results in equal treatment
of suppliers; transparent selection process; reduction in (legal) errors; clear
audit trial; more efficiency in the tactical procurement process and
improved time management of tendering procedures. Some UN
organizations such as UNDP-IAPSO and UNHCR have used E-tendering in
the formulation of long-term agreements for vehicles, tents, motorcycles
and pharmaceuticals through an in-house developed tendering portal.
 E-auctioning: E-auctioning supports the contract stage. It enables the
closing of a deal with a supplier if parties agree on price. They operate with
an upward or downward price mechanism e.g. e-auctioning with upward
price mechanism for the selling organization and e-reverse auctioning with
a downward price mechanism for the buying organization. They can be
made in accordance with traditional ITB/RFP. They are internet based
using open or closed systems.
 E-ordering and web-based ERP: E-ordering and web-based ERP is the
process of creating and approving procurement requisitions, placing
purchase orders, as well as receiving goods and services ordered, by using
software systems based on the Internet.
 E-informing: E-informing is not directly associated with a stage in the
procurement process; it is the process of gathering and distributing
procurement information both from and to internal and external parties
using Internet technology.
E-procurement in the procurement cycle: The figure below shows the
six forms of e-procurement plotted in the procurement process

36
Each of these forms can be explained as follows:
 E-sourcing supports the specification phase; it identifies suppliers that can
be used in the selection phase.
 E-tendering supports the selection phase; it facilitates the REOI and
ITB/RFP activities, usually including support for the analysis and
assessment activities.
 E-reverse auctioning supports the contract phase; it enables closing a deal
with a supplier;
 E-ordering and web-based ERP is the process of creating and approving
procurement requisitions, placing purchase orders, as well as receiving
goods and services ordered, by using a software system based on the
Internet.
 E-informing is not directly associated with a phase in the procurement
process; it is the process of gathering and distributing procurement
information both from and to internal and external parties using Internet
technology.
E-procurement strategy – costs, benefits and risks
The following costs and benefits as identified by de Boer, Harink et al.
(2002), can be influenced by e-procurement:
 The cost of expenditure on goods/services related directly to the
production/service delivery.
 The cost of non-production of goods and services.

37
 The cost of operational procurement activities – e.g., requisitioning, ordering,
expediting and administrative support.
 The cost of tactical procurement activities – e.g., formulating specifications,
selecting suppliers, negotiating with suppliers, contracting, disposals etc.
 The costs of strategic procurement activities – e.g., spend analysis,
transaction analysis, market analysis, planning, developing procurement
policies etc.
 Internal benefits arising from investments in particular inter-organizational
relationships.
 The contribution of investments in particular inter-organizational
relationships to revenues.
 These costs and benefits should be assessed in relation to each e-
procurement tool. While it is usually assumed that e-procurement will
automatically deliver benefits, the actual benefits will depend on many
factors including: cost of required investment, ability to convert associated
savings to cash, nature of the procurement process being automated,
particular supply market and the extent to which the organization supports
its implementation

Web Based E-Commerce

• Only a few years ago, businesses encountered major difficulties in
delivering online information and applications even to their own employees,
especially across geographically dispersed areas and to remote users.
Today, businesses can easily deliver information to employees, customers,
partners, and the public at large, regardless of location. Many observers
point to the Web as the catalyst for this change.
• While many of us use the Internet on a daily basis, few of us have a clear
understanding of its basic operation. From a physical standpoint, the
Internet is a network of thousands of interconnected networks.
Included among the interconnected networks are:
(1) The interconnected backbones that have international reach;
(2) A multitude of access/delivery sub networks and
(3) Thousands of private and institutional networks connecting various
organizational servers and containing much of the information of interest.

