CHAPTER 1

INTRODUCTION

Information and communication systems embedded in a global net have profound influence

on all the industries. The internet has given a relatively new revolution to the world by

making it possible to do the business through the internet, which is known as e-commerce.

The entrance of e-commerce has cut down the barriers of distance and communication.

Electronic commerce or e-commerce is changing the entire business scenario due to the

powerful innovation of internet which is spreading fast to the world. E-commerce is

concerned with buying and selling of information, products and services over computer

communication networks. E- Commerce helps to conduct traditional commence through

new ways of transferring and processing information. Information is electronically

transferred from computer to computer in authorised manner.

OBJECTIVES
 1 The objective of the study is to familiarize with the e-business application.
1 To know the operation of the online share trading.
1 To study overall performance of the company.
1 To know the strength and weakness of online trading apart from the traditional
system.

METHODOLOGY
The data from which the information is obtained can be divided in to Primary data and

secondary data.

Primary Data

The source of primary data is collected through personnel interview with various

employees like officers and staff.

Secondary Data

Data obtained from company brouchers, website, etc.

SCOPE OF THE STUDY

The scope of the study was get familiarize with the functioning of the organization

and get a general understanding of e-business and its applications.

LIMITATIONS

1 Employees and officers are busy so that information is very limited.

1 The time allowed for the study is not enough to cover all the areas.
 1 The main source of data is secondary data.

CHAPTER II
 E-BUSINESS: THEORETICAL
PERSPECTIVE

E-BUSINESS
Electronic business methods enable companies to link their internal and external data

processing system more efficiently and flexibly, to work more closely with suppliers and

partners, and to better satisfy the needs and expectation of their customers. E-business may

be broadly defined as any business process that relies on an automated information system.

Today, this is mostly done with Web-based technologies.

The term “E- Business” was coined by Lou Gerstner, CEO of IBM. In practice, e-business

is more than just e-commerce. While e-business refers to more strategic focus with an

emphasis on the functions that occur using electronic capabilities, e-commerce is subset of

overall e-business strategies. E- Business seeks to add revenue streams using the World

Wide Web or the Internet to build and enhance relationships with clients and partners and

to improve efficiently using the Empty Vessel Strategy. Often, e-commerce involves the

application of knowledge management systems.

E-business involves business processes spanning the entire value chain: electronic

purchasing and supply chain management, processing orders electronically, handling

customer service, and cooperating with business partners. Special technical standards for

e-business facilitate the exchange of data between companies. E-business software

solutions allow the integration of intra and inter firm business processes. E-business can

be conducted using the Web, the Internet, Intranets, Extranet or some combination of these.

E-business is a technology-mediated exchange between parties (individuals or

organisations) as well as electronically based intra or inter-organisational that facilitates

such exchanges. E-business consists primarily of the distributing, buying selling and

marketing and services of products or services over electronic system such as Internet and

other computer networks. The Information Technology industry might see it as an

electronic business application aimed at commercial transactions. It involves electronic

fund transfer, supply chain management e-marketing, online transition processing,

electronic data interexchange, automated inventory management system and automated

data-collection system. It typically uses electronic communication technology such as the

internet, extranet, E-mail, E books database and mobile phones.

EVOLUTION

The origin of commerce by exchanging goods before recorded history. Now commerce is

a basic activity of goods trading and buying in everyday life entering into the electronic
era, the way individuals and organisations do business and undertake commercial

transactions have been changed this indicates the movement toward electronic commerce.

This means no paper work and physical interaction is limited.

The proliferation of e-business is changing markets and modelling in new modern

consumer. If the company is not preparing itself to be e-business ready, be assured that the

required timing of entry might come sooner than later as the trend continues towards

customer becoming more demanding of what companies should offer. The customer of the

millennium is more than ever choosing when, how, where and through what media to do

business. The planning of how companies choose to hear and later their mode of operation

to serve their customer and vendors is of outmost strategic importance as a new era of

completion begins.

The emergence of electronic commerce started in the early 1970s with the Electronic Fund

Transfer (EFT), which allows organisations to transfer funds between one another

electronically. Then another technology Electronic Data Interchange (EDI) was

introduced. It helps to extend inter business transactions form financial institutions to other

type of business also provides truncation and information exchanges form suppliers to the

end customers. However, the early system development was limited to special networks

such as large corporations and financial institutions, which are costly and complex to

administer for small business. So EDI was not widely as expected.

