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Strategic Issues For A Successful E-Commerce

Electronic Commerce is for the age of Information

Technology what mercantilism, the quest for gold

and the conquest of new lands were for the age of

discovery. Like the prow of a large fishing boat,

it draws towards itself all other interests and

elements of society, and it will leave new

discoveries and changes in its wake. The vast

networking of world through optic fibers,

satellites and wireless communication is creating

a new global community and a new global market, in

which most of the countries should participate. It

is strengthening, almost paradoxically, the

identity of small groups, isolated communities and

minority interests and driving them towards a less

costly social and economic activity and widening

their opportunities. And most importantly, it is

empowering small businesses to compete with

multinational corporations and enabling consumers

to search the world for exactly what they needed.

E-Commerce basically means using networks

(Internet) to carry out all the activities

involved in business management and operation:

buying and selling of products and services,

technology and partner search, dealing with

counterparts, choosing the most convenient

transportation and insurances, performing bank

transactions, paying and billing, communicating

with company salesmen, picking up orders, and any

other activities necessary for trading.

A company will be able to post a complete catalog

of it’s products and services on the Internet,

which can be continuously updated to present new

or updated products, proving a large virtual

showcase for potential clients, a means to

communicate with clients and in that way, adjusts

it’s offer to their requirements; while at the

same time it will get access to virtual markets

where it can purchase what it needs.

Through integral systems already under

development, one company will connect to other

companies located anywhere in the world, to buy

and sell, choosing the products and services which

best meets its needs from a huge network. And it’s

true that this revolution involves us all.

BUSINESS-TO-BUSINESS (B2B)
B2B e-commerce means companies buying from and

selling to each other online. It automates and

streamlines the process of buying and selling the

intermediate products. It provides more reliable

updating of business data. B2B makes product

information available globally and updates it in

real time. Hence, procuring organization can take

advantage of vast amount of product information.

[3]

Now, we must know what are the entities of B2B

e-commerce & their concerns:

* Selling company: with marketing management

perspective.
* Buying company: with procurement management

perspective.
* Electronic intermediary: A third party

intermediating service provider (the scope of

service may be extended to include the order

fulfillment ).
* Deliverer: who should fulfill the JIT (Just

in Time Delivery)
* Network platform: such as the Internet,

Intranet, and Extranet.
* Protocols and communication: such as EDI

(Electronic Data Interchange) and comparison

shopping, possibly using software agents.
* Back-end information system: possibly

implemented using the intranet and Enterprise

Resource Planning (ERP) systems.

B2B e-commerce implies that both the sellers and

buyers are business corporations. It covers a

broad spectrum of applications that enable an

enterprise or business to form electronic

relationship with their distributors, re-sellers,

suppliers, and other partners. B2B applications

will offer enterprises access to the following

sorts of information :

1. Product: Specifications, prices, sales

history.
2. Customer: Sales history and forecasts.
3. Supplier: Product lines and lead times,

sales terms and conditions.
4. Product process: Capacities, commitments,

product plans.
5. Transportation: Carries, lead-times, costs.
6. Inventory: Inventory levels, carrying costs,

locations.
7. Supply chain alliance: Key contacts,

partners roles and responsibilities, schedules.
8. Competitor: Benchmarking, competitive

product offering, market share.
9. Sales and marketing: Point of sales (POS),

promotions.
10. Supply chain process and performance:

Process descriptions, performance measures,

quality, delivery time and customer satisfaction.

How to get the best

People always want to get the best shot in life.

To deliver a sound return on your investment you

must add on time delivery and flavor of some

strategies. This strategy should include proper

marketing, channel management, solid technology,

strategic partners and great products. Let us have

a look on each of them.

Just in Time delivery (JIT)

In such a case (JIT), delivery materials and parts

on time is a must. Using E-Commerce, it is highly

possible to assure JIT deliveries. Just in time

delivery can be realized by the co-coordinated

effort of delivery- service company and suppliers

inventory policy.

Quick delivery does not necessarily mean JIT

delivery, but the system for quick delivery is the

backbone of JIT delivery. For the B2B E-Commerce

environment the advance confirmation of the

delivery date at the contract stage is very

important.

Add strategies to your business

Direct Marketing

In a typical business organization, buying

decisions, especially for products over a few

thousand dollars, are made by group of

individuals. As a result, direct marketers need to

extent the reach of their programs to different

functional areas and perhaps even different levels

within a functional area.

