E-COMMERCE

Chapter 6

E-commerce and E-
business
 INTRODUCTION
Ø E-commerce (electronic commerce) is the activity of electronically buying or selling of products on
online services or over the Internet.

Ø E-commerce typically uses the web for at least a part of a transaction's life cycle although it may
also use other technologies such as e-mail.

Ø Typical e-commerce transactions include the purchase of products (such as books from Amazon) or
services (such as music downloads in the form of digital distribution such as iTunes Store).

Ø There are three areas of e-commerce: online retailing, electronic markets, and online auctions.

Ø E-commerce is supported by electronic business

 E COMMERCE BUSINESS:
E-commerce businesses may also employ some or all of the following:
❖ Online shopping for retail sales direct to consumers via web sites and mobile apps, and
conversational commerce via live chat, chatbots, and voice assistants;
❖ Providing or participating in online marketplaces, which process third-party business-to-consumer (B2C) or
consumer-to-consumer (C2C) sales;
❖ Business-to-business (B2B) buying and selling;
❖ Gathering and using demographic data through web contacts and social media;
❖ B2B electronic data interchange;
❖ Marketing to prospective and established customers by e-mail or fax (for example, with newsletters);
❖ Engaging in pretail for launching new products and services;
❖ Online financial exchanges for currency exchanges or trading purposes.
 E COMMERCE CATEGORIES
Ø Electronic Markets/ Online Retailing
● Presents 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.
● Example: Airline Booking System

Ø Electronic Data Interchange (EDI) / Electronic Market

● It provides a standardized system
● Coding trade transactions
● 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 a make a large no. of regular transactions
● Example: EDI is used in the large market chains for transactions with their suppliers

Ø Internet Commerce/ Online Auctions

● It is use to advertise & make sales of wide range of goods & services.
● This application is for both business to business & business to consumer transactions
 ERP & E COMMERCE
Ø To understand how an ERP and eCommerce integration works, we must first start with eCommerce logistics, which
includes taking and fulfilling orders, processing payments, handling returns, managing inventory, ensuring security,
calculating taxes, tracking financials, and providing customer support. These become harder to juggle when small operation
morphs into a full-fledged operation with a warehouse—or two, or three—a shipping fleet, and multiple employees.

Ø Relying on systems that have been cobbled together, making them function by sheer determination and willpower, will no
longer work. Everyone will suffer from a lack of data, consistency, and control. Hence, we can integrate eCommerce
software solutions with a modern ERP, automating your current procedures and processes making it more efficient, and
successfully avoiding additional data challenges in the future.

Ø There are a few ways to integrate ERP & e-commerce firstly, we can utilize the eCommerce solution’ API on our own,
which gives us complete customization, but it also leaves us completely responsible for managing the integration or we can
utilize a third-party solution with a pre-built integration using the API, which is relatively easy to work with.
ERP FEATURES IMPORTANT FOR E COMMERCE BUSINESS

Ø Finance
Though, general ledger (GL), accounts payable (AP), and accounts receivable (AR) can be managed through QuickBooks, a
cloud ERP solution allows us to manage those tasks while also supplying real-time eCommerce updates. For example, when
an eCommerce site sale comes into your ERP solution, it immediately shows up in the sales order and is populated
throughout your financial statements. As soon as the payment goes through, it’s seen as revenue. With an ERP system,
documentation is set in stone, and the information is 100% accurate.

Ø CRM (Customer Relationship Management)

CRM within ERP that integrates with the eCommerce solution is a win-win-win situation. A successful eCommerce business
has an effective, standardized way to manage leads, contacts, opportunities, and customer accounts as well as the ability to
know what’s happening during each step of the sales cycle. In other words, one needs a seamlessly integrated CRM solution,
which gives every department access to real-time, synchronized data from a single source.
 ERP FEATURES IMPORTANT FOR E COMMERCE BUSINESS
Ø Inventory Management
When business is booming, tracking inventory becomes more complicated. We need to know where our products are located, and the
customers wants to know if the product is in stock. An integrated ERP solution is smart enough to communicate this information to
everyone. It offers accurate, real-time access to available inventory, whether the inventory is located in a warehouse, split between
warehouses, or in transit. You’re also privy to reorder quantities and inventory costs.

