SMU BBA5- BB0025- E Commerce

Bachelor of Business Administration-BBA Semester V

BB0025 – E Commerce – 2 Credits

(Book ID: B0035/B0104)

Assignment (30 Marks)

Note: Each question carries 10 Marks. Answer all the questions.

Q.2 a. What are the different elements of E-C applications? [5 Marks]

A1 E-commerce business applications abound the market. Across the Internet, there are numerous businesses and service providers that are rolling out and offering e-commerce business applications to different users. Because the Internet is a venue where suppliers and distributors are meeting to conduct business transactions, e-commerce business applications are aimed at both suppliers and consumers.

For suppliers: Business-to-business transactions are facilitated online. B2B transactions, as they are called, comprise of activities between two businesses. The most usual players are suppliers and distributors, who are the main players in B2B setups. E-commerce business applications were primarily and initially developed, designed and made for such business players.

Suppliers are the firms that develop, manufacture and produce goods and services. They come out with products that are to be rolled up and sold across the market. Distributors serve as the intermediaries between suppliers and the end consumers. Distributors have the resources and the ability to connect and interact with end consumers for actual sales and purchase transactions of goods and services. Thus, suppliers and distributors need to operate conveniently, accurately and effectively. That is where e-commerce business applications should set in.

E-commerce business applications are specific computer programs and actions that are designed facilitate smoother flow of trades between the two. As always, there is a need to make sure suppliers and distributors are connected and are regularly coordinated. Different e-commerce business applications are designed and made to cater to the varied needs and requirements of both suppliers and distributors. 

For end consumers: If e-commerce business applications are useful for suppliers and distributors, they are also very useful when consumers are involved. In businesses, consumers are the heart and the bloodline of operations because they are the buyers and the providers of sales and revenues. Suppliers and distributors enter B2B activities because they aim to please and cater to the needs and requirements of consumers.

Thus, it would be safe to assert that e-commerce business applications are also beneficial to the consumers. The most usual illustrations and demonstrations of the use of e-commerce business applications to consumers are the emergence and rise of business websites that sell products and services. With the use and integration of e-commerce business applications, such online presences and businesses are made more effective and more useful. End consumers would also find the site more interesting and functional, and would likely move to finally take action.

Good features: If you are buying or securing e-commerce business applications services, you should make sure they are the best in the market. There are common and basic features of good e-commerce business applications. You should always target those that are clearly offering and providing good services and features to the market.  It is just logical that e-commerce business applications are useful and beneficial to all users; suppliers, distributors and consumers. Functions of commands and icons are useful and are highly commendable. Good e-commerce business applications are also easily available and accessible in the market. The usefulness of such computer programs can never be underestimated and underrated especially in the current status of the market, where there are just too many players and the competition is just out of control.

Since the underlying principles of the digital and physical marketplaces are the same, there are a number of lessons you can take from one to the other.

Here are four key elements of e-commerce drawn from the needs of brick-and-mortar businesses and enhanced by technology.

Online Storefront - The Product Manager

The online storefront is your digital place of business.  As with any business you want to customize it to fit your customers’ buying habits, your chosen branding, and the logistical needs of your business.  A product manager lets you enter, store, and share information on products, pick what data is visible to customers, and generally manage the informational aspects of the shopping experience.

To design this well you need to think like a customer.  How can they see what they’re getting?  Pictures, certainly help, but they’re not the only way to learn about a product.  What do other people think of it, has it won any awards, how does it stack up against other products and services?  Customers are going to want to make these sorts of comparisons.  If you want them to stay on your site, you need to find a way that makes it easy for them to do so.

Building an Order - The Shopping Cart

There are a number of ways for customers to build their orders, but the most common is the shopping cart.  A shopping cart integrates with a storefront so that shoppers can add items to their purchase list without ever leaving the product pages.  It also gives shoppers a way to see what they’re planning to order and make changes before completing the sale. The shopping cart software handles everything from when you first indicate you want an item through submitting your delivery address with one exception - the exchange of funds.

However, in settings where you do not need to build an order, like for charitable giving, or single product stores, it is possible to remove the traditional shopping card screens from the user’s experience while retaining all it’s functionality.