38
• The backbones are run by the network service providers
(NSPs), including companies like MCI, Sprint, UUNET/MIS, PSINet, and
BBN Planet. Each backbone can handle over 300 terabytes per month.
• The delivery sub networks are provided by the local and regional Internet
Service Providers (ISPs). The ISPs exchange data with the NSPs at
thenetwork access points (NAPs). Pacific Bell NAP (San Francisco) and
Ameritech NAP (Chicago) are examples of these exchange points (Minoli
and Minoli 1998).
The following Fig. shows a high-level view of the interconnections
among the ISPs, NAPs, and the backbones

• When a user issues a request on the Internet from his or her computer, the
request will likely traverse an ISP network, move over one or more of the
backbones, and across another ISP network to the computer containing the
information of interest.
• The response to the request will follow a similar sort of path. For any given
request and associated response, there is no preset route. In fact, the
request and response are each broken into packets, and the packets can
follow different paths.
• The paths traversed by the packets are determined by special computers
called routers. The routers have updateable maps of the networks on the
Internet that enable them to determine the paths for the packets. Cisco
(www.cisco.com) is the premier provider of high speed routers.

Choosing the right format for Website

Essential Characteristics of a Good Business Site:

39
1. Easy Navigation is a must-have on any website. Visitors should be able
to easily find the information they are looking for, and fast. Think about your
own experience. How many times have you been to a website, took a few
seconds to look around, couldn’t figure out what the purpose of the website
was, and just left? Put important information on multiple pages, clearly label
links, and organize your site. Put yourself in a visitor’s shoes and try to
think about what information they would want and where they would look
for it.
2. A Call to Action takes the purpose of your site to the next level. For
example, if you want to use your site to drive sales, encourage people to
check out your web store by placing links to the store’s page in eye
catching places, or maybe even offer them a discount. Or is your goal to
build relationships with your customers? Try giving them an incentive to
become a member on your site or to sign up for a free newsletter. Giving
freebies is a great way to get a visitor’s attention and to get them to take
action according to your purpose.
3. Attractive Design is a no brainer. Visitors won’t bother with your site if
they can’t make heads or tails of it. Make sure your site includes a great
header that captures a user’s attention and some eye-catching
graphics. Don’t overdo it, though! Having too many graphics or animations
may distract the visitor from your content. You also don’t want your site to
seem too uncoordinated and “overdone”. Another design note: make sure
your content is easy to read. Visitors get turned off when the font colors
and size are too hard to read. Make sure that when you write your content,
you format it for readability, too. Make use of line breaks, bold words, and
bullet points to make sure your visitors can skim through easily.
4. Sticky Content is the meat of your website. The content on your web
pages determines the quality of your website. So what do we mean by
“sticky content”? This is a phrase that describes great content that gets
visitors to spend more time on the website or gets them to return. So how
do you get your content to become “sticky”? You want to make sure that
the content on your site holds value for your visitors. Try to provide useful
information or interesting points of view. Plainly stated, if you have
genuinely interesting and valuable information on your site, people will
value your site and come back again.
5. Credibility is the key to doing business online. The internet can be a
dangerous place full of scams, viruses, and shady dealings. A visitor will
not do business with you if they do not feel that they can trust your site. So
how do some sites seem more credible than others? For the most part,
along with site design, it is the attention to detail. Scammers are often
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looking for a quick buck, so they do they put very little effort into their sites.
There are small signs that visitors look for when they determine credibility.
Some of these signs include a unique domain name (ex: www.thisbiz.com),
an email address that coincides with that domain name (ex:
[email protected]), and maybe even a toll free number. All of these things
show that the business is invested in what it does, and makes the visitor
feel more comfortable about doing business with it. You can obtain all of
these credibility boosters easily through Webs!
6. Mobility is becoming more and more essential as time goes on. Some
experts say that mobile internet browsing will be bigger than desktop
internet browsing by as soon as 2015. Mobile browsing and mobile online
shopping are some of the biggest online trends, so needless to say, it is
important to be ahead of the curve and have a website that can be easily
accessed on a mobile device. Its okay if you don’t have the know-how to do
this because Webs has a Mobile App that makes it easy: just activate it on
the app page, make a few design selections and you are good to go. Our
mobile app was just updated with a bunch of new features, making it a
must-have on any site.
Web Store and Horizontal /Vertical portals
 A Web Portal is a website which works as a single source for different
information on a particular domain. It is a useful access point which helps
the users to go easily from one page to another while navigating for
information which they are in search of.
 Web Portal gives a list of information arranged well for the accessing
purpose of the users. Placing the right amount of keywords in the pages at
the right positions also can make a difference to your website traffic.
Ultimately what matters in content development is to understand and
provide what customers search for the most online.
 Portals have information stored which links to various topics like business,
new, finances, travel, entertainment, shopping and so on. The popular
portals on the internet are Yahoo!, AOL and Google. These portals can be
termed as personal portals, as it stores the history data, emails and profile
information of the user.
 High resolution images and big files of videos may be required to attract
people but it’ll be of no use if the page takes long time to load. An ideal
portal depends mainly on search and navigation, notification,
personalization, task management, work flow and collaboration.
Enterprise portal development can be divided into two divisions –
 Horizontal Enterprise Portals or Mega Portals or HEPs
 Vertical Portals or Vertical Enterprise Portals or VEPs.
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Horizontal Enterprise Portals (HEPs)
A Horizontal Portal is a website that is public and helps to give its users all
the necessary services they are in need of. Examples of horizontal portals
or HEPs are NetCenter and MyExcite. Horizontal Enterprise Portals include
chat groups, horoscopes, weather, stock prices, news and shopping.
These send requests to users for making their page the first page one sees
while using the web. These personalizes the page one sees by selecting
the city one chooses for knowing the weather, selecting the new sources
and stocks one likes to be displayed on the page and alter the web page
appearance.
Thus one is able to build multiple stock portfolios and see the updated
valuations very often. It has to be noted that if one access HEP from
another computer, it loses all the personalization characteristics.
HEPs does not give any kind of information related to any organizations, as
they are not connected to any data sources of any organization other than
their own. It delivers access to all the web information one needs on one’s
own organization.
Vertical Enterprise Portals (VEPs)
Vertical Enterprise Portals or VEPs deliver information related to any
organization. A Vertical Enterprise Portal is an enterprise portal which is
used in a specific department for particular business functions like
accounting, customer service or e-commerce. When a user logs to a VEP,
a customized portal page is produced. This is linked to the user who is
logged on to.

