What

W at iss Electronic
ect o c Commerce?
Co e ce?
z Electronic Commerce ((E-commerce)) or Electronic
Business (E-business) means shopping on the part of the
Internet called the World Wide Web (the Web).
z For decades, banks have been using Electronic Funds
Transfers (EFT, also called Wire Transfer), which are
electronic
l t i transmissions
t i i off accountt exchange
h information
i f ti over
private communications networks.
z Businesses also have been engaging in a form of electronic
commerce, known as Electronic Data Interchange (EDI), for
manyy yyears.
z Electronic commerce is defined as the use of electronic data
transmission to implement or enhance anyy business process.
ITM Lecture 5
Advanced Diploma (Thames College) 1
Advantages
g of Electronic Commerce
z Access to a gglobal market at 24x7
z Instantaneous feedback
z Paperless
p transactions
z Real time updates to information
z Removal of the middleman function
z No geographic boundaries
z Large
g potential
p market
z Fast turnaround time
z Access to a wide range of suppliers
z Online customer support
z Reduced costs of distribution and processing
ITM Lecture 5
Advanced Diploma (Thames College) 2
Disadvantages
g of Electronic Commerce
z Stem from the newness and rapidly developing pace of the
underlying
d l i technologies.
t h l i
z The costs and benefits have been hard to quantify.
z Had trouble recruiting and retaining employees with the
technological, design, and business process skills needed to
create an effective electronic commerce presence.
z Difficulty of integrating existing databases and transaction-
processing software designed for traditional commerce into
the software that enables electronic commerce.
commerce
z Face cultural and legal impediments to electronic
commerce.
z The legal environment in which electronic commerce is
conducted is full of unclear and conflicting laws.
ITM Lecture 5
Advanced Diploma (Thames College) 3
Economic Forces in E-Commerce
z Reduce Transaction Costs
z Businesses and individuals can use electronic commerce
to reduce transaction costs by improving information
flows and increasing coordination of actions to reduce
uncertainty.
y
z Reduce Cost of Searching for Information
z By reducing the cost of searching for information about
potential buyers and sellers and increasing the number
of potential market participants,
participants electronic commerce
can change the attractiveness of vertical integration for
manyy firms.
ITM Lecture 5
Advanced Diploma (Thames College) 4