Payment - The Merchant Gateway

The merchant gateway serves the same function as the electronic card reader in the checkout line at your favorite brick and mortar store.  It creates a secure online connection to confirm the availability of funds, initiates an electronic transfer, and creates a record of the transaction.  The more reliable merchant gateways also build in safety precautions like address confirmation to cut down on fraudulent purchases. Because much of the information required for the merchant gateway is also used for the shopping cart (amount, address, and so forth) it is important that your shopping cart software is compatible with your merchant gateway.

Fulfillment - Return of the Product Manager and Shopping Cart

Just as the Product Manager lets you store and display information for the shopper, it also lets you enter and retrieve information necessary for filling an order (such as product numbers, vendors, and handling instructions).  This information is handed off to the Shopping Cart software, which can then generate an order form or report that includes all necessary information from every product in the order.

More sophisticated and integrated systems can take this process a step further and automatically generate purchase orders for any additional stock you need.

b. Explain the different layers of OSI reference model [5 Marks]

Ans. The OSI Reference Model

The OSI model is based on a proposal developed by the International Standards Organization as a first step towards international standardization of the protocols used in the various layers. Its main objectives were to:

* Allow manufacturers of different systems to interconnect equipment through a standard interfaces.

* Allow software and hardware to integrate well and be portable on different systems.

The principles that were applied to arrive at the

seven layers are as follows:

* Each layer should perform a well-defined function.

* The function of each layer should be chosen with an eye toward defining internationally standardized protocols.

* The layer boundaries should be chosen to minimize the information flow across the interfaces.

* The set of rules for communication between entities in a layer is called protocol for that layer.

The Physical Layer

* The Physical layer coordinates the function required to carry a bit (0s and 1s) stream over a physical medium.

* It defines electrical and mechanical specifications of cables, connectors and signaling options that physically link two nodes on a network.

The Data Link Layer

* The main task of the data link layer is to provide error free transmission.

* The data link layer provides the functional and procedural means to transfer data between network entities and to detect and possibly correct errors that may occur in the physical layer.

The Network Layer

* The network layer ensures that each packet travels from its sources and destination successfully and efficiently.

* The Network Layer deals with packets of data.

The Transport Layer

* The basic function of the transport layer is to accept data from the session layer, split it up into smaller units if need be, pass these to the network layer, and ensure that the pieces all arrive correctly at other end.

* Furthermore, all this must be done efficiently, and in a way that isolates the upper layers from the inevitable changes in the hardware technology. Transport layer provides location and media independent end-to-end data transfer service to session and upper layers.

The Session Layer

* The session layer allows users on different machines to establish sessions between them.

* A session allows ordinary data transport, as does the transport layer, but it also provides enhanced services useful in some applications.

* A session might be used to allow a user to log into a remote timesharing systems or to transfer a file between two machines.

The Presentation Layer

* The presentation layer is concerned with the syntax and semantics of the information transmitted.

* In order to make it possible for computers with different representations to communicate, the data structure to be exchanged can be defined in an abstract way, along with a standard encoding to be used “on the wire”. The presentation layer manages these abstract data structures and converts from the representation used inside the computer to the network standard representation and back.

The Application Layer

* The application layer is the OSI layer closest to the end user. It means that both the OSI application layer and the user interact directly with the software application.

* Application layer supports functions that control and supervise OSI application processes such as start/maintain/stop application, allocate/deallocate OSI resources, accounting, and check point and recovering.

Q.3 Summarize the future directions of E-commerce. [10 Marks]

A3 The one constant is change, and in the area of an e-business strategy, this is certainly the case. You can see that the need for staying current on technology is the basis of your future e-business strategy. Often companies find themselves using the technology that the market offers to meet the latest customer needs within their organization. You can find the latest information on the ASP industry from the Web sites listened in previous articles in this series and the industry site WebHarbor.com is another excellent source of information on the ASP industry. For industry-specific information and details the direction of technologies, consider attending an IDC conference once or twice a year on the ASP industry to keep current with the latest technology

In an industry where change is the only constant, predicting what lies around the corner is anyone’s guess. In the last two years we’ve seen consumer trends like mobile device adoption, the proliferation of broadband internet and social media change forever the way consumers interact with retailers and brands. As the latest new trends continue to go mainstream in 2012 – like video commerce, floating profiles, location based marketing and intelligent commerce device apps – retailers and brand direct companies face a harsh reality. It’s no longer a matter of keeping up anymore; it is likely a key to staying in business.