Steps in setting up Business on Internet

1. Create a great site: This is No. 1 for a reason. You have to have a
great-looking, intuitive, easy-to-navigate site if you are going to be taken
seriously by potential e-customers. Your site must look professional.
Pictures and content must load quickly. There can be no dead links. Have a
robust "About" page.
The good news is that it is easy and affordable to create a great site – look
for online hosts that have pre-made templates you can customize.
Web surfers who come to your site will judge it in about three seconds.
That's all you've got. You better impress them the moment they hit it.

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2. Pick your products: You should try to find the right product at the right
price, he will make a profit. Where do you find great, inexpensive products?
It depends on what you plan to sell. It may be a matter of spending
weekends picking up some good, cheap stuff. If you want a more formal
arrangement, there are wholesalers and distributors for almost any product
you need.
3. Have an online catalog or store: When you shop online, there is
usually a catalog of products to choose from: Tiny pictures with product
descriptions. That is what you have to do. Happily, you do not have to
create this from scratch. Your e-commerce site host (see below) will offer a
store creation tool, with point-and-click ways to add products, pictures, and
descriptions.
4. Have the ability to process payments: This issue is two-fold: The
financial ability to process credit card payments comes when you have a
merchant account. Search for that term online. The physical ability to
process such payments is, again, something your host will offer. Search for
"online merchant services" or "E-commerce hosting."
5. Market and promote your site: All these steps are important, but this
one may be a little more important. People have to find your site. No matter
how nice it looks or how cool your products, if no one knows about the site,
it is a waste of time, money, and effort.
Master search engine optimization (SEO) techniques. Engage in viral
marketing. Tweet. Have a Facebook fan page. Try pay-per-click. Advertise.
6. Fulfillment: You have to deliver what you sell, on budget and on time.
Don't forget to add the cost of shipping to your prices.
7. After-sales support: How will you handle returns? What should you
upsell? Support is the difference between a one-time sale and creating a
customer for life.
What is a Domain Name?
 A domain name is a unique name for a web site, like w3schools.com.
 Domain names must be registered. When domain names are registered,
they are added to a large domain name register. In addition, information
about the web site, including the IP address, is stored on a DNS server.
 DNS stands for Domain Name System. A DNS server is responsible for
informing all other computers on the Internet about the domain name and
the web site address.
Registering a Domain
Domains can be registered from domain name registration companies.

