E - Commerce

E-Commerce
Study Material
For
BBA -III YEAR
Course Instructor:Dr.Himanshu Saxena
(MBA,Ph.d,NET)
SUPER HOUSE MANAGEMENT SERVICES
PVT. LTD.
Head Office:
69/310,V.T.Road,Mansarovar,Jaipur.
Ph: 9829150137
SUPERHOUSE MANAGEMENT SERVICES PVT. LTD. PH: 9829150137 [1]

UNIT-I
e-commerce: Meaning, Characteristics, Advantages and Disadvantages

E-Commerce or Electronic Commerce means buying and selling of goods, products,
or services over the internet. E-commerce is also known as electronic commerce or
internet commerce. These services provided online over the internet network.
Transaction of money, funds, and data are also considered as E-commerce.
These business transactions can be done in four ways: Business to Business (B2B),
Business to Customer (B2C), Customer to Customer (C2C), Customer to Business
(C2B). The standard definition of E-commerce is a commercial transaction which is
happened over the internet. Online stores like Amazon, Flipkart, Shopify, Myntra,
Ebay, Quikr, Olx are examples of E-commerce websites. By 2020, global retail e-
commerce can reach up to $27 Trillion.
E-commerce is a popular term for electronic commerce or even internet commerce.
The name is self-explanatory, it is the meeting of buyers and sellers on the internet.
This involves the transaction of goods and services, the transfer of funds and the
exchange of data.
So when you log into your Amazon and purchase a book, this is a classic example of
an e-commerce transaction. Here you interact with the seller (Amazon), exchange
data in form of pictures, text, address for delivery etc. and then you make the
payment.
Characteristics of E-Commerce
E-commerce is characterized by the following features:
(i) The business tools are electronic and the application is commerce, i.e. profit
motive.
(ii) Business is externally focused on those with whom business is conducted.
(iii) Most of the transactions are processed automatically.
(iv) Uses a gamut of business support services, such as inter-organizational e-mail
and on-line directories.
Examples of E-Commerce
• Amazon
• Flipkart
• eBay
• Fiverr
• Upwork
• Olx
• Quikr

Advantages of e-commerce
• E-commerce provides the sellers with a global reach. They remove the barrier
of place (geography). Now sellers and buyers can meet in the virtual world,
without the hindrance of location.
• Electronic commerce will substantially lower the transaction cost. It
eliminates many fixed costs of maintaining brick and mortar shops. This
allows the companies to enjoy a much higher margin of profit.
• It provides quick delivery of goods with very little effort on part of the
customer. Customer complaints are also addressed quickly. It also saves time,
energy and effort for both the consumers and the company.
• One other great advantage is the convenience it offers. A customer can shop
24×7. The website is functional at all times, it does not have working hours
like a shop.
• Electronic commerce also allows the customer and the business to be in touch
directly, without any intermediaries. This allows for quick communication and
transactions. It also gives a valuable personal touch.
Disadvantages of e-commerce
• The start-up costs of the e-commerce portal are very high. The setup of the
hardware and the software, the training cost of employees, the constant
maintenance and upkeep are all quite expensive.
• Although it may seem like a sure thing, the e-commerce industry has a high
risk of failure. Many companies riding the dot-com wave of the 2000s have
failed miserably. The high risk of failure remains even today.
• At times, e-commerce can feel impersonal. So it lacks the warmth of an
interpersonal relationship which is important for many brands and products.
This lack of a personal touch can be a disadvantage for many types of services
and products like interior designing or the jewelry business.
• Security is another area of concern. Only recently, we have witnessed many
security breaches where the information of the customers was stolen. Credit
card theft, identity theft etc. remain big concerns with the customers.
• Then there are also fulfillment problems. Even after the order is placed there
can be problems with shipping, delivery, mix-ups etc. This leaves the
customers unhappy and dissatisfied.
Types of e-commerce Models:Electronic commerce can be classified into four

main categories. The basis for this simple classification is the parties that are
involved in the transactions. The 4 basic electronic commerce models are as follows,
1. Business to Business:This is Business to Business transactions. Here the

companies are doing business with each other. The final consumer is not
involved. So the online transactions only involve the manufacturers,
wholesalers, retailers etc.
2. Business to Consumer:Business to Consumer. Here the company will sell

their goods and/or services directly to the consumer. The consumer can
browse their websites and look at products, pictures, read reviews. Then they
place their order and the company ships the goods directly to them. Popular
examples are Amazon, Flipkart, Jabong etc.

