|Lesson 5 || E-Commerce technology |
| Objective ||Outline basic technologies associated with e-commerce. |
Ecommerce technologies, particularly for Web-based e-commerce, involve a wide range of telecommunications, software, and hardware that together form a complete e-commerce solution. These are also the basic elements that differentiate e-commerce from traditional commerce. Let's look at these in more detail.
Tele-communications and hardware
Telecommunications acts as the information pipe, connecting buyers and sellers. Hardware provides the physical plant to execute software and to integrate software to telecommunications.
Software provides the long list of functions typically associated with e-commerce, including:
- Creating and displaying the Web-based storefront or catalog
- Handling payments and interfacing with payment service providers
- Capturing site traffic information to support marketing activities
- Implementing security (often in conjunction with certain telecommunications protocols)
- Integrating e-commerce solutions with other enterprise software applications
- Providing transaction processing capabilities to handle orders throughout fulfillment and shipping
As mentioned above, telecommunications, hardware, and software are the basic elements that differentiate e-commerce from traditional commerce. The Slide Show below describes these elements in more detail.
The historical development of e-commerce suggests that it emerged as a powerful force only after a truly open and standard data network known as
the Internet was coupled with easy-to-use software, primarily the invention of Netscape. Many innovative business models evolved in an attempt to take advantage of this new platform, coupled with a host of clever new marketing strategies. Ecommerce opened up new avenues for consumers as well, creating new consumer-centric markets in which their bargaining power has been enhanced. New methods of payment (such as Paypal) as well as approaches to improving the security of
online transactions were introduced.
Despite these developments, a key theme of the chapter is that although much has changed as a result of e-commerce, many of the expected impacts have not occurred. A review of research on several anticipated impacts highlights the need to critically assess the early hype regarding the effect of e-commerce on competitive strategy, market structures, B2B relationships, and prices of goods and services.
Elements differentiating Ecommerce
In the next lesson, we will identify some of the potential challenges associated with e-commerce, and discuss strategies for overcoming some of these problems.