What is e-commerce

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Whilst E-Commerce is seen as a quite recent technology, it is important to appreciate that it began to evolve in the only 1970’s. The roots of modern E-Commerce are EDI (Electronic Data Interchange) and EFT (Electronic Funds Transfer) – technologies that are some 30 years old! It can also be said that Transaction Processing (with the use of ATM’s Automatic Teller Machines) is also a form of E-Commerce. However, for many, it is the emergence of the World Wide Web and the Internet that signifies the beginning of real electronic commerce.

E-Commerce can mean different things to different people. One definition, from the Automotive Industry Action Group in North America is:

* “The application of advanced information technology to increase the effectiveness of the business relationships between Trading Partners.”

* So E-Commerce is buying, selling or the exchange of products and services via computer networks

* “E-Commerce is wreaking havoc on traditional distribution philosophy, creating obsolescence for many conventional intermediaries and channels”, (Pamela Barnes Yieyra, Cindy Claycomb )

What e-Commerce can deliver:

E-Commerce can provide a number of benefits to both business and consumer a number of things are illustrated below:

* Providing a ‘window’ for a company’s goods and services to be seen both nationally and internationally.

* General consumer services including entertainment, home banking, stock trading and home shopping.

* Health services such as remote consultation and the exchange of information between hospitals.

* Local authority services such as Education (distance learning), Leisure Services (facilities booking) and Planning and Transportation, citizens advice etc.

Who is interested in E-Commerce

What is perhaps most interesting about eCommerce is the key influence technology on the different function in any business such as on – marketing, finance, economics, management (including management of information systems), accounting and auditing, business law and ethics, psychology, sociology etc. etc….

Internet and E-Commerce

It can be argued that the provision of an electronic marketplace within the Internet has significantly improved the productivity and competitiveness of all participating companies regardless of whether they are suppliers or customers. The Internet provides access to an online global marketplace that operates on a 24/7 basis, with millions of customers and thousands of products and services. It also provides companies with new, more cost effective and time-efficient means for working with customers, suppliers and development partners. Internet based electronic commerce will enable companies to:

* Shorten procurement cycles through use of online catalogues, ordering and payment.

* Savings due to “just in time delivery” and “just in time manufacturing”. Cut costs on both stock and manufactured parts through competitive bidding. Reduce development cycles and accelerate time-to-market through collaborative engineering and product implementation.

* Gain access to worldwide markets at a fraction of traditional costs.

* Ensure product, marketing information and prices are always up to date.

After seeing the benefits of E-Commerce managers of SME’s have a decision to make about whether to broaden their customer base by embracing E-Commerce. Decision-making is the act of seeking and interpreting information and arriving at conclusions considering strategic issues. (E. Frank Harrison)

Problems facing e-commerce managers (three case study)

There are a number of problems facing E-Commerce managers a number of which are examined below:

Lack of website designers

In the case of ask the builder; Tim Carter lack of web designing delayed his responds to customer’s queries so he had to seek some professional consultations, which developed his skills in web designing.

Handling customer queries

Customer base was rising by time through promotional activities and word-of-mouth. However, this rise in customer base reduced time and services devoted to each customer.

Increase in inventory level

A large number of items offered online raised the level of inventory, which consumed more time.

Weak website quality

If competitors provide websites with a better quality and word-of-mouth can impact negatively on a business customer base.

Lack of professional mangers

Between every sale and production line there should be a managerial line to coordinate customer’s orders specification and production.

Delivery delay

Quality of the product establishes customer loyalty, but no matter how good the product is customers will not accept delays in delivery unless it is a monopoly market!

Poor business image

Delivery delay and poor product quality can generate a negative impact on the product demand.

Financial crises

Delay in delivery have a “Knock on” effect on the invoicing process which may create cash flow problems in the short term which if not addressed will create financial crises in the long term.

Method of Approach

In order to conduct an initial analysis of the case studies, we merged the problems and desired objectives of the three case studies. Five different phases were used to approach a clearer understanding of the problems.

Intelligent phase:

During this phase, activities to be conducted included:

* Reading the case studies.

* Understanding the relationship between all variables and how a change in one could have an effect on the other.

* Going through the Stella 7.0.2 User guide and learning its use with hands on laboratory sessions.

* Conducting various exercises to see the behaviour of Stella under different conditions.

Design phase:

During this phase, activities to be conducted included:

* Drawing an “Influence Diagram”.

* Identifying the deferent sectors that are common in the three case studies.

* Placing the variables in the right sectors.

Choice phase:

During this phase, activities conducted included:

* Making changes to the model, if results were not as expected.

* Adding variables, which were not considered previously but were relevant to the case studies.

* Reviewing the model on a continuous basis so it becomes an accurate reflection of reality.

Implementation phase:

No activities were conducted in this phase, as the whole exercise was to create a Learning Laboratory (Micro world) to aid decision support analysts and e-commerce managers in decision-making.


All of the above phases fed back into the “reality” sector. The aim was to compare each activity with the real life scenario, so that we did not side step.

In order to achieve this, regular guidance was sought from DSS experts at the university.

In addition team meetings were held on a regular basis between all members, to discuss the case study and to make sure we were heading in the correct direction.

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