3. Consumer to Consumer:Consumer to consumer, where the consumers are
in direct contact with each other. No company is involved. It helps people sell
their personal goods and assets directly to an interested party. Usually, goods
traded are cars, bikes, electronics etc. OLX, Quikr etc follow this model.
4. Consumer to Business:This is the reverse of B2C, it is a consumer to

business. So the consumer provides a good or some service to the company.
Say for example an IT freelancer who demos and sells his software to a
company. This would be a C2B transaction.
Origin of e-commerce
One of the most popular activities on the Web is shopping. It has much allure in it
one can shop at leisure, anytime. Literally anyone can have their pages built to
display their specific goods and services. History of ecommerce dates back to the
invention of the very old notion of “sell and buy”, electricity, cables, computers,
modems, and the Internet. Ecommerce became possible in 1991 when the Internet
was opened to commercial use. Since that date thousands of businesses have taken
up residence at web sites.
At first, the term ecommerce meant the process of execution of commercial
transactions electronically with the help of the leading technologies such
as Electronic Data Interchange (EDI) and Electronic Funds Transfer
(EFT) which gave an opportunity for users to exchange business information and do
electronic transactions. The ability to use these technologies appeared in the late
1970s and allowed business companies and organizations to send commercial
documentation electronically.
Although the Internet began to advance in popularity among the general public in
1994, it took approximately four years to develop the security protocols (for example,
HTTP) and DSL which allowed rapid access and a persistent connection to the
Internet. In 2000 a great number of business companies in the United States and
Western Europe represented their services in the World Wide Web. At this time the
meaning of the word ecommerce was changed. People began to define the term
ecommerce as the process of purchasing of available goods and services over the
Internet using secure connections and electronic payment services. Although the dot-
com collapse in 2000 led to unfortunate results and many of ecommerce companies
disappeared, the “brick and mortar” retailers recognized the advantages of electronic
commerce and began to add such capabilities to their web sites (e.g., after the online
grocery store Webvan came to ruin, two supermarket chains, Albertsons and
Safeway, began to use ecommerce to enable their customers to buy groceries online).
By the end of 2001, the largest form of ecommerce, Business-to-Business (B2B)
model, had around $700 billion in transactions.
According to all available data, ecommerce sales continued to grow in the next few
years and, by the end of 2007, ecommerce sales accounted for 3.4 percent of total
sales.Ecommerce has a great deal of advantages over “brick and mortar” stores and
mail order catalogs. Consumers can easily search through a large database of
products and services. They can see actual prices, build an order over several days
and email it as a “wish list” hoping that someone will pay for their selected goods.
Customers can compare prices with a click of the mouse and buy the selected product
at best prices.

Online vendors, in their turn, also get distinct advantages. The web and its search
engines provide a way to be found by customers without expensive advertising
campaign. Even small online shops can reach global markets. Web technology also
allows to track customer preferences and to deliver individually-tailored marketing.
History of ecommerce is unthinkable without Amazon and Ebay which were among
the first Internet companies to allow electronic transactions. Thanks to their
founders we now have a handsome ecommerce sector and enjoy the buying and
selling advantages of the Internet. Currently there are 5 largest and most famous
worldwide Internet retailers: Amazon, Dell, Staples, Office Depot and Hewlett
Packard. According to statistics, the most popular categories of products sold in the
World Wide Web are music, books, computers, office supplies and other consumer
electronics.
Amazon.com, Inc. is one of the most famous ecommerce companies and is located in
Seattle, Washington (USA). It was founded in 1994 by Jeff Bezos and was one of the
first American ecommerce companies to sell products over the Internet. After the
dot-com collapse Amazon lost its position as a successful business model, however,
in 2003 the company made its first annual profit which was the first step to the
further development.
At the outset Amazon.com was considered as an online bookstore, but in time it
extended a variety of goods by adding electronics, software, DVDs, video games,
music CDs, MP3s, apparel, footwear, health products, etc. The original name of the
company was Cadabra.com, but shortly after it become popular in the Internet Bezos
decided to rename his business “Amazon” after the world’s most voluminous river. In
1999 Jeff Bezos was entitled as the Person of the Year by Time Magazine in
recognition of the company’s success. Although the company’s main headquarters is
located in the USA, WA, Amazon has set up separate websites in other economically
developed countries such as the United Kingdom, Canada, France, Germany, Japan,
and China. The company supports and operates retail web sites for many famous
businesses, including Marks & Spencer, Lacoste, the NBA, Bebe Stores, Target, etc.
Amazon is one of the first ecommerce businesses to establish an affiliate marketing
program, and nowadays the company gets about 40% of its sales from affiliates and
third party sellers who list and sell goods on the web site. In 2008 Amazon
penetrated into the cinema and is currently sponsoring the film “The Stolen Child”
with 20th Century Fox.
According to the research conducted in 2008, the domain Amazon.com attracted
about 615 million customers every year. The most popular feature of the web site is
the review system, i.e. the ability for visitors to submit their reviews and rate any
product on a rating scale from one to five stars. Amazon.com is also well-known for
its clear and user-friendly advanced search facility which enables visitors to search
for keywords in the full text of many books in the database.
One more company which has contributed much to the process of ecommerce
development is Dell Inc., an American company located in Texas, which stands third
in computer sales within the industry behind Hewlett-Packard and Acer.
Launched in 1994 as a static page, Dell.com has made rapid strides, and by the end of
1997 was the first company to record a million dollars in online sales. The company’s
unique strategy of selling goods over the World Wide Web with no retail outlets and