There are multiple buyers and influences in any

organization who play a role in the buying

decision. You may know with reasonable certainty

who your primary target is, but secondary target

can be just as important to reach. You may have to

reach business buyers and influencers in three

basic management areas (functional management,

financial management and general management) and

do it at middle to upper managerial, as well as

technical levels. To do it companies need accurate

E-mail list, which they can develop by viewing

companies Websites and reviewing annual reports

and other public documents.

Relationship Marketing

Business buyers are not always ready to buy

products or services when you are ready to sell

them. Factors you cannot control, such as the

companies’ budgeting process, the need for

additional approvals, or purchasing procedures,

may have a direct impact on plans to purchase.

There may be a casual interest in the product but

not an immediate need.

The smart B2B direct marketer compensates for this

uncertainty by making sure a program of regular,

ongoing communications is in front of prospects

periodically. This can be done by direct E-mail

and by placing the information on the website.

Internet Marketing

Several potential marketing strategies can be used

in B2B E-Commerce marketing. These strategies can

be classified into the following five categories:

1. Generating and qualifying leads with the

Internet.
2. Using Internet events to promote products

and services.
3. Executing instant fulfillment on the

Internet.
4. Generating orders through the Internet.
5. Enhancing customer relationship with the

Internet.

Channel Management

The first element is coherent marketing or channel

management. The true test of a successful

E-Commerce implementation is how well it exploits

the Internet to reach, capture and retain the

right customers. Choosing which products and

services will be offered through which channel is

also a crucial decision.

E-commerce runs across multiple sales channels,

including direct, indirect and E-marketplaces. The

choice of which marketplaces to use as sales

channels is a crucial decision.

In addition to marketplaces, using indirect sales

channels is also an area for explosive sales

opportunities. Enabling your selling partners to

host your catalog, inventory and fulfillment

databases on their systems can create efficiency

that grows their business and yours. You also can

continue your direct one-to-one trading

relationship with long time strategic vendors by

“E-enabling” the entire business process from the

initial request for quote through order

fulfillment to automatic billing and payment.

These channels create a situation where the

E-Commerce sell side platform must transact across

multi-channel selling strategies --which brings us

to the next element of your strategy: technology.

Technology

Industry standard tools often allow a seller to

build and manage product catalogs and content once

and use them throughout the entire multi-channel

selling conduits. Evolving tools and capabilities

allow you to develop customer friendly web sites

and win repeat customers by building customer

loyalty. The front end for e-commerce selling is

an important piece of B2B success, connecting your

new web systems with your existing systems. The

24*7 online marketplace means your E-business has

to be continually available. IT infrastructure

must provide more performance, reliability,

security and process integration than a

bricks-and-mortar environment. In addition,

mainframes hosting the databases and ERP

(Enterprise Resource Planning) systems operating

the management systems must be seamlessly

integrated with the e-commerce engine to provide

the caliber of service customers expects and to

realize the cost efficiencies B2B E-Commerce can

provide. Choosing a flexible E-Commerce platforms

and a system integrator experienced with the

entire business process is a must for success.

Partners

Like choosing the Internet as a sales channel,

it’s also important to select the right partners,

including an integration partner who is

experienced in helping to move ahead rapidly

across the entire E-business process. we have to

accept that any move to E-Commerce is not about

incremental improvement, rather fundamental

redesign of the key business processes.

Products

With the presence on the web, we can effectively

and efficiently transact business with our clients

24*7. But so can our competitors. Survivals and

success in E-Commerce entails more than simply

building a storefront to sell online.

BUSINESS-TO-CONSUMER (B2C)

While the term E-Commerce refers to all online

transactions, B2C stands for

"Business-to-Consumer" and applies to any business

or organization that sells its products or

services to consumers over the Internet for their

own use.

In the late 90s, dotcoms— which were quickly

gaining in size and market capitalization — posed

a threat to traditional brick and mortar

businesses. In many ways, these dotcoms seemed to

be rewriting the rules of business — they had the

customers without the expenses of maintaining

physical stores, little inventory, unlimited

access to capital and little concern about actual

earnings. The idea was to get big fast and worry

about profits later. And a popular thought

automatically comes into our mind: “ Learn to swim

while the tide is out. Learn from the kinds of

customers that are out there now. It is a small

market- play with it; learn to price business in

this market, learn how to assess risk. If you can

do it well, the stakes will get higher and you

will succeed where others may not.”

What are the major challenges of B2C e-commerce

* Getting browsers to buy things — Your

E-Commerce site cannot live on traffic alone.

Getting visitors to the site is only half the

battle. Whether they buy something is what

determines if you win.

