E-Commerce Training with Virtual Commerce Simulation

E-Commerce Training with Virtual Commerce Simulation Alper Özpınar Department of Computer Engineering Istanbul Commerce University, Turkey [email protected] Erdem Yavuz Department of Computer Engineering Istanbul Commerce University, Turkey [email protected] Abstract: Over the last decade, commerce has experienced several major revolutions in size, structure and competition. The importance of small and medium enterprises (SMEs) has become more and more important within this market structure. Electronic Commerce, commonly known as electronic marketing or e-commerce that consists of the buying and selling of products or services over electronic systems, is more profitable and affordable than ever before. However only few SMEs are taking advantage of e-commerce, due to the lack of education and training in new technologies. This paper presents and explains the case study of e-commerce training for SME’s with the aid of online commerce game which is called the “Virtual Commerce” and classical classroom training. In Virtual Commerce, every participant owns a company and a certain amount of digital money. They can act both as a consumer that purchases from other participant sites and as a supplier for the others. Market conditions, discounts rates and requirements are set by the system operators. This methodology and training has applied for the selected 30 SME’s from different sectors. The aim of the project is to lower the costs for the SME’s e-commerce training through e-learning and improve participants’ abilities with online simulation. Keywords: E-commerce, virtual commerce, simulation game, SME training, e-learning Introduction The use of internet and rapidly altering economical factors change the way of making business and roles of organizations, to survive within that new economical conditions. These conditions make the competition between companies on virtual and e-environments rather than classical way of making commerce. This new economical conditions or in other words new digital economy rules the world market. The New or Digital Economy is about dynamics, not static efficiency. It is more about new activities and products than about higher productivity. What is really new in the New Economy is the proliferation of the use of the Internet, a new level and form of connectivity among multiple heterogeneous ideas and actors, giving rise to a vast new range of combinations (Carlson, 2004). According to new economical conditions changes the way of making business from capital rise and grow to information rise and grow. However future projections showed that companies that will survive from the new economical challenges will be the bricks-and-clicks companies rather than the purely digital or online companies or the classical or offline companies. Bricks-and-clicks are also known as click-and-mortar or clicks-and-bricks, as well as bricks, clicks and flips, flips referring to the product catalogs. The studies about these companies indicates that contrary to the assumptions that early movers in e-commerce do not have a significant advantage in market share, profit margin, or marketing efficiency compared with later entrants. The bricks and clicks combinations in our sample possess higher market share and higher marketing efficiency than do pure-plays (Kuan and Bock, 2007) which means there will be always some space for new players in the market. SME’s can be considered as these new players because they are fast moving and changing structures to the new economical conditions. According to the economists there are major opportunities for new entrepreneurs and small- to medium-sized businesses to flourish in the maturing of e-commerce (Weintraub, 2001). However surveys in several countries show that SMEs have been slower to adopt e-commerce than their larger counterparts, but the rate of Internet usage in SMEs is growing quite rapidly (Damaskopoulos, 2003). Since the required minimal investment for starting and running an e-commerce web site decreases dramatically over the last few years more SME’s transfer their businesses to the internet or continue to act on both sides. Especially after the development and great improvements of the open source software’s like OsCommerce, which has attracted a large growing e-commerce community that consists of over 222,900 store owners and over 5,700 add-ons that are available for free to customize users especially for SME’s online stores. (www.osCommerce.com). Also there are other open source software programs can be used by SME’s like openoffice: a fully functional office applications, gimp: a very useful graphic deployment and editing tool, NVU: a powerful WYSIWYG HTML editor and many more. Open source software solves the problem on the investment on high licensing fees for starting the e-business on the contrary it becomes with the need for training and education. Since most of these software packages are not widely used widely like the commercial software’s SME’s needs sufficient training both theoretical and practical information for the management and running of e-commerce sites. These open source applications gives you the tools but if SME’s don’t know how to use the tools in the appropriate way their e-commerce sites will fail in the near future. The Study The aim of this paper is to introduce an already known terminology in different parts of economy simulations like business games and virtual simulations in the field of e-commerce especially for the SME’s training. The web-based application present users the real world business scenarios and challenges them to come up with solutions that achieve bottom-line results (Hill, 2009). The “Virtual Commerce” Simulation Game The “Virtual Commerce” Simulation Game is a multi-player web based management game developed by Istanbul Commerce University Computer Engineering Department. The game methodology is based on the Angelides and Paul’s prototype intelligent gaming-simulation environment and twelve elements which are also used by Hoogeweegen et al. (2006). These elements are: (1) Scenario, (2) Pulse, (3) Cycle Sequence, (4) Steps of Play, (5) Rules, (6) Roles, (7) Models, (8) Decision sequence and linkage, (9) Accounting System, (10) Indicators, (11) Symbology. (1) Scenario The scenario of the simulation game based on the virtual market and the companied started virtually by the participants of the training. Each virtual company owns a e-commerce site based on the templates of the system. Participants select their company logos, names and all technical details such as their mission, vision, consumer rights and quality procedures, as real as possible to start their business on the virtual environment. The technical level of fulfilling this stages does not require IT expertise so ordinary internet users can simply fill in and update data. In order to work with the virtual-commerce environment, participants have taken a preliminary course of nine hours which include the basics of internet terminology and structure. As can be seen from Figure 1 every participant has its own link and company logo. Figure 1. Virtual Commerce Market Place on Web (2) Pulse Pulse refers to an event or problem introduced during the course of the play to trigger the players to react, which is to analyze the situation, decide what to do, take action and monitor feedback to check whether the decision(s) lead to the desired outcome (Hoogeweegen et al., 2006). There are two common types of pulses in the system, static and dynamic ones. The static ones already known by the