Electronic Commerce and Open Source Software

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Table of Contents

Foundation of electronic commerce
Benefits of electronic commerce
Limitation of electronic commerce
Business-to-consumer application
Business-to-business application
Conclusion
References

Foundation of electronic commerce

Electronic commerce describes the buying and selling of products, services, and information via computer networks, primarily the internet. Business conducted electronically fits into three categories. The opening case shows an example of business-to-consumer in which companies sell directly to consumers over the internet. Business-to-consumer sales may have been done by a company that has been specifically created to do business on the internet or by an exciting company that opens its own online business. The major benefits of business-to-consumer are increased revenues, the creation of new sources of revenues, and the elimination of costly intermediaries.

The second category is business-to-business, in which two businesses make transactions electronically. In business-to-business, the major benefits include reduced cost, reduced cycle time, increased customer base and sales, and improved customer service.

The third category of electronic commerce into business in which transactions take place within an organization, in an attempt to increase productivity, speed, and quality and so cut cost.

The term commerce is viewed by some people as describing transactions conducted between business partners.

The term electronic commerce seems to be fairly narrow, and many use the term e-business instead.

It refers to a broad definition of electronic commerce, not just buying and selling but also servicing customers, collaborating with business partners, and conducting electronic transactions within an organization.

According to Lou Gerstner, “e-business is all about time cycle, speed, globalization, enhanced productivity, reaching new customers and sharing knowledge across institutions for competitive advantage.

Electronic commerce is a very diverse and interdisciplinary topic, with issues ranging from technology addressed by computer experts.

Benefits of electronic commerce

First for organizations

Expands company’s marketplace to national and international markets. With minimal capital outlay, accompany can easily and quickly locate more customers, the best suppliers, and the most suitable business partners worldwide.
Allow a vendor to reach a large number of customers anywhere around the globe at a very low cost.
Enables companies to procure material and services from other companies rapidly and at less cost.
Shortness or even eliminates marketing distribution channels, making products cheaper and vendors profit higher.
Decreases the cost of creating, processing, distributing, storing, and retrieving paper-based information.
Allows lower inventors by facilitating “pull” – type supply chain management, which starts from customer orders and uses just-in-time production and delivery processing. This allows product customization and reduces inventory costs.
Lowers telecommunications costs because the internet is much cheaper than value-added networks.
It helps small businesses compete against large companies.
Enables a very specialized niche market.

The consumers

Provides less expensive products and services by allowing consumers to shop in many places and conduct online quick comparisons.
Give consumers more choices they can select from many vendors and many more products than they could easily locate otherwise.
Enables customers to help or make other transactions 24 hours a day, year round, from almost any location.
Delivers relevant and detailed information in seconds rather than in days or weeks.
Enables consumers to get the customized product from PCs to cars at competitive prices.
Make it possible virtual actions in which consumers can find unique products and collector’s items that might otherwise require them to travel long distances to a particular auction place at a specific time.
Allows consumers to interact with other consumers in electronic communications and exchange ideas as well as compare experiences.

The society

Enables more individuals to work at home and to do less traveling resulting in less traffic on the roads and lower air pollution.
Allows some merchandise to be sold at lower prices, so less affluent people can buy more and increase their standard of living.
Enables people in less developed countries and rural areas to enjoy products and services that otherwise are not available to them. This includes opportunities to learn professions and earn college degrees or to receive better medical care.
Facilitates delivery of public services such as government entitlement, reducing the cost of distribution and fraud, and increasing the quality of the social services, police work, health care, and education.

Limitation of electronic commerce

EC has some limitations, both technical and nontechnical, which have slowed its growth and acceptance.

Technical limitations

There is a lack of universally accepted standards for quality, security, and reliability.
The telecommunications bandwidth is insufficient.
Software development tools are still evolving.
There are difficulties in integrating the internet and EC software with some existing applications and databases.
Special web servers in addition to the network servers are needed.
Internet accessibility is still expensive and inconvenient.

Nontechnical limitations

Many legal issues are as yet unresolved.
National and international government regulations are lacking and standards for many circumstances are missing.
It is difficult to measure benefits of EC such as web advertising.
Many sellers and buyers are waiting for EC to stabilize before they take parts.
Customers are resistant to the change from real to a virtual store.
There is a perception that electronic commerce is expensive and unsecured so many do not want to even try it.
There is an insufficient number of sellers and buyers needed for profitable EC operations.

Business-to-consumer application

There are many potential applications of Ec that will foster trading between businesses and individual customers. the projected 750 million internet users within 10 years could generate a huge volume of business-to- consumer transactions.

Business-to-business application

It covers a broad spectrum of applications that enable an enterprise to form electronic relationships with it’s distributors resellers, suppliers, customers and other partners.

Business-to-business applications offer enterprises access to these types of information:

Product (specification, prices, sales history).
Customer (sales history and forecast).
Product process (capacities, commitments, product plans).
Transportation (carries, led times, cost).
Inventory (inventory levels, carrying cost).

Conclusion

An electronic market is an information system that links together many buyers and sellers to exchange information, products services and payments. Through computers and networks, these systems function like electronic intermediaries, with lowered costs for typical marketplace transactions, such as matching buyers and sellers, establishing prices, ordering goods, and paying bills. buyers and sellers can complete purchase and sale transaction digitally, regardless of their location.

Electronic commerce: the process of buying and selling goods and services electronically, involving transaction using the internet, networks and other digital technologies.

References

Angell and Smithson S. “Information Systems Management.” accessed on 2003.
Article published by Kenneth C. (professor of information systems at New York university) on 2000.
Jean-Pierre Kuilboer e-Business and e-Commerce Infrastructure accessed on (2002).
Jan Price Laudon “Managing Information Technology in the Internet worked Enterprise” accessed on 1999.
Krishnamurthy, “E-Commerce Management” accessed on 2003.
Miller Roger “The Legal and E-Commerce Environment Today”.
Paul Timmers, “Electronic Commerce” published on 2000.

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