Ø Shipping, Distribution & Warehouse Management

As with inventory management, an integrated ecommerce ERP solution is the most accurate and efficient method for managing our
shipping, distribution, and warehouse management needs. The distribution process is multifaceted, including wave and batch picking,
packaging, PO receiving, putting away, transferring, and physical counting. With ERP, these tasks become automated.

Ø Product Information Management

Because one sells products to customers in different ways, centralizing ones product information within an eCommerce ERP solution is
critical. This information could be about the vendors, product pricing, and customer-specific pricing, or perhaps options associated with
the product. Managing information in one location allows us to push that information out to many locations.
ADVANTAGES
Ø Better online experiences OF
INTEGRATING E-
The better online experience for customers comes from the improved level of customer engagement. For example, the ERP
COMMERCE & and can notify customers when the manufacturing process begins, when the product is
solution manages your fulfillment
ERP
boxed up, and when the item is shipped out.

Ø Pricing Management

Pricing management, like product information management, is the ability to manage our product pricing within ERP. One can
customize response to different customers. For example, in B2B, if customer number one has negotiated rates and customer
number two, a new customer, has not, you can push the correct information out to the ecommerce platform accordingly.
Ø Access to valuable data
Will have access to valuable data being pulled in real time from the eCommerce site where the information has
been stored as customers engage with website. This data is used for actionable reporting and forecasting.

Ø Process visibility
This leads to process visibility. Simply put, one can generate reports that shows how your company, sales,
returns, and inventory are doing, also can see who is doing what and assess the profitability of your business.

Ø Increased productivity
Finally, increased productivity results when every employee uses the ERP system as the centralized system of
record. Automating their tasks, such as automatically tracking inventory deductions during fulfillment or
generating an automated process for a purchase order request, increases productivity even further.
Ø Ecommerce ERP may be used to grow eCommerce business.

Ø The integration of eCommerce system with a modern, cloud-based ERP solution allows
us to connect the processes, procedures, and data, producing an efficient, profitable

business..
 Enterprise resource planning
the E-business Backbone Enterprise architecture,
Planning
 Risks with ERP Implementation

1. It is Expensive

2. Time consuming

3. Transfer of Knowledge

4. Acceptance with the company

 E- business
● E-Business is, in its simplest form, the conduct of business on the Internet. It is a more generic term than
E-Commerce because it refers to not only buying and selling but also servicing customers and
collaborating with business partners.
● E-business, in addition to encompassing e-commerce, includes both front and back office applications that
form the engine for modern business. E-business is not just about e-commerce transactions; it's about re-
defining old business models, with the aid of technology, to maximize customer value.
● E-business uses technologies like enterprise resource planning (ERP) systems, supply chain management
(SCM), customer relationship management (CRM), data warehousing, data marts, data mining, online
analytical processing (OLAP), geographical information systems (GIS), etc. to conduct business on the
Internet at `Internet speed'.
● It is technology and innovative and new business processes that are making the conduct of business at
'Internet speed' possible.
 ERP: The Technological Backbone of E-business

● ERP gained visibility in the mid-1990s and was still being developed into the mid-2000s. Back then, it was
primarily in the province of large manufacturers, mostly because those early systems were expensive
(costing upwards of $2 million) and could take as long as four years to implement.
● Fast forward to 2020, where the global ERP software market is expected to be worth more than $40
billion by year end, and could reach a mind-boggling $70 billion by 2025. But as remarkable as those
numbers are, there are still manufacturers who don’t yet understand why ERP is so critical for their
operations.
● As globalization continues to pressure the market for many industries, process manufacturers, in
particular, must consider any tool that can give their business a competitive advantage. ERP can do just
that in the following ways -
 ERP: The Technological Backbone of E-business

1. ERP saves manufacturers money through integration.

2. ERP improves and enables collaboration.
3. ERP offers real-time analytics and insights.
4. ERP enables higher productivity across an organization.
5. ERP gives companies greater control over inventory.
6. ERP empowers workforces.
 ERP: The Technological Backbone of E-business