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These companies provide interfaces to search for available domain names,
and they offer a variety of domain name extensions that can be registered
at the same time.
Choosing a Domain Name
 Choosing a domain name is a major step for any individual or organization.
 New domain name extensions and creative thinking still offer thousands of
excellent domain names!
 When choosing a name, it is important to consider the purpose of a domain
name, which is to provide an easy way to reach your web site.
The best domains have the following characteristics:
 Short - People don't like to type! A short domain name is easier to type,
read, and remember.
 Meaningful - A short domain is nothing without meaning, 34i4nh.com is not
easy to enter or to remember. Select a domain that relates to your site in a
way that people will understand.
 Clear - Clarity is important when selecting a domain name. Avoid a name
that is difficult to spell or pronounce.
 Exposure - Names that are short and easy to remember are an asset. In
addition to visitors, also consider search engines. Search engines index
your site and rank it for relevance against terms people search for. In order
to maximize your sites exposure, consider including a relevant search term
in your domain. Of course, only consider this if it still maintains a short,
clear and meaningful domain name.
Sub Domains
 Most people are unaware that they use sub domains daily. The famous
"www" of the World Wide Web is an example of a sub domain. Sub
domains can be created on a DNS server, and they don't need to be
registered with a domain name registrar, of course, the original domain
name needs to be registered before a sub domain could be created.
 Examples of sub domains used on the internet are http://store.apple.com
and http://support.microsoft.com.
 Sub domains can be requested from your web hosting provider.
False Domain Names - Directory Listings
 Some providers will offer you a name under their own name,
like: www.theircompany.com/yourcompany/ This is not a real domain
name, it is a directory - and you should try to avoid it.
 Directory domains are not desirable, especially for companies.

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 Typically, directory domains are used for personal web sites and free web
sites provided by an ISP, you may have
seenwww.theircompany.com/~username as an address.
 Competition in domain name registration has resulted in a dramatic
decrease in pricing, so domain sharing is not common, since it is possible
to register a domain name for only $15 per year.
Expired Domains
 Another source for domain registrations is expired domains.
 When you register a domain, think of it as a rental, assuming there are no
legal or trademark issues with the domain name, you are free to use it as
long as you continue to pay the yearly fee (you can now register in advance
as many as 10 years). Some people register domains as speculators,
hoping that they can later sell them, while others may have planned to use
a domain and never had the time. The result is that domains that were
previously registered become available again.
Use Your Domain Name
 After you have chosen and registered your own domain name, make sure
you use it on all your web pages, and on all your correspondence, like e-
mail and traditional mail.
 It is important to let other people be aware of your domain name, and to
inform your partners and customers about your web site.