With the progress of internet technology and highly developed global internet community,

is a strong foundations of prosperous electronic commerce continues to be built. During

the 1990, the internet was opened for commercial use, it was also the period that the users

started to participate in World Wide Web (www), and the phenomenon of raid personal

computer usage growth. Due to the rapid expansion of the www network, e-business

software, and the peer business completions, large no of dot-coms and internet starts-ups

appeared integrated with the commercialization of the internet, web invention and pc

networks, these three important factors made e commerce possible and successful.

INTRODUCTION TO E-COMMERCE

E-Commerce, also known as Electronic Commerce, is the buying and selling of products

and services over the Internet by either business-to-business, business to consumer, or

consumer-to-consumer. E-commerce is much like traditional commerce, there is an

exchange of goods, but it conducted online and uses technologies such as electronic data

interchange, email, electronic fund transfers or smart cards to receive payment and keep

track of transactions.

The bulk of e-commerce transactions were retail transaction at the close of the 20th century

but as security and encryption technology over the Internet improved. The growth of

transactions over the Internet increased. The explosive growth in e-commerce is largely

due to the expansion of the Internet in the late 1990s. E-commerce transactions grew from

$11.2 billion in 1998 to $31.2 billion in 1999, and in the year 2003, the transactions are
predicted to grow to $380 billion. Business-to-business commerce became one of the

fastest growing segments of e-commerce. Soon, companies like eBay created a new aspect

of e-commerce: the consumer-to-consumer transaction.

To many people the term Ecommerce or Electronic Commerce means shopping on a part

of the Internet known as the World Wide Web which is true but there are twB2C and B2B

Ecommerce key elements that are always forgotten when Ecommerce is talked about. The

two elements that go along with Ecommerce are, Business-to Business Ecommerce and

Business-to Consumer Ecommerce. These two elements are very important on

understanding how Ecommerce works in the real world. The first key element in

Ecommerce is Business-to Business Ecommerce or in short terms B2B Ecommerce. B2B

Ecommerce is when online businesses buy supplies or materials from one another. For

example if there was an online company that sold radios the company might have to buy

materials for their radio such as speakers or other materials that are needed to make the

radio. These kinds of purchases are called B2B because the purchases or transactions are

made between two online businesses. The other key element in Online Ecommerce is called

Business-to-Consumer Ecommerce or for short B2C Ecommerce. B2C Ecommerce is

when a customer buys something on the Web from an online company. For example,

Ebay.com is a great form of B2C because people are buying things directly from that

company. To sum it up, any kind of website that is selling anything to people besides the

people from other companies is known as B2C.

HISTORY OF E-COMMERCE
The meaning of the term "electronic commerce" has changed over the last 30 years.

Originally, "electronic commerce" meant the facilitation of commercial transactions

electronically, usually using technology like Electronic Data Interchange (EDI) and

Electronic Funds Transfer (EFT), where both were introduced in the late 1970s, for

example, to send commercial documents like purchase orders or invoices electronically.

The 'electronic' or 'e' in e-commerce refers to the technology/systems; the 'commerce' refers

to traditional business models. E-commerce is the complete set of processes that support

commercial business activities on a network. In the 1970s and 1980s, this would also have

involved information analysis. The growth and acceptance of credit cards, automated teller

machines (ATM) and telephone banking in the 1980s were also forms of e-commerce.

However, from the 1990s onwards, this would include enterprise resource planning

systems (ERP), data mining and data warehousing. Perhaps the earliest example of many-

to-many electronic commerce in physical goods was the Boston Computer Exchange, a

marketplace for used computers, launched in 1982. The first online information

marketplace, including online consulting, was likely the American Information Exchange,

another pre-Internet online system, introduced in 1991.

In the dot com era, it came to include activities more precisely termed "Web commerce" -

- the purchase of goods and services over the World Wide Web, usually with secure

connections (HTTPS, a special server protocol that encrypts confidential ordering data for

customer protection) with e-shopping carts and with electronic payment services, like

credit card payment authorizations.

Today, it encompasses a very wide range of business activities and processes, from e-

banking to offshore manufacturing to e-logistics. The ever growing dependence of modern

industries on electronically enabled business processes gave impetus to the growth and

development of supporting systems, including backend systems, applications and

middleware. Examples are broadband and fibre-optic networks, supply-chain management

software, customer relationship management software, inventory control systems and

financial accounting software.

When the Web first became well-known among the general public in 1994, many

journalists and pundits forecast that e-commerce would soon become a major economic

sector. However, it took about four years for security protocols (like HTTPS) to become

sufficiently developed and widely deployed. Subsequently, between 1998 and 2000, a

substantial number of businesses in the United States and Western Europe developed

rudimentary web sites.