no middlemen has been admired by a lot of customers and imitated by a great
number of ecommerce businesses. The key factor of Dell’s success is that Dell.com
enables customers to choose and to control, i.e. visitors can browse the site and
assemble PCs piece by piece choosing each single component based on their budget
and requirements. According to statistics, approximately half of the company’s profit
comes from the web site.
In 2007, Fortune magazine ranked Dell as the 34th-largest company in the Fortune
500 list and 8th on its annual Top 20 list of the most successful and admired
companies in the USA in recognition of the company’s business model.
History of ecommerce is a history of a new, virtual world which is evolving according
to the customer advantage. It is a world which we are all building together brick by
brick, laying a secure foundation for the future generations.
Process of e-commerce
Selling online has become easily possible nowadays. In fact, it has become one of the
most popular platforms people prefer buying from. If you plan to start a business of
your own, and wondering how to go about it, then this post will help you learn the
complete e-Commerce Selling Process. Follow the steps as mentioned, and to the
end, you’ll be done.
Step #1: Give your business a name – Register it
The first and foremost requirement is to give business an identity in terms of a name.
The name is something the audience will recognize the business with. Thus, choosing
a good name is imperative. Once a name is selected, make sure to register it.
Registration is important because if someday someone else comes up in the market
with the same name, you will stand nowhere since you do not have proof that you
own that title. Moreover, one needs to comply with the registration as mandatory per
law. Thus, it is essential to get your business registered. Each state may have its own
policies; therefore, you may refer to your respective state policies for registration.
Step #2: Create a domain name and a website – Register as a seller
Once you are registered, either create your own website using a hosting platform or
register as a seller. There are two different possibilities you might want to opt, i.e.
Register as a seller on popular websites like Amazon, and eBay OR start your own e-
commerce business by buying space at popular sites such as Shopify, BigCommerce,
etc.The other possibility that arises when you want to set your own e-commerce store
is to build a website using web hosting platforms and register your domain.For
example, buy a domain for the e-commerce platform through WordPress and install
plugins that help you set up your business and sell online. Registering as a seller on
e-commerce platforms is the easiest way to start selling.
The complexity level increases when you opt for platforms to open up your own
store. However, the primary benefit here is that you have your own store where you
can sell unlike being just a seller on other e-commerce platforms.The most
complicated method is to create a new website altogether to start a business.
However, if you plan to do business on a massive scale, it is the optimum choice to
make.