Web Authoring Tools

Web authoring tools are used to create web content, and cover a wide
range of software programs. The programs include word processors,
desktop publishing programs, webpage builders, website management
systems and HTML editors. Any software program that can be used to
create content that can be uploaded and viewed on the Internet or intranet
network systems is considered a web authoring tool.
 Word Processors
Word processors such as Microsoft Word, WordPerfect or OpenOffice
Writer are some of the most basic types of web authoring tools available.
Word processors contain an option that allows users to create web pages
from text documents. Users type in content using a keyboard and the
processors convert the documents into standard HTML markup and save
the document as a .txt file. The .txt file can be uploaded directly onto a
server to create a quick and easy web page.
 Desktop Publishing

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Desktop publishing programs can be used to create hard copy content,
such as magazines or newspapers, or used as a web authoring tool. The
programs feature word processors to create instantly written web content
combined with advanced web authoring options, such as page layout and
style elements.
Desktop publishing programs create virtual pages of web content that can
be linked together. Users can add multimedia to the pages, such as video,
graphics or audio files. The programs convert the pages to HTML and CSS
sheets that can be uploaded to the Internet.
 Website Management Systems and Webpage Builders
Website management systems, or hosting sites, are systems that allow
users to upload and manage their web pages. These systems usually offer
their users many web-authoring tool options to create and maintain their
web pages. Tools can include webpage builders, shopping systems,
audio/visual editors and domain options.
Many web hosting sites offer their customers free webpage builders that
help them to create web pages or entire websites. The builders incorporate
many web authoring tools, including word processing, graphic editing,
templates and layout schemes. Webpage builders have two main editing
options: HTML or a non-HTML interface. Users who have limited HTML
knowledge can use the non-HTML interface to drop and drag items to
create layouts and use the text option to type in content.
 HTML Editors
HTML editing programs are some of the most powerful web authoring tools,
and are mainly used by professionals to create commercial web pages.
Most HTML editors are similar to web-page builders in offering users HTML
or non-HTML interfaces. The non-HTML interface allows the user to see
how the web page will look when it is uploaded to the Internet. HTML
editors can be used to create basic HTML markup like a word processor, or
can create more advanced language, such as CSS, JavaScript or XML.
Most of the work is performed using a built-in text editor.
The text editors feature an array of functions besides basic content input,
such as linking, spell check, accessibility features and code formatting.
Text editors create the HTML markup as the user is working with the editor,
which allows for faster editing of visual layout.
HTML editors feature HTML validation checkers that will run through a web
page and check for markup errors and accessibility validation issues. Most
of the other web authoring tools don't offer this option; web authors only
become aware of a problem after the web page is on the Internet.

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Website hosting considerations-own versus rented server
Should You Own Your Servers or rent Servers?
• Technology buyers today have more choices than ever before. Hardware
and software can be purchased, leased or rented. Software can deployed
"on-premise" or accessed "on demand" using cloud computing offerings,
where you pay a monthly fee for software access. Each of these options
have their place.
• In spite of the trend toward cloud computing, many companies are still
buying servers and software to run their business. In fact, most businesses
will deploy one or more servers in-house for needs which are not effectively
met by in-cloud services.
• Before you go out and buy your own servers, consider your options. A
server purchase requires an upfront investment, but over the course of
several years, you may meet your business objectives much more
effectively by buying servers and software vs. using cloud computing or co-
location (data center rented server space) options
• When you use cloud computing, you're also usually limited to standard
options. Extensive software customizations are normally installed on your
own server. For example, if you want store documents among your team
"in the cloud" using Microsoft Share Point Online that's easy. But if you
want to customize SharePoint extensively, or use it as your external
website, a traditional on premise SharePoint implementation is going to be
the right choice for you.
• Is your best option to own servers? After you look at the functionality you
require, be sure to take into consideration these hidden expenses of
owning servers in-house so that you can create an apples-to-apples
comparison with your technology decisions
 Server maintenance. No one has yet invented a "set it and forget it" server.
Servers require regular updates and maintenance to keep up with changes
in technology and to respond to malware threats. The operating system
and software applications running on the server also require updates.
 Server administration. Who is going to run your updates and regularly
perform maintenance on your servers? Here you have several options. You
can hire an in-house IT administrator. You can hire an IT consultant. Or you
can hire a managed service provider who will take care of the routine work
for a set monthly price. The option you choose should be based on your IT
workload.
 Server rent. Part of your office rent goes toward providing a secure location
for your server. Because servers consume increased energy, sometimes
they require a dedicated room with temperature control. You don't want
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your employees to freeze just to keep your servers cool. Contact your
hardware provider about estimated energy consumption costs.
 Server backups and redundancy. A server contains your company's most
valuable information. When your server is located in your office, you have
to take extra steps to protect your data from being damaged or destroyed.
This commonly means creating off-site backups and testing to make sure
that the recovery process works. Some companies also invest in server
redundancy, so that if one server crashes, the other one immediately takes
over.
 Server utilization. Companies typically buy more server than they currently
need so they have room for growth. A little extra capacity is necessary, but
too much will cost you. Develop a hardware plan so that you don't overbuy
up front. Instead, scale up as needed. If your servers don't have enough to
do, you're wasting capacity and paying for something that you don't use or
need.
 Beyond the costs of the hardware itself, be sure to factor in how equipped
you are to respond readily to server needs. When email or other critical
business applications go down, someone needs to be available to diagnose
and fix the problem. It's wonderful to have a wealth of options. Just be
aware of the price tag and capabilities that come with each option.