administrators of the game before the simulation starts like small economical crises, the decrease and increase in the currency ratios, however the dynamic ones will be decided by the administrators during simulation cycles depending on the actions of the participants. There are two types of major pulses in the system. The first one related with the sales or sale related pulses such as purchase, price, negotiation or campaign details coming from the administrator, the system itself as random purchases and also coming from the other participants. Thus the system simulates the real environment as much as possible. Since the number of participants limited to the class of 15 companies, administrator creates unique or well known issues which may not be created by the participants or the random system. (3) Cycle Sequence Cycle sequences of the system are parallel to the theoretical and practical trainings and lecture hours. Most common every lecture day is the beginning of new cycle and the results of the simulation will be collected at the beginning of the next lecture day and it will be announced to the participants. However since the virtual environment continues to live all the time some events and actions runs on 7/24 basis like real world e-commerce sites. The overall training session lasts approximately one month starting from the beginning of the preliminary courses. (4) Steps of Play Steps of play is to teach and apply to the participant how to use and play with the system. The first steps simulated in the classroom and then daily and weekly assignments given as minimum number of products to be entered to system, campaign products, number payments, purchases or searches for suitable products from the other sites. (5) Rules There are some basic rules in the virtual commerce marketplace, every participant has two roles one role is having a e-commerce site as supplier and one role as a customer that have to spend fixed amount of virtual money in the system by buying from the other participants sites. The ratios of the goods that can be taken from the other sides have some rules in order to satisfy the balance. There are also some limitations about the e-commerce site properties like the maximum rate of discount, number of discount products and the amount of money to spend on the web advertisements to increase the sales. (6) Roles As told before there are three types of roles, system administrators, participants as customers, participants as e-commerce site owners. (7) Models Models describe the logical modeling of processes and parameters used to simulate a particular industry within the game as realistically as possible. Possible usage of the virtual commerce system is available for B2B (Business to Business) and B2C (Business to Consumer) models. Since the systems does not include virtual money transfer between clients, auction and bidding system its not suitable for C2C (Consumer to Consumer) and C2B (Consumer to Business) models. Figure 2. Virtual Commece Prototype Web Site According to the model chosen they have a hierarchical tree type product menu with categories, sub categories and so on. They have the opportunity to set different marketing models like the new entries, discounts, most sold ones and most required ones as can be seen from Figure 2. (8) Decision sequence and linkage Expected usage of the system is based on the correct strategy on how to sell the goods and how to promote them wisely. Good management and promotions will get more sales, since there are always be a fixed amount of money that should be flow within the market by the customer roles of the participants, (9) Accounting System All participants have their accounting balances according to their roles; they can easily see and report their savings, incomes and payments. The virtual-commerce system has a virtual credit card payment system which all the participants has a virtual credit card with a initial balance as in their customer role. Figure 3. Administration User Interfaces (10) Indicators Indicators are the main aspects of the accounting system which all the transfers controlled and observed by the system operators. These include the total amount of the market, sales, searches, products in the market. (11) Symbology Symbology is basically the user interfaces of the system, which has been developed by ASP.NET technologies and MS SQL 2005 Server database in the data side. System works on Microsoft Windows IIS on Windows 2008 Server. Administration and user interfaces designed with Visual Studio VB.NET. Methodology Participants and procedures The study used the case study approach using a survey to analyze the effects and success of simulation game in addition to classroom lectures. 30 SME’s taking the E-Commerce Technical background training as in two groups were selected as the study’s population. They were all from the different types of markets such as sports equipments, medical equipment and supplementary, HVAC equipments, candy and cookies, car and vehicle products, software, sanitary and cleaning agents, hobby products, gifts , electronics, satellite systems, printing and color transfer and construction materials. So the participants forms a real marketing environment. Instruments Beside the outcomes of the virtual commerce usage statistics also a personal and company information form attached to a questionnaire was used for the outcomes of the system. Personal and company information form asks the necessary information about the details of SME and the participant. The results and effects of each cycle data in the simulation collected from the participants. Before and after assumptions on running an e-commerce site is also analyzed. Since the reason behind the failed or unsuccessful e-commerce sites mostly due to underestimation or overestimation of what should have been done and what has been done during the operation. Results and Discussion The expected result from this study is to figure out the effects of virtual simulation game in the training of SME’s in the field of e-commerce. Since the subject is mostly based on web technologies classroom training will be supported with the online simulation of what they’ve learned during the training. One good outcome of the study is to give the participant the real time responsibility of owning a e-commerce site without risking the brand and money of the SME. Since the number of participants is not sufficient enough for valid and high confidence level of results only basic answers given as results of the system. For further work the system will tested on different participants in the future. According to the survey results 76% of the participants found that the virtual commerce system helps them to understand and learn better than traditional methods as they expected before the training. 15 % of the participants do not see any major difference with the given system whereas these are the participants with more technical background and much more familiar with e-commerce and internet applications. 86% of the participants said they will improve and change their plans and human resources to their future e-commerce system after their experiences with virtual commerce system. 20 % of the participants start actually working on their e-commerce projects within one week after the training with outsourced companies. As a result of these answers and feedbacks its found that virtual commerce system improves the training process for e-commerce especially for SME’s. References Angelides, M.C., & Paul, R.J. (1999). 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