Some ways to boost the B2C conversion rate

include improving navigation, simplifying checkout

process (such as one-step checkout and easily

replaced passwords), and sending out e-mails with

special offers.
* Building customer loyalty — With so many

sites out there, how can you build a strong

relationship with customers? Here are some tips:
1. Focus on personalization: A wide array

of software packages are available to help

e-commerce sites create unique boutiques that

target specific customers.
2. Create an easy-to-use customer service

application. Providing just an e-mail address can

be frustrating to customers with questions. Live

chat or, at the very least, a phone number will

help.
3. Focus on making your site easy to use.
* Fulfillment — E-Commerce has increased the

focus on customer satisfaction and delivery

fulfillment. Companies should improve their

logistical systems in order to guarantee on-time

delivery. Providing instant gratification for

customers still isn't easy, but successful B2C

E-Commerce operations are finding that fulfillment

headaches can be eased with increased focus and

investment in supply chain and logistical

technologies.

Six Keys to B2C E-Commerce success

So, what does it really take to capture the

E-consumer and generate online insurance sales?

Based on Insurance & Technology's interviews with

both early adopters and industry analysts, there

appear to be six key success factors:

1. Strategic Goals Assessment/Customer Needs

Assessment What are your goals as a company? Who

are your customers? What are their needs? These

may sound like basic questions, but both insurers

and analysts emphasize that a company's Web

presence must reflect this information.

2. Create a Usable, Targeted and Sticky Web

Site

Usability and site performance are some of

the key factors insurers need to keep in mind when

developing their B2C E-Commerce strategies.

Insurers also need to be aware of all of their

various constituencies when developing B2C

initiatives. The Web can reach multiple audiences

and none should be overlooked. A good Web site

will communicate with consumers as well as

business partners, agents, suppliers and vendors.

Stickiness, or the success of a Web site in

attracting and keeping new and returning visitors,

is another success factor. Turning the site into

more of an information portal with real-time news

feeds with keeping content updated and

synchronized will help keep customers coming back.

3. Integration

The Internet is not a stand-alone platform

or medium. To be an effective service and

distribution channel, it must be integrated with

back-end legacy systems, agent systems, call

centers, marketing initiatives and pricing and

underwriting systems. The Internet is simply

another customer relationship channel and

integration with other customer service functions

is definitely a number-one priority.

4. Innovate with Web Applications and Real-Time

Transactions

B2C online applications range from the

relatively basic, such as updating policy

information, to the complex, such as comparative

rate quoting and electronic claims submission.

Regardless of the specific functions a company

plans to add to its Web site, they must serve the

needs of the E-consumer. This means that web sites

should have interactivity and immediate

gratification.

5. Partnerships

Although insurers need to be selective in

initiating online partnerships, such agreements

have the potential to extend market reach and add

features in a relatively low-cost manner.

According to a recent Gartner Group study, 46

percent of insurance firms active on the Web have

partnerships with banks, 30 percent have

partnerships with other insurance companies and 22

percent have partnerships with investment firms.

Partnerships with insurance portals provide

comparative quoting capabilities and may generate

business.

6. Put Tools in Place To Keep Learning

E-consumer is a moving target. Investor

should always say that they are still playing and

always capturing information from all of their

channels. They must focus on groups, used

third-party assessments and have hired user

interface specialists. "The process is iterative:

You just keep learning."

INFRASTRUCTURE INTEGRATION

In this web enabled world, customers rule. The

ability to offer mass customization has become a

practical reality. To rapidly meet these

requirements, time to deployment of new or

enhanced application is shrinking dramatically.

These applications must be built to be easy to

use, nimble, open, extensible, and available

across all platforms and all these demanding

characteristics must be achieved at minimal cost.

Replacement of legacy system application is costly

so it is seen that people started to aggregate

information from disparate sources and integrate

them for seamless information flow, the demand to

communicate with a wide variety of mobile devices,

and the shortage of skills and knowledge that are

further compounded by shrinking time-to-deployment

requirements.

These software integration technologies lower

development and deployment costs by doing the

following:

* Supplying the communication and integration

code so application developers can concentrate on

the value-added business logic;
* Providing a standard platform on which to

build, deploy, and manage distributed

applications;
* Reducing the IT skills required to deliver

difficult enterprise requirements;
* Providing rapid application development

tools to eliminate custom coding and simplify

integration; and
* Enabling the reuse of integration components

over many projects.

What is needed for Integration?

1. Requirements

Traditional requirements definition based on

the functionality desired is yielding to a

definition Based on time-to-deployment and the

ability to integrate future technologies. New

infrastructure requirements are emerging which

places more importance on the task of planning the

migration path to newer technologies.