Online Promotion tools & techniques

Online Promotional Tools
• Feedback Forms
• Bookmarking Content
• Daily Give-Away,
• Coupon
• Contests Surveys
• Awards/Testimonials
• Online Chat
• Tours
 Feedback Forms - What better way to find out what people think of your
company than to solicit their opinion. Using customer feedback you can
improve your site and provide better service to your customers. Using
feedback forms also shows your customers that you are interested in what
they have to say, and provides an opportunity to build relationships with
them. For instance, you may send out an email thanking a particular
customer for bringing an issue to your attention and follow-up with a
coupon to show your appreciation. The disadvantage with a feedback form
is the type of information people provide or the questions they may ask. If

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customers cannot find answers on your site, they may resort to using the
feedback form. To receive targeted feedback, it is useful to develop an
online form for customers to complete that leads them through the
feedback process.
 Content - Content is a strong driver for encouraging repeat visits by
customers, particularly when it is fresh, timely, and gives customers a
reason to visit regularly. For example, perhaps you have a ‘Tip of the Day’
or a regular visit by an ‘expert’ well-known in your field of business who
provides online advice. Content that is useful for your visitors and will
enable them to leave with new knowledge will attract them to your site, and
encourage them to check back regularly.
 Daily Give-Away/Coupons/Contests - Sites that offer regular promotions
such as a ‘give-away’, coupons and contests are in a solid position to
capture a regular audience. While the promotion acts as the driver that
attracts customers to visit initially, it provides an opportunity to showcase
new products and services, and deliver important news about your
company. For instance, you may initiate a ‘give-away’ that is a printer, but
also take the opportunity to tell your customers about a printer sale next
week. Your promotional tool has not only lured customers to your site, but it
has also increased the likelihood of getting a sale. Offering various
promotions also enables you to obtain customer information that you can
use in future marketing campaigns.
 Bookmarking - A good way to encourage customers to visit your site is to
ask them to bookmark it. Through bookmarking, they have easy access to
your site and do not have to remember your site’s exact URL to visit.
Bookmarking a site is particularly beneficial for web surfers who like to
follow links. It enables them to go back and take a more in-depth look at
what you have to offer when they need to.
 Surveys - Surveys provide an effective avenue through which to gather
important customer data that will help you to improve your business and
plan for the future. To encourage visitors to complete the survey, you can
provide an incentive such as an opportunity to win a prize.
 Awards/Testimonials - Including awards and testimonials on your site will
provide credibility to your business. They will also provide a foundation for
you to build rapport and trust with your customers, who will be more willing
to visit a site they can trust.
 Online Chat - Online chat mechanisms provide a forum where customers
can come together and share their experiences with each other and you.
This interactive tool allows you direct access to customer opinions where
you can gauge trends and determine their views on the industry.
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 Tours - Online tours provide you with an opportunity to showcase particular
products and services, and highlight their key benefits. For instance, you
may have a CRM product that you would like to promote. What better way
to show how it works than to provide a tour of the product - making what
could be a potentially complex product look simple and easy to use.
Online and Offline Promotional Techniques
 Article Submissions
 Newsletters Press Releases
 Banner
 Advertising
 Sponsorships Link Strategies
 News Groups
 Email
 Marketing
 Search Engine Optimization
 Affiliate Marketing
 Web Site Promotion Services
 Collateral Material
 Trade Shows /Launch Events
 Banner Advertising - If you want to increase your company’s brand
awareness, implementing a banner ad campaign is an effective advertising
method. Banner ads are an effective direct marketing tool that can increase
site traffic if they are creative and include a call-to-action. Advertise on sites
that your customers would visit, and ensure you provide the best possible
offer you can.
 Link Strategies - Linking strategies provide an effective way for customers
to learn about your company through other sites related to your subject.
The key to developing an effective link program is to identify sites that are
not direct competitors but have a similar target market as you. It is also
necessary to find a balance between the amount of traffic that exits your
site through a link and the number of people who visit your site through a
link on another site. Building links from other sites to your site also
increases your site’s relevancy to search engines.