● Business enterprises in India are in the process of a major transformation due to globalization and the
deregulation of Indian economy
● Most of the enterprises in India, are in the process of implementing ERP system in alignment with organizational
transformation and process of re-engineering initiatives.
● ERP system promise benefits that range from increased efficiency to transformation of quality, productivity and
profitability.
● ERP implementation poses some unexpected organizational challenges and changes that can be structural as well
as cultural in nature.
● ERP not only helps establish world-class best business practices and brings transparency to the organization but
also demands for empowerment and flexibility in decision making process.
● The most promising argument is that, to thrive in the e-commerce world companies need to transform their
internal business process with the deployment of ERP system.
ERP: The Technological Backbone of E-business
 Enterprise Architecture
PCs (clients), networked with server / cluster of servers, are known as Client Server platform and have the following
characteristic:

● Server hosts central database and application program.

● PC Clients, provide input, request service from server, performs display and does some processing.
● System functions are done in three logical layers.
1. Presentation layer-at client PC
2. Application layer, executing instructions from users and transferring and receiving data from
database
3. Database layer for centrally managing data. Under Server concept, server denotes either a
physical or a virtual server.
● Application program and database may be hosted in a single server or in two separate servers. For multi-location or
large systems, application program is divided in a number of networked servers which enhance speed and reliability of
the system.
 Enterprise Architecture Planning

● Enterprise architecture planning is a business strategy that aids in identifying the processes or architectures that
ultimately support the operation of a business and move the company closer to achieving its stated goals.
● The actual phases, or cycles, that are part of the basic enterprise architecture planning or EAP effort can be
segregated into four basic sections, or layers:
1. The first has to do with the phase of beginning the effort. During this phase, data is collected and organized in
some manner, with the goal of being able to qualify and use that data to establish basic structure for the
activity and determine what tools or resources will be necessary.
2. A second phase, or layer, of enterprise architecture planning has to do with evaluating the current status of the
business and how that relates to the proposed project.
3. Setting the goal or goals for the project is often considered the third phase of enterprise architecture planning.
4. The fourth layer, or phase, of enterprise architectural planning is the development of a road map to move
forward from present circumstances on to the identified goals.
• It is the B2B(Business to Business) demand management, ordering, and purchasing of products and services over the

internet.
• The CPO(Chief Procurement Officer) or procurement division of an enterprise usually has policies governing material

procurement intending to obtain a service of the maximum value at the time needed.
• E-procurement permits procurement division heads to automate observance of the policies, contracts and vendor

relationships within the system. Usually, e-procurement computerizes several procurement-related activities and removes

the need of paper-based process.

• It mainly automates several functions, procedures and policies that an enterprise uses to administer its process.
• It permits staff to handle their procurements from the selection of preferred items from the offerings that are equivalent

to the procurement office’s parameter for price and value and supplier
 Benefits of E-Procurement Process
• Cost reduction

• Better productivity

• Transparent expenditures

• Removing paperwork

• Standardized purchase

• Improved transaction speed

• Decreased errors
• E-Governance can be defined as the application of communication and information technology for providing government
services, exchange of information, transactions, integration of previously existing services and information portals.
• It makes the whole administrative process convenient, efficient, transparent, fully accountable and responsible. As a fast-
growing economy and an emerging world leader, E-Governance is a must in a country like India, both in Government and
corporate sector.

• E-governance is a wide area, covering various of governance and its duties and rights towards the citizens, government
employees, other government etc using information and businesses communication technologies.

• For example in India, each district has a collector, a carry forward and somewhat relic governance function from the legacy of
the British raj or rule.

• However, even today the collector plays an important role in management of resources like land especially in rural areas. So
logically we can design a software system relevant to the needs of a Collector and call it a collector erp.
• Some effective examples of successful implementation of E-Governance to the governmental function include projects like; e-
Mitra project(Rajasthan), e-Seva project(Andhra Pradesh), CET(Common Entrance Test).
• The four types of e-government services are:
• 1. Government-to-Citizen (G2C)
• 2. Government-to-Business (G2B)
• 3. Government-to-Employee (G2E)
• 4. Government-to-Government (G2G)

• Advantages of E-Governance
• Speed
• Saving Cost
• Transperancy
• Accountability