Although a large number of "pure e-commerce" companies disappeared during the dot-

com collapse in 2000 and 2001, many "brick-and-mortar" retailers recognized that such

companies had identified valuable niche markets and began to add e-commerce capabilities

to their Web sites. For example, after the collapse of online grocer Web van, two traditional

supermarket chains, Albertsons and Safeway, both started e-commerce subsidiaries

through which consumers could order groceries online.

The emergence of e-commerce also significantly lowered barriers to entry in the selling of

many types of goods; accordingly many small home-based proprietors are able to use the

internet to sell goods. Often, small sellers use online auction sites such as eBay, or sell via
large corporate websites like Amazon.com, in order to take advantage of the exposure and

setup convenience of such sites.

PRESENT SCENARIO OF E-COMMERCE

The ready acceptance of e-commerce by customers, organizations and the society as a

whole in recent times can only mean the suitability of electronic commerce in performing

business. The earlier concerns about security regarding credit card payments, accessibility

and credibility have eased out gradually with the development of Internet and security

protocols like HTTPs in the 1990s. Though e-commerce faced a crisis situation with the

dot-com bust of 2000, with maturity e-commerce has come of age in recent years.

From the earlier electronic data interchange (EDI) and electronic funds transfer (EFT), e-

commerce has encompassed different activities and processes like enterprise resource

planning systems, data warehousing, data mining, e-logistics, e-banking, offshore

manufacturing and alike in recent years. In the last couple of years, e-commerce has

developed rapidly with a sort of evolution unparalleled in the electronic world. This

happens through the entry of multinationals (MNCs) and transnational (TNCs) who have

established regional data centres, regional shared service centres and regional call centres

as a part of their long term corporate strategy.

Now, an emerging trend in the e-commerce field among businesses is to get their business

on the web. Business houses whether big or small now offer various products and services

through the Internet, electronically. This provides fast and efficient service to customers,
which ultimately leads to competitive advantage. Such a competitive advantage is

beneficial to gain a foothold in global marketplace. Major companies and retailers now

offer their products on line.

E-commerce also has been making a quiet but big change by deviating from the 'make and

sell' format to 'sense and respond' format. In the 'sense and respond' format, a manufacturer

senses the needs of its customers and responds quickly to meet those needs. This format

has been introduced by Dell Computer Inc. Dell sells its computers directly on-line, after

making the computer meet exactly all your needs. It is customized to meet what you want.

It makes the company sensitive to meet customer needs. Speed becomes the driving factor

in this era of Internet.

The future of e-commerce is nothing but bright. E-commerce with the help of Internet can

reshape the way people do business. The following are some of the buzzwords going

around as a part of future e-commerce:

Digital or electronic cash: Under digital cash or e-cash, a person will be able to pay for the

goods he buys by simply transmitting a number from a system to another. The number will

be issued by a bank and would be meant for specific sums of money.

Disintermediation: This is a process of giving the middleman cold shoulders by dealing

directly with the consumers.

Electronic Checks: Through electronic checking systems such as Pay Now, utility and

phone bills are paid by taking money from user's checking accounts.
Extranet: Under it, the internal network of a company will be connected with the internal

networks of its customers and suppliers. This way, e-commerce applications linking all the

aspects of the business will be connected.

RELATED AREAS OF E-BUSINESS

Through internet and internets, e-business is realizing the opportunities of improved

connectivity both externally and internally. The external dimension is about

transformation of the value chain, linking the tourism supplier to the customer, and the

supply chain, linking the industrial supplier with its own suppliers. This brings in e-

marketing, e-commerce and e-procurement.

E-Marketing: E-Marketing exploits the internet and other forms of electronic

communication to communicate in the most cost-effective ways with target markets and to

enable joint working with partner organizations, with which there is a common interest.

E-Commerce: E-Commerce is the sales activity undertaken through electronic distribution.

It is the use of telecommunications and data processing technology to improve the quality

of transactions between business partners. It has existed in some form since the invention

of the telegraph and early-automated data processing equipment, but its use has greatly

increased. E-Commerce improves organizational efficiencies by leveraging data

processing, database storage, and data communications technologies.

E-Procurement: E-Procurement streamlines the purchasing process by allowing a business

to tie its inventory and procurement systems into the dispatch and billing systems of its

suppliers and the vice versa. Not only does this reduce costs through automation, it also

facilitates identification of best value sources of supply.