2. Technology selection

For the best result the right technology

should always be picked up. Technology should be

such that the integrated solution fulfill the

following criteria’s: Extensibility and

reusability, Flexibility, Efficiency,

Interoperability and breadth, Cost effectiveness,

Ease of maintenance, Deployment ease and

efficiency, Ease of administration, Industry

acceptability, Enterprise integration,

Technological innovation.

Benefits of Integration

It has been surveyed that the end users are benefited in various ways after the completion of

Integration project. Benefits thus obtained are :

1. Simple and complete development platform,
2. Platform independence,
3. Network-aware development and run-time platform,
4. Technologically unified intranet, extranet and Internet,
5. Central administration of new software versions,
6. Easy access to enterprise IT resources,
7. Rich and highly functional user interface component,
8. Simple and robust security model.

SECURITY ISSUES

Security is a major issue in developing E-Commerce because this is probably the most important reason people hesitates to buy things on the Net. Buying on the Net requires your credit card number and other personal information. But broadcasting your credit card number through the ether? It sounds pretty dicey. So, it’s a challenge for companies to make their site secure and safe so that people can fully rely on them.

5.1 What does security imply

Whatever the environment, paper or electronic, securing it necessarily implies the prevention of

* Destruction of information and
* Unauthorized availability of information.

5.2 Security issues

The issues that confront us in relation to securing electronic transaction are therefore:

* Confidentiality
* Integrity
* Availability
* Authenticity/Non-reputability
* Auditability

Confidentiality:

Information should be protected from prying eyes of unauthorized internal users, external hackers and from being intercepted during transmission on communication networks by making it unintelligible to the attacker. The content should be transformed in such a way that it is not decipherable by anyone who does not know the transformation information.

Integrity:

On retrieval or receipt at the other end of a communication network the information should appear exactly as was stored are sent. It should be possible to generate an alert on any modification, addition or deletion to the original content. Integrity also precludes information “replay” i.e., a fresh copy of the data is generated or resent using the authorization features of the earlier authentic message. Suitable mechanisms are required to ensure end-to end message content and copy authentication.

Availability:

The information that is being stored or transmitted across communication networks should be available whenever required and to whatever extent as desired within pre-established time constraints. Network errors, power outages, operational errors, application software errors, hardware problems and viruses are some of the causes of unavailability of information. The mechanisms for implementation of counter measures to these threats are available but are beyond the scope of end-to-end message security for implementing Electronic Commerce.

Authenticity:

It should be possible any person or object from masquerading as some other person or object. When a message is received it should therefore be possible to verify it has indeed been sent by the person or object claiming to be the originator. Similarly, it should also be possible to ensure that the message is sent to the person or object for whom it is meant. This implies the need for reliable identification of the originator and recipient of data.

Non-reputability:

After sending / authorizing a message, the sender should not be able to, at a later date, deny having done so. Similarly the recipient of a message should not be able to deny receipt at a later date. It should, therefore be possible to bind message acknowledgements with their originations.

Security solutions

* Cryptography is the most widely used technique for implementing technology solution for the above mentioned security problems. It comprises encryption -- the process of making information unintelligible to the unauthorized reader and decryption – reserving encryption to make the information readable once again. Conventional cryptography uses a secret code or key to encrypt information. The same secret key is used by the receiver to decrypt the information.[14]

* Password is the most common mechanism used for authenticate people. Passwords are expected to be known only by the owner. The onus is on the owner to keep the password secret.

* Digital signature can be used not only to verify the authenticity of the message and the claimed identity of the sender, but also to verify the message integrity. The recipient, however, should not be able to use the received digital signature to falsely “sign” messages on behalf of the original sender. Here a message is encrypted with the sender’s private key to generate the ‘signature’. The message is then sent to the destination along with this signature. The recipient decrypts the signature using the sender’s public key, and if the result matches with the copy of the message received, the recipient can be sure that the message was sent by the claimed originator and that the message has not been modified during transmission, since only the originator is in possession of the corresponding encryption key. It is a two key cryptosystems.

* A more effective solution can be obtained by using a biometric authentication device, such as a fingerprint scanner, in the e-wallet.

* Smart card are similar to credit cards except that they have chips embedded in them. These cards can be used to store value and carry authentication information.

CONCLUSION

Changing market scenario puts pressure on business persons to adapt new and smart strategies to reach the pinnacle of success. New inventions are rapidly becoming part of IT infrastructure. But to get effective feedback we need a multi functional team approach consisting of business people who can correctly identify business requirements, technology requirements and success criteria. People can reduce the risk and time-to-deployment by considering the factors described above.