• Disadvantages of E-Governance
• Loss of Interpersonal Communication
• High Setup Cost
• Illiteracy
• Leakage of Personal Information
Types of E-Business
• Various factors are to be considered when developing an e-business design. They include customer
satisfaction, structure of the organization, and the ratio of in-house manufacture to outsourcing, whether
the company is function oriented or process oriented, the mode of selling, distribution of the product, etc.
• The first step in e-business design is self-diagnosis. The management of an organization should examine the
effect of changing customer tastes and preferences, the business environment, and the emerging
technology trends, on the company, and the steps should be taken to provide direction to the company so
that it can cope up with the changing environment.
• Firms should follow an outside-in approach, where the business model is worked out in such a way that
customer needs are given utmost importance. They must align the business model and process to fulfill the
customer needs. To focus creative thinking and retain leadership, companies usually use three types of
competencies.
• E-business are service excellence, operational excellence, and continuous innovation excellence.
Service excellence deals with delivering the best services to the customers and offering superior
value to them.
• Operational excellence deals with production and delivery of error or defect free products and
services at reasonable prices. Continuous innovation excellence deals with continuously increasing
the performance standards by finding new ways to do things, and developing new products and
services ahead of competitors.
• For changing a company’s business model into an e-business model, a fool proof strategy has to
be formulated. It essentially needs to have three components – knowledge building, capability
evaluation, and e-business design.
• Knowledge building includes knowing your customers and delivering according to their needs.
Capability evaluation includes a company evaluating itself to see whether it is able to serve its
customers with the existing infrastructure. After collecting all the information and analyzing it, the
organization embarks on designing the e-business model best suited for its processes.
 What is ecommerce today?
• Ecommerce is now ubiquitous to business in developed countries, but developing
countries have yet to catch up with its adoption. However, things have been coming
along as ecommerce has started to grow in a big way throughout Asia, especially in
China.
• In the meantime, mobile has pretty much become the biggest thing in ecommerce
these days. However, a lot of businesses aren’t converting to m-commerce fast
enough to make the most of the mobile user base. With the ecommerce market
becoming more competitive than ever before, this may change down the line, as
businesses continue to find new ways to gain an edge.
• There is also a future in subscription-based business models. Presently, there are
already a number of online services that offer monthly subscriptions for a variety of
things. Expect this business model to grow even more in the coming years.
 Factors in ecommerce success
1. Regulation of product pricing

2. Maintaining high quality products

3. Improving store accessibility

4. Making a wonderful first impression

5. Securing shipments

6. Taking advantage of m-commerce

E Commerce & E Business
CONTENT

A. E-commerce and E-business

B. E-Business structural transformation

C. Flexible Business Design

D. Customer Experience

E. Create New techo Enterprise

F. New generation E-business

What is E commerce?

What is E Business?

Are they Similar??

E commerce E business
1. Subset of E-Business 1. Superset of E-Commerce

2. Commercial Transactions 2. Business Transactions

3. Requires: A Website 3. Requires: Multiple websites, CRM’s,

ERP’s, etc.

4. Activities include: buying and selling 4. Activities include: procurement of raw

products, and making transactions materials, supply activities, buying and
over internet. selling, monetary transactions, etc.

5. B2C 5. B2B

6. Covers External business activites. 6. Covers Internal as well as External

business activities.
Structural Transformation through E Business

• Introduction of a new
low cost residential
delivery service -
FedEx Home Delivery.

• Changes for B2B

solutions.

• Growth in consumer
e-commerce [B2C e-
tailing]
Structural Transformation through E Business

Example:
Inability to overthrow the dominant, outdated
business design often leads to Business failure
therefore.....
.
.
Flexible Business Design
Flexible Business Design Create the
Engineer digital
Define future
the end to
value in design
end value Integrate
terms of
stream
whole
customer
Identify experience
traditional
definitions
of product 4 5

2 3

1
Customer Experience
The ERP and Customer 1

Connection: Highly integrated and automated workflows

between various departments of the organization.

360-degree view of customer data.

Real time visibility across complete supply chain

in order to provide quickest and accurate
response to customers.
 Customer Experience
An ERP can be used to provide improved and efficient Improved Customer Experience:
customer service: Modern ERP applications is an integrated
system and it has only one database for
all the modules.

Customer retention: Order Management and

ERP maintains all the records of the
Inventory Management:
customer and helps the company to Customer experience is not only about
understand the life cycle management of just providing a quality product but also,
the customer’s assets. delivering at the promised date.