The big question for retailers and brand direct companies isn’t, therefore, how to second-guess the future, but rather how best to future proof their commerce platform to cope with whatever the ‘next big thing’ of tomorrow turns out to be. Consumers are the guide; they will choose their own path and you need the correct tools and commerce partner to keep up with their fickle mind set.

Clearly, selecting a platform capable of integrating future social and technological advances will be key. So as online commerce teams race to deliver engaging yet consistent user experiences across all touch points that capture the mind and wallet share, they are not restricted and will have the ability to innovate at the speed of consumer trends. That means working with a platform that makes it easy for them to reconfigure their environment as often as they need to create truly intelligent promotions, optimise all touchpoints and exploit this inbuilt flexibility to effectively pursue any future direction their purchasing communities might take.

Time equals money

Right now web content management, product content management, channel analytics, customer experience management, A/B testing, and achieving seamless order management across the entire multi-channel business and all the interaction touch points is proving essential to staying competitive. That’s a big ask for today’s commerce team, which is under intense time and resource pressures.

So maximising brand performance increasingly depends on the ability to act and react quickly. And that’s why retailers and brand direct companies increasingly need more than just the lowest cost solution, they need a platform that powers innovation ‘on the fly’ and makes it easy to master multiple functions across multiple touch points – including product content management, search engine optimisation, checkout and payment, order management and shipping, multiple websites and localisation, social media and more – with ease.  And all without the need for time consuming or complex programming skills.

Agility has become the name of the game. Whether that’s the ability to instantly tailor the storefront to increase relevance and conversion ratios, optimise online mobile device experience for targeted audience segments, or gaining real-time analytics across all touch points to establish what works best where – and why. Online commerce is no longer a secondary strategy, it is the primary and therefore requires a primary solution partner.

Future proofing your commerce strategy

So in this new mobile and social reality, standing still is not an option, and those online retailers that can adapt and innovate at speed will be best positioned to not just survive but thrive and grow in market as well as into new markets.

The question becomes what is the right investment for moving forward with right tools and services to keep pace. And do you wish to rent, own or completely outsource commerce operations and technology.

Choosing a ‘one size fits all’ platform from a super vendor like IBM for example, might seem a safe bet that’s pretty low risk. But on closer inspection, is this really the case? First it generally requires a commitment to roll all your technology to theirs in order to achieve the desired benefits. This creates the kind of “big bang” approach to conversion that is seldom on time, on budget and delivers the desired results before the target has actually changed. Thus resulting in a huge investment and company wide distraction to deliver something that may no longer be relevant.

You end up with a bloated commerce environment that is highly complex to manage, limited in agility and difficult to fine tune to the individual and unique commerce challenges of your business units, geographical regions and evolving business partner relationships, But they will have achieved their objective which a “technology addition” to their products which is hard to quit.

As we’ve seen, staying fit to compete in the future will require agility at every level – and that includes into the back office and beyond to logistics, delivery and after sales services which need to work hand-in-hand with the commerce platform itself.

The ‘one size fits all’ platform approach is simply no longer nimble enough to support the agile commerce approach retailers and brand direct companies need to remain competitive and “top of mind” with consumers and purchasers. A better approach is a cost-effective eco-system of specialist partners that can deliver both the scale and genuine value-add commerce teams and revenue officers need, opening the way strategies that span touch points, business models, geographical locations, complexity of catalogue and transactional volumes.

So look for a commerce partner who has a long history of delivering an agile core coupled with the partnerships and client base to know what the trends are, be constantly evaluating trends and how to react to them and is not committed to anything other than commerce success. One that offers multiple ways to pay for your commerce strategy and has the right fit of services and support if you have a five or 500 person commerce team. Then you will be able to concentrate on delivering YOUR strategy for business success, not spending all your time dealing with your technology.