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Web Traffic Analysis
• Web analytics is the measurement, collection, analysis and reporting of
internet data for purposes of understanding and optimizing web usage.
• Web analytics is not just a tool for measuring web traffic but can be used as
a tool for business and market research, and to assess and improve the
effectiveness of a web site.
• Web analytics applications can also help companies measure the results of
traditional print or broadcast advertising campaigns. It helps one to
estimate how traffic to a website changes after the launch of a new
advertising campaign. Web analytics provides information about the
number of visitors to a website and the number of page views. It helps
gauge traffic and popularity trends which is useful for market research.
There are two categories of web analytics; off-site and on-site web
analytics
 Off-site web analytics: refers to web measurement and analysis regardless
of whether you own or maintain a website. It includes the measurement of
a website's potential audience (opportunity), share of voice (visibility), and
buzz (comments) that is happening on the Internet as a whole.
 On-site web analytics: measure a visitor's behavior once on your website.
This includes its drivers and conversions; for example, the degree to which
differentlanding pages are associated with online purchases. On-site web
analytics measures the performance of your website in a commercial
context. This data is typically compared against key performance
indicators for performance, and used to improve a web site or marketing
campaign's audience response.Google Analytics is the most widely-used
on-site web analytics service; although new tools are emerging that provide
additional layers of information, including heat maps and session replay.
Web server logfile analysis:
Web servers record some of their transactions in a logfile. It was soon
realized that these logfiles could be read by a program to provide data on
the popularity of the website. Thus arose web log analysis software.
Two units of measure were introduced in the mid-1990s to gauge more
accurately the amount of human activity on web servers. These were page
views and visits(or sessions). A page view was defined as a request made
to the web server for a page, as opposed to a graphic, while a visit was
defined as a sequence of requests from a uniquely identified client that
expired after a certain amount of inactivity, usually 30 minutes. The page
views and visits are still commonly displayed metrics, but are now
considered rather rudimentary.