Effective resolution of
customer’s queries: Competitive
Pricing:
ERP plays a great in keeping the prices
With the help of CRM (Customer Relationship Management tools competitive as it helps in reducing the
available as part of ERP), which enables the companies to understand inventory and work in process which
the buying behavior of the customers and other important statistics. means there will be a lesser cost
associated with manufacturing.
Enterprise Technology
• It refers to the concept of information technology (IT)
resources and data that are shared across an enterprise.

• Enterprise technology makes it easier for the entire

organization to work seamlessly and achieve its goals.

• Increased agility, responsiveness, and security are some

of the aims of enterprise technology.
Enterprise Technology
A summary of the common types of Enterprise Technology:
How to set up an Enterprise?

Choosing your form of

Business Organisation & Feedback and
Making a Product Choice Reporting
1 6

Preparation of
Business Plan KEYS Marketing
2 5

Sourcing Process, Raw Materials,

3 4
Production, Finance & Human
Machineries and Equipments Resource
& Infrastructure
New Generation
E-Business
 New Generation
The e-commerce game is no longer about being the fastest in the space but about
E-Business being able to deliver in a price range that matches with the customer needs.

• Electronic communication systems, such as email, video conferencing and online collaboration platforms that
incorporate the dynamics of social media, likewise increase productivity by decreasing delays between
inquiries and responses.

• The increased speed also results in faster decision-making, making companies more agile and responsive to
stakeholder needs and market demands overall.

• The digital systems that power e-business can also extend an organization's reach. Cloud-based business
applications enable workers to perform their jobs from home and other remote locations, such as client sites
giving even solo practitioners and small businesses the ability to be global enterprises.
 New Generation
E-Business

• Digital systems, and particularly emerging technologies such as machine learning and artificial intelligence,
have also improved the ease, speed and effectiveness of numerous e-business tasks, such as archiving
information, searching stored data for insights, recording financial transactions and connecting with
customers with personalized messaging.

• More importantly, however, the rise of advanced e-commerce software and services have delivered new
capabilities to organizations, such as email marketing, and created new avenues to sell their goods and
services, such as online stores.

• E-business software has enabled the creation of entirely new business models, such as eBay's capacity for
consumer-to-consumer and business-to-consumer sales and social networking sites such as Facebook.
Business and digital authorities still frequently classify e-business as B2B, B2C, C2C and C2B. Some offer
additional classes of e-business, such as business-to-government and business-to-employee.
Several trends and solutions are related to the customer journey
and can be considered for New generation E-business strategies.
 Some common challenges of E-Business:

securing e-business services against scaling services fast enough to meet

cyberattacks demand without jeopardizing performance

evolving their technologies fast enough integrating e-business services and

to keep pace with changing market using them to transform themselves
dynamics into digital operations
 Usage,
Implementation and
Future of ERP
applications
Enterprise Resource Planning

1. ERP usage in real world

2. ERP Implementation
3. Future of ERP applications
 ERP usage in real world
 More memory is saved  Improved Collaboration

• Although many vendors have introduced • The features of ERP applications can vary
flexible pricing in recent years, ERP slightly depending on the program you are
packages are still a big investment. For using, but generally, all systems improve
many, the large costs alone can make it collaboration in some way. As mentioned
seem unlikely that the program would end before, the centralized database is an
up saving your organization any money at integral part of what makes an ERP unique.
all. But once you get past the sticker shock, With this database, you provide your
it’s easier to see how ERP can provide an company with a single source of truth to
excellent ROI. work from. This reduces any errors brought
on by working with the incorrect data,
further reducing costs
 ERP usage in real world
 Improved Productivity

 Improved Inventory Monitoring

• With traditional methods, tedious tasks are • The features of ERP applications can vary
completely unavoidable. Tasks like slightly depending on the program you are
generating reports, monitoring inventory using, but generally, all systems improve
levels, timesheet tracking and processing collaboration in some way. As mentioned
orders have historically taken employees before, the centralized database is an
hours to accomplish. In addition to taking up integral part of what makes an ERP unique.
time, these processes lower employee morale With this database, you provide your
and open yourself up to human error. After company with a single source of truth to
the umpteenth hour of entering the same line work from. This reduces any errors brought
of data into different forms, even the best on by working with the incorrect data,
staff members are bound to make a mistake. further reducing costs
 ERP usage in real world
 Happier Customer

