Evaluation of E-Commerce Models Technical Analysis - Report Example

Electronic commerce Name : Student Number : Lecturer : Abstract In this particular brief we are going to dwell mainly on electronic commerce and how web 2.0 technologies may have a direct influence on the new business concept of electronic trading. We will begin by giving some introduction on electronic commerce. We will then proceed by having a snapshot of web 2.0 technologies and how the same technology may be applied towards different industries in order to minimize on their operational expenses while maximizing on profits. We will finally have a look at mobile commerce together with its associated security mechanisms and how they can finally be applied within the organization in order to ensure that an enterprises is in line with global information security practices so that all their information that resides in their technological systems are confidential, have integrity, and are available on demand. Table of Contents Introduction…………………………………………………………….……………….3 Web 2.0 ………………………………………………………………….………………5 Web 2.0 in Enterprise ………………………………………………….………………6 Mobile Commerce ……………………………………………………………………..10 CIA Security triad …………………………………………………….……………….11 Conclusion………………………………………………………………………………14 References……………………………………………………………………………….15 Introduction Electronic commerce is basically the buying and selling of goods and services electronically over the information superhighway. The effects of this concept can be witnessed in various sectors such as communications, finance, retail, education, health, and government, whereby routine business activities such as ordering office supplies, paying bills, and estimating demands have already taken a new twist. Electronic commerce concept may involve various aspects of an organizations electronic interactions with the stakeholders, and may extend into other activities such as establishing web pages and other online collaboration tools such as wikis and social networking sites, in order to collaborate with stakeholders such as; the general public, employees, managers, financial institutions, government regulators, suppliers, and customers among others (Richard et al., 2008). In today’s emerging economy, this particular concept is a necessary component in any business strategy. Integrating ICT in business activities has been cited to enhance on productivity, encourage more customer participation in product development, and enables mass customization of products, besides minimizing on operational expenses (Andam, 2003). This paradigm shift in business strategy can be attributed to a combination of regulatory reforms and technological innovations coupled with the liberalization of the telecommunication sector which has significantly expanded on the volume and capacity of different forms of communications technology such as satellite, Wi-max, fiber optic and digital subscriber line technologies (OECD). As a result of this, numerous opportunities have presented themselves, and today with only some few thousand dollars, any individual can easily become an internet merchant and reach millions of consumers across the globe regardless of his/her location provided that they have a computer that is connected to the internet. Web 2.0 The internet has morphed from static HTML pages where readers just only copy and find information, to a medium where visitors are in a position of creating and posting information. This has in return enabled the web to transform as a participatory and interactive place where information is created collaboratively while sharing the results. The tools that are widely used for such collaboration mainly include; blog spots, wikis, RSS feeds, and social networking sites among others. With web 2.0 users can do more than only retrieve information because these collaboration tools provide users with more control on their data, and web 2.0 applications are developed in such a way that they have a unique architecture of participation that encourages their users for rational debate, online collaboration, and blogging/podcasting in social sites such as Facebook, twitter, and YouTube. With web 2.0 technologies in place, it is possible to conduct customer reviews. Online product reviews may easily attract clients to the online shop and make them return customers. The reviews will also educate customers on the products that are available while assisting in enhancing trust and confidence, boosting client’s satisfaction while reducing client complaints. Whenever an ecommerce websites integrates social networking sites (Facebook) features on their websites as part of their web 2.0 strategy, it is possible to establish some “fan bases” whereby in electronic commerce success is usually determined by the popularity of the website. You can develop a facebook fan page that creates a network for the most raving fans for the company’s products and not on the retailers website, this would in return make it a little bit easier to share and invite other like minded friends to participate, which is more easier then even forwarding e-mail messages or products pages to friends in order to drive traffic to the electronic commerce website. Some of the leading online retailers that have embraced the facebook fan page concept include: JC Penny, GAP, Urban Outfitters, and Fingerhut among others (Linda Bustos, 2010). Facebook also have some banner advertisements that can be customized in such a way that they appear in customer’s facebook personal account pages. These adverts would target particular clients because the ecommerce company already has some information on the customers which may include; monthly income, products preferred, and frequency of purchases among others. These adverts can be accompanied by discounts that would lure the client into making the purchase immediately hence converting the advert into a direct sale. Web 2.0 in Enterprise Travel Industry Traditionally people would normally visit a travel agency, choose destination, and select providers and carriers. With the advent of the internet, this has significantly changed and people nowadays turn to the information superhighway for tools and online communities to assist them in their research on the best holiday destination. Through online tools and communities, these prospective travelers are able to find flights, hotels, and destinations. Prospective travelers may also explore on user generated contents which are in form of videos, photos, reviews, comment posts, and blogs to learn about different places and diverse travel experiences (Lytras, Carrol, Daminani, 2008, p.576). Because there exist vast number of websites being owned by airline carriers, travel agencies, and hotels, it is very difficult to establish who has the best offer that a customer would desire, aggregation sites therefore come in handy because they offer metasearch functions which enable clients to easily compare the different service providers in price or other preferred categories (Conrady, 2010, p.86). These travel related websites are usually integrated with other outstanding features such as 360 degree view of the tourist attraction which would enable the potential