E-Business and E-Commerce: E-Business and E-Commerce are two different things. E-

commerce generally means transacting over the internet. Buying and selling or trading

through the online medium. The means of e-Business is a lot broader than just trading or

transacting over the internet. E-Business would have an automated interface to help the

sellers navigate through their website easily, an online customer support if the seller stuck

along the way, and even a loyalty program to enhance customer relationships. E-Business

is having an almost fully automated online business presence where as e-commerce is

performing transactions online.

Existing network facilities can be utilized to achieve great savings in labour costs and the

reduction of paper storage and handling facilities. It has enabled firms to be more effective

in improving the quality of standard goods and services and to offer a variety of new

services. The global market place has become larger and wider than ever because of the

expansion of e-commerce activity. The growth of electronic commerce has been fuelled

by the availability of worldwide telecommunication networks along with enhanced

information delivery techniques utilizing the various multimedia technologies, client server
architecture, allows systems with different hardware and software platforms to interact in

an open system computing environment.

OTHER AREAS OF E-BUSINESS APPLICATION

E-Auctioning: The internet makes auctions more dramatic slowing everyone with an

internet connection to bid for an item offered. Anyone can go to auction website with a

click in which the server is located physically.

E-Banking: E-banking mean that any enquiry or transaction which should be processed

online without any reference to branch at any time. E-banking allows customers to access

accounts and execute orders through website. The quality range and price of these

electronic services decide a bank’s competitive position in the industry.

E-Directories: E-Directories help to find a particular service or product through the

Internet.

E-Franchising: Franchising has become much easier on the Internet. Moving digital

products, processes and brands is extremely easy. The advantage of this system is that

there is no distribution cost involved.

E-Governance: It may be defined as delivery of government services and information to

the public using electronic means. Such means of delivery information is often referred to

as information technology. Use of IT in government facilitates an efficient, speedy and

transparent process for disseminating information to the public and other agencies and for

performing government administration activities.

E-Learning: E-Learning also called internet based training (IST) offers a new dimension

in digital learning. It is used for explaining and testing a subject the material is presented

online.

E-Mailing: E-Mailing enables instant communication through the internet. Organization

communicates to its actual and potential customers mainly through e-mails.

E-Operation Research Management: Operation research management allows companies to

manage operations resources more strategically by using internet. Better communication

between the buyers and suppliers can help in effectively using the infrastructure of the

enterprise.

E-Trading: Trading also called E-brokering offers the real time stock prices to every desk

throughout the world. People are able to react in real term to changes in stock market.

This enables anyone to participate in stock market and earn money by investment.
E-Payment Systems: E-Payment systems are becoming Central to e-commerce as

companies look for ways to serve customers faster and at lower cost.

CHAPTER III
 E-BUSINESS IN THE INDUSTRY

E-Trading

E-Trading is the buying and selling of securities, stocks & funds electronically. This

process involves an extensive communication network and infrastructure for clearing

transactions - but the savings over the traditional stock brokers can be substantial. It is

estimated that 40% of trades executed by individuals today are executed electronically,

through an online broker. The phenomenal increase in popularity of electronic trading in

the business community is largely because of the availability of strong encryption that can

guarantee the security of a trade.

Traditionally, stock brokers have been known for their 'full service' account

management. This would often include personalized service, with individual risk

management, liberal financial advice but with a substantial commission charged on every

trade. Discount brokers are known for their practice of charging a flat rate for each trade

made. The Internet helped transform ordinary discount brokers into 'electronic brokerages'

by allowing a person anywhere in the world to place orders online

AN OVERVIEW OF ON-LINE TRADING

Internet can be used as an Order Routing System for communicating client’s orders to the

exchange through the brokers. It enables investors to place orders with his brokers and have

control over the information and quotes and to hit the quote on on-line basis. Once the

brokers system receives the order, it checks the authenticity of the clients electronically

and then route the order to the appropriate exchange for execution. On execution of the

order it is confirmed on a real time basis. Investor receives report on margin requirements,

payments and delivery obligations through the system. His ledger and portfolio accounts

get updated on-line.

The Internet is a source of cost-effective information about a host of goods and services.

The Internet provides low-cost information facilitating trade. The seller wants to provide

information because he wants a sale and the purchaser wants the information because he

wants to buy.

The benefits of an online broker compared to an offline one

a. Cost: Internet services tend to cost less comparable off-line services with the lower costs

being passed to the customer, in the form of lower commissions and margin rates and

competitive rates of interest on credit balances.

b. Convenience: One can enter an order at anytime night or day and so suit his/her own

timetable.

c. Quick Confirmation: Trade is usually confirmed electronically, saving the time to hang

around on the phone, or call back busy brokers.