 Better Analytics
• Managing your customers has never been so • A central database of information also aids
important. In our digital age, more and more in improving your analytics and reporting.
people are turning to the internet to receive Since an ERP records and stores all the data
advice on what clothes to wear, what food to users input, it makes for an excellent
eat and how to live their lives. And with 84 business intelligence tool. As long as your
percent of consumers trusting online vendor provides strong functionality, ERP
reviews as much as they would a friend, software makes it easier and faster for your
previous customer opinions are more team to generate various reports. Reports
impactful than ever that could take days of research and
compilation without an ERP takes just
minutes.
 ERP Implementation

• 1. Discovery & Planning

• What is the first phase of ERP implementation? This includes researching and selecting a system,
setting up a project team and defining detailed system requirements .The project team will handle a
broad range of roles related to the implementation, including laying out the project plan and target
dates, ensuring adequate resources are allocated, making product and design decisions, and day-to-day
project management.
• 2. Design
• The design phase works from detailed requirements and an understanding of current workflows to
develop a detailed design for the new ERP system. This includes designing new, more efficient
workflows and other business processes that take advantage of the system. It’s important to involve
users in the design phase, since they have the most intimate understanding of current business
processes. Involving them in the design also helps to ensure that they’ll welcome the new system and
take full advantage of it.
 ERP Implementation
• 3. Development
• Armed with clear design requirements, the development phase can begin. This involves configuring
and, where necessary, customizing the software to support the redesigned processes. It may also include
developing integration with any of the organization’s other existing business applications that won’t be
replaced by the ERP system. If you’re using an on-premises ERP system, the organization will need to
install the necessary hardware and software.
• 4. Testing
• Testing and development may occur concurrently. For example, the project team may test specific
modules and features, develop fixes or adjustments based on the results, and retest. Or, it may test one
ERP module while another is still in development. Initial testing of the basic functions of the software
should be followed by rigorous testing of the full capabilities of the system, including allowing some
employees to test the system for all their day-to-day activities. This phase should also encompass
testing of the migrated data and include introductory end-user training.
 ERP Implementation
• 5. Deployment
• This is what you’ve been striving toward: the day the system
goes live. Be prepared for potential issues, since there may be
a lot of moving parts and possibly some befuddled employees,
despite your best efforts to prepare them for the change. The
project team should be readily available to answer questions,
help users understand the system and attempt to fix any issues.
• 6. Support & Updates
• Nurturing your ERP implementation after deployment helps to
keep users happy and ensure the business achieves the desired
benefits. The project team may still be responsible for the ERP
system during this phase, but its focus will shift to listening for
user feedback and adjusting the system accordingly.
 Future of ERP Applications
 The rapid consumerization of technology over the past few years has led
enterprises to move on to cloud and new trends like wireless technology
 ERP system will become easier to use, while the cloud, mobile devices and social
media will have an impact on products for manufacturers
 The ERP of the future promises to be simplified, more accessible and easier to
use, shaped by trends that began taking hold from few years.
 Cloud computing, which enables companies to access ERP software over the
Internet, has already shown vendors that companies value ERP that can be more
easily installed and rapidly consumed
 Cloud-based ERP services will also evolve in the future to become more
integrated both with other clouds and with installed ERP systems
 Future of ERP Applications
 Cloud ERP will continue to help organizations integrate data and
process across functional departments
 Influence of Wireless technology will support more number of
mobile workforces
ERP in Public sector:
15% Failed: Not implemented or Never used
34% Successful
51% Challenged: Over budget , Over schedule or Under-delivered
 Future of ERP Applications

• New Market
• 1. Supplementing direct sales with reseller channels.
• 2. Software offerings to appeal on the basis of reduced
functionality.
• 3. Improving the implementation methodology for faster
development.
• 4. Removing the entry price to make it financially viable.
• New channels
• As all the vendors being forced to market their product in the
world of small business, they should make their software products
more affordable by lowering the prices for each module and by
ramping up the total costs by basing price on user licenses.