clients to have a look at the beaches and the set up the room. These travel related websites can also be used for hotel and airline ticket reservations provided that the potential client has some credit/debit card for depositing cash (Lellinger, 2010, p.14). Health Industry Web 2.0 technologies can also be seamlessly integrated into the healthcare industry. Patients may embrace these collaboration tools hence save on time and additional expenses by obtaining quality information through the assistance of these web 2.0 applications such as wikis, and social networking sites. These patients may acquire health related information from such tool making them to become more health educated which would result into a healthier lifestyle for them. This would in the end decrease their spending on over the counter (OTC) drugs which normally would come out from their own pockets. In the perspective of healthcare providers, there are significant costs saving benefits such as revenue increases because most of their potential patients rarely visit their facilities for medical check up. This in return translates into less medical personnel, less pressure on office space, and less stocking of drugs because their potential patients are leaving a healthy lifestyle (Sturm, 2010, p.241). Also according to PEW internet research survey that was conducted in 2002, 2004, 2006, 2007, and 2008, it has been consistently revealed that more than 75% of internet users search online for health related information whereby they normally frequent websites such as emedicinehealth.com, mayoclinic.com, familydoctor.org, and WebMD among others. In these websites, information is only posted by experts but anybody has the freedom to search and use it. These websites have information ranging from chronic diseases to cancer to Alzheimer. This clearly suggest that while in the past individuals would consult their closest buddies, today they just read blogs, listen to podcasts, wikis, and also post comments on the social networking sites for solutions to be provided to them(Pardede, 2011,p.7). Government Competition is growing among countries, and with the pressure for respective governments to perform, technological innovation is being regarded as a panacea because it provides for the state the ability to cope with societal needs posted in economics, welfare, health, education, and environment among others. In order to achieve this, the country’s citizens have to be involved as well as the agency staff, this requires adequate tools and methods whereby with web 2.0 technology such means are now possible. It is possible to use social media in several government related activities (Andersen, 2010, p.77). Most of the information which are collecting dust in government offices can be packaged and distributed by using web 2.0 technologies which would in return assist the citizens to make more informed decisions pertaining to quality, cost and performance. This would enable the government of the day to adopt a less paternalistic approach to their citizens and shift some of their activities from monopoly to choice based models. For instance, through information power, it is possible to transform government designed by politicians and bureaucrats to government designed by the citizens where everything that requires to be done can be easily customized for each citizens interest, location, and needs (Eggers, 2007, p.20). For instance, whenever an individual wants to apply for a driver’s license, passport, or trade license, there should be abundant information that is available via information portals that would guide the citizen from the starting point. This would reduce time wasted, fuel consumption for the citizen moving from different offices which would even improve on the country’s carbon footprint, and lost man hours. Table 1.0 Frequency of use of Web 2.0 tools for levels of US governments (Reddick, 2010, p.172). Retail Industry The online retail industry is witnessing unprecedented level of growth that has never been seen before. This is evident through the voluntary inclusion of customers within the sales process in various forms such as product ratings, friend’s recommendations, feedback, social communities, and social interactions on the information superhighway. Active social networking site users tend to take into considerations the comments left by other like minded users in discussion forums when making any kind of purchase. This provides customers a rich platform to share on their experiences. This has been found to increase revenue for electronic retailers significantly because there products advertise themselves to their customers friends and other associates. For instance, if a certain client purchases a Dell laptop with outstanding features from a company like Amazon, these happy customers will give it a positive review. Potential laptop buyers will tend to read on these reviews first before committing personal resources on any machine and because this particular make and model has a positive review, there is a possibility that the potential customer will be convinced to buy the exact make and model of the laptop. This increases revenue for the online retailer that was selling the laptop and the laptop manufacturer. Web 2.0 applications will increase in popularity because online retailing is being projected to increase in revenues significantly for the coming years. Fig 2.0 Online revenue projections (Billion Euros) excluding motor vehicles and pharmacy (Heinemann & Schwarz, 2010, p.2). When various industries implement web 2.0 technologies there are direct benefits which may include increased revenues because there are a number of repeat customers, increased client satisfaction and enhanced brand perception. This is likely to translate into direct sales hence increased turnover and capital base for the enterprises. Mobile Commerce According to (Tandon, Mandal, Saha, p.1) It may be defined as the exchange of goods, services, information, and knowledge through the use of mobile hand held devices. This particular technology entails a number of activities which may range from e-mail communication, receiving product information through SMS technology, and transmitting customer specific information through hand held PDAs among others. Mobile technology has already increased enterprise mobility which spans business-to-consumer, business-to-business, and business-to-employee spectrum. This particular enterprise mobility has the potential to improve on organizations productivity while optimizing on the same organizations logistical operations, improving on customer relationships, and streamlining the supply chain management. Rich mobile applications which are embedded in modern mobile technological devices can provide the sales staff with updated information pertaining to their clients while offering them innovative approaches towards their day to day duties, and by just enabling employees to work from any location, enterprises can drastically reduce on their carbon footprint (IBM, 2009). These same enterprises can also directly sell their merchandise through the cell phone whereby client just orders goods directly via mobile applications and pay