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The emergence of search engine spiders and robots in the late 1990s,
along with web proxies and dynamically assigned IP addresses for large
companies and ISPs, made it more difficult to identify unique human
visitors to a website. Log analyzers responded by tracking visits by cookies,
and by ignoring requests from known spiders.
Security of transactions on Web
Secure online transaction models
• -The simplest method of doing direct business online on Internet is to set up
a secure world wide web server then create content pages and program
forms to take orders.
Secure web server:
A secure web server must by definition support some type of security
protocol. The two most important are secure hypertext transfer protocol (S-
HTTP) and secure sockets layer (SSL), which was initially developed by
Netscape and offered to the Internet community as a proposed standard in
1995. However, one of their primary advantages is their relative
unobtrusiveness to the consumer using an SSL or S-HTTP enabled
browser.
Secure server purchasing
• The consumer browses through graphical and textual descriptions of the
merchants' products selects a purchase and usually clicks on a button that
says "buy now" to make a purchase. If consumer is using a secure browser
supported by secure server, that button will produce a form on consumer's
screen which the consumer must complete. Delivery and payment
information has been provided the product will be delivered. If the customer
is using a browser that is not secure or that uses a protocol not supported
by the server, then some other method must be employed to consummate
the transaction. Delivery information represents name, address, delivery
address, email address and any other information necessary to deliver the
product.
If product is a physical item, then a physical destination, preferred shipper
and telephone number may be necessary. If product is a digital item, then it
may be transmitted directly to consumer via the browser by e-mail or
through some other application such as file transfer.
Secure server selling
First the merchant needs to publish product offerings on Internet with
secure server. Servers are available that support SSL, S-HTTP and both.
Because the Internet is an open network based strictly on proper and
widespread implementation of standards, it doesn't make sense for
merchants to limit their potential customers by using only one standard.
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• The merchant must go beyond merely setting up the server. As with mail
orders there must be a mechanism for processing the information
contained on an order form. Most often the merchant will use interfaces of
some type to automate transactions. Companies selling physical products
over Internet use email confirmations and shipping notices to keep
customers up to date on status of orders and all merchants can use
network applications to notify their internal organization of orders.
Digital Certificates
• A digital certificate is a digital form of identification, much like a passport or
driver's license. A digital certificate is a digital credential that provides
information about the identity of an entity as well as other supporting
information. A digital certificate is issued by an authority, referred to as a
certification authority (CA). Because a digital certificate is issued by a
certification authority, that authority guarantees the validity of the
information in the certificate. Also, a digital certificate is valid for only a
specific period of time.
• Digital certificates provide support for public key cryptography because
digital certificates contain the public key of the entity identified in the
certificate. Because the certificate matches a public key to a particular
individual, and that certificate's authenticity is guaranteed by the issuer, the
digital certificate provides a solution to the problem of how to find a user's
public key and know that it is valid.
• These problems are solved by a user obtaining another user's public key
from the digital certificate. The user knows it is valid because a trusted
certification authority has issued the certificate.
• In addition, digital certificates rely on public key cryptography for their own
authentication. When a digital certificate is issued, the issuing certification
authority signs the certificate with its own private key. To validate the
authenticity of a digital certificate, a user can obtain that certification
authority's public key and use it against the certificate to determine if it was
signed by the certification authority.
International standards
• The S/MIME standard specifies that digital certificates used for S/MIME
conform to the International Telecommunications Union (ITU) X.509
standard. S/MIME version 3 specifically requires that digital certificates
conform to version 3 of X.509. Because S/MIME relies on an established,
recognized standard for the structure of digital certificates, the S/MIME
standard builds on that standard's growth and thus increases its
acceptance.

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• The X.509 standard specifies that digital certificates contain standardized
information. Specifically, X.509 version 3 certificates contain the following
fields:
 Version number The version of the X.509 standard to which the certificate
conforms.
 Serial number A number that uniquely identifies the certificate and is
issued by the certification authority.
 Certificate algorithm identifier The names of the specific public key
algorithms that the certification authority has used to sign the digital
certificate.
 Issuer name The identity of the certification authority who actually issued
the certificate.
 Validity period The period of time for which a digital certificate is valid.
 Subject name The name of the owner of the digital certificate.
 Subject public key information The public key that is associated with the
owner of the digital certificate and the specific public key algorithms
associated with the public key s valid and contains both a start date and an
expiration date.
 Issuer unique identifier Information that can be used to uniquely identify
the issuer of the digital certificate.
 Subject unique identifier Information that can be used to uniquely identify
the owner of the digital certificate.
 Extensions Additional information that is related to the use and handling
of the certificate.
 Certification authority's digital signature The actual digital signature
made with the certification authority's private key using the algorithm
specified in the certificate algorithm identifier field.

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