through his/her credit/debit card or installed mobile application payment system. Growth Areas Organizations that have successfully implemented electronic business and electronic supply chains may use a number of technologies to spur their growth and dominance. Some of the key areas that show a lot of promise in boosting an organization asset base may include; Mobile marketing This may be done internally by use of systems whereby the company can send text message alerts to some of its customers pertaining to new offers and products in the market. It is very effective in the sense that messages have to be directly delivered to the customer or potential customer’s mobile handset. This will provide the company a very cost effective way of advertising their products because a typical SMS gateway is very affordable considering that it is installed once and can be used for a long period of time. These text messages can also be used for; brand building, timely teasers, requests, competition, and polls (Scharl, Dickinger, Murphy, 2004). Text messages are very effective in the sense that they can be customized, they are less intrusive than phone calls because recipients may read them during their own free time, easier to personalize, and the target advert may be location based making it only applicable within certain jurisdictions hence increase on effectiveness. Mobile Payments The company may also implement mobile payment initiatives whereby the company products once selected in the shopping cart can be paid using mobile technology such as mobile phones. This provides more convenience to the customer because there is an array of payment methods that are available at their disposal. Such kind of payment system would greatly appeal for the masses that have not yet qualified for credit cards which are mandatory in making most of the online payments when making purchases. RFID technology The company can also embrace the RFID technology to track all the shipped products. This works great when products are shipped out from the warehouse after being scanned, a text messages is sent to the client on the exact location of his goods, and when the product is finally delivered to the client, there will be a text message confirmation. This will eventually minimize the risk of product delay and goods getting lost along the way. CIA Security triad Enterprises information together with their technological systems have to be protected from unauthorized destruction, recording, inspection, perusal, modification, disruption, disclosure, use, or access. This therefore requires that the organization should devise appropriate mechanisms with a main goal of protecting the confidentiality, integrity and availability of information from unauthorized parties. It is due to this background that the three pillars of information security emerged, which are referred to as the; confidentiality, integrity, and availability (CIA) of information in any organizations. Confidentiality It is the most cited goal of information security because most enterprises would not love their confidential information falling in the hands of unauthorized people. Information which is vulnerable may include; credit/debit card numbers, social security numbers, bank account details, and contact details which may be used to send unsolicited messages. Such information may be obtained by online criminals with the intention of defrauding, or they may be acquired by business rivals who would want to steal some of the company’s secrets (Solomon & Chapple, 2005, p.3). Information confidentiality can be controlled by ensuring that the enterprise has installed access control systems and other encryption technologies. This is so because it is very easy to intercept information especially when travelling on wireless networks. Integrity Solomon & Chapple (2005, p.2) continue to argue that the integrity of the enterprise data has to be protected. This may be ensured by only modifying data through some authorized mechanism. This is so because there are quite a number of unauthorized modification techniques which can seriously dent the organizations reputation and these may include: In the context of an electronic shop unauthorized users can alter information in the database and this may include marking status of orders as paid yet they are not paid. The products will then be unknowingly shipped by the company to the client without paying any money. When such a loophole exists, then the company may incur serious losses. Data may also be altered by use of inappropriate mechanisms like power surges which can definitely corrupt the data. The integrity of information in an enterprise may also be controlled by using access control and encryption techniques. Availability Authorized personnel should be in a position of accessing information for legitimate purposes. This is so because any computer hacker who prevents legitimate users from accessing information can be considered just as a successful criminal who steals or manipulate that same information. Therefore data has to be available to the right people at the right time (Carpenter, 2009, p.378). Access Control According to Tipton (p.4) access control encompasses all the available operational levels that are present within an enterprise. This includes: Facilities: Access control will protect unauthorized entry around the enterprise physical entry such as personnel, information and other facilities. May include installing perimeter walls and electric fences. Support systems: Accessing supporting systems such as power, heating, ventilation, air conditioning have to be controlled so that intruders may not compromise systems. Information systems: There are a number of layers of access controls within information systems and networks. These have to be protected by using appropriate techniques and mechanisms from harm or misuse. May involve installing firewalls, intrusion detection systems, and antivirus systems. Personnel: Different people like the clients, end users, partners whoa re associated with the enterprise should undergo some form of access control in order to ensure only the right kind of people interface with the information systems. Encryption techniques Any information being transmitted over any medium should have an encryption and a decryption mechanisms, this would ensure that specific information can only be viewed by authorized parties hence preventing misuse of company information for selfish personal gains. Conclusion With increasing business competition, electronic commerce has the potential of minimizing on an enterprise operational expenses hence making the organization to become more competitive. However this requires the integration of the business processes with the right tools so that the specific objectives of the business are met as envisaged. With most business entities having a number of critical information, there has to be a solution that is deliberately devised to protect these business specific information from all sorts of abuse. When all these have been considered then the true benefits of electronic commerce may be realized as initially anticipated. 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