Step #3: Upload Products
Once you’ve chosen where you want to sell and have a space to upload your stock,
you may now start uploading high-quality images of your products.
Give them a name and mention their price. If you are into selling various categories
of products, make sure to categorize them. This makes the website look neater and
easy to use for the customer.
Give the products a suitable description that is easy to understand and explains each
and every feature of the product.
When doing business online, your interaction with customers is not direct. The
customer cannot touch and feel the product physically. Thus, in order to succeed
despite the demerit, it is important to explain each and everything about the product
through descriptions.
Step #4: Use SEO
In order to get your website or listed products to rank on top of the Google search
results, it is essential to have relevant keywords in the content.
For example, if a person is looking out for a juicer, and you have it as one of your
products, then make sure your product title has the word juicer. This will help the
search engines identify that you have the same thing that the buyer is looking for and
will list your products on the top.
Similarly, make sure that the description along with being informative and easy to
read, is also SEO optimized.
Step #5: Choose your shipping method
The next and most important thing is to choose a shipping strategy. Make sure you
connect with only famous shipping companies who can make sure that they will
deliver your product timely without any damage.
Final words
You are all set to start selling. You have an e-commerce store, have your shipping
planned and the products are listed. Now the buyers will simply have to click on the
buy now option, make payments through the payment gateway you’ve opted for and
buy your product. In order to attract more customers, use all the digital marketing
tactics and take your business to greater heights.
Key Drivers of E-Commerce: Following are the key drivers of e-commerce:-
1. Make sure your e-commerce efforts are in sync with corporate
goals
• Have a clear understanding of company’s overall growth objectives.

• Have a clear understanding of company’s branding and marketing objectives.
• Have a clear understanding of company’s target customers and demographics.
• Have a clear understanding of company’s products/margins which product
sales move the bottom line needle the most.
• Have a clear understanding of company’s financial targets (revenues, margins,
ROI).

2. Omni-channel design/customer of one
• You are not building a website in isolation from other customer channels
break down divisional silos.
• All decisions should be made with a customer-centric mindset.
• Allow customers to shop where, how and when they choose, anytime and
anyplace.
• This means integrating all website, mobile, store, call center systems, etc.
• This means tailoring offering and messaging down to the person-by-person
basis.
3. Driving new users to the site
• Determine the proper marketing plan that works within your budgets.
• Bias online marketing as most trackable and one-click away from your site.
• Constantly test and iterate all offers and creative strategies used to maximize
engagement.
• Drive traffic to specific product landing pages, which should be unique and
tested.
• Have a clear understanding of the keywords that matter most for your
business and optimize your site for SEO and PPC efforts.
• Cross-promote e-commerce capabilities across all channels of your business.
• Cross-promote e-commerce links across within all other channel marketing.
• Leverage the power of social media maintain and promote your own profile
pages on major social networks (e.g., Facebook, Twitter, Pinterest) and allow
for social sharing from all product pages and conversational
communications/viral marketing therefrom.
4. Getting existing users more engaged
• Continually optimize and fine-tune the product/pricing offering to match

demand.
• Maintain consistent communication with customers via monthly newsletters
or other means.
• Create loyalty programs that reward increased spending with increased
rewards.
• Allow customers to create wishlists that they can send to their friends and
family.
• Tailor product offers to specific customer profile data.
• Optimize upselling and cross-selling techniques (e.g., promote related items
and “people who bought this, also bought that” functionality).
• Use machine learning techniques to keep a “memory” of user behaviors in
session and over time to allow for behavioral targeting.
• Use targeted pull back ads after a user leaves the site without buying
• Employ automated repurchase reminders for things that need to be replaced
over time
• Opt customers into company newsletters during the time of e-commerce
purchases.

5. Website Design/Functionality
• It needs a clear and simple way to navigate the site (e.g., think “one click”
away).
• Constantly test page layouts to increase user engagement, using eye pattern
heat maps, user mouse tracking or otherwise.
• Constantly test shopping cart flow to limit abandon rates.
• Study all abandon rates to figure out why customers end up not buying—and
address such concerns.
• Leverage video where you can, as it is much more effective than static images
and text in terms of driving engagement.
• Leverage the reviews and feedback of other customers who bought same
items.
6. Fulfillment/customer service
• Offer two-way free shipping for orders over a certain size (e.g., $50) don’t give
users any reason not to buy.
• Offer no-hassle customer satisfaction guarantees for a full refund if they are
not satisfied for any reason.
• Provide clear communication on all shipping-related issues (e.g., time to ship,
expected arrival dates) with opportunities to get overnight, if needed.
• Provide the ability to check inventory online for items available in the stores
for same day pickup.
• Simple credit card processing online and the ability to collect payment
information via phone.
• Allow returns either via mail or direct to the stores.
• Consider kiosk or tablet-based opportunities and services within the stores.
7. CRM/BIG DATA
• Invest in customer CRMs as a central repository to track all client profile,

preferences, sales and social media history behavior.
• Invest in big data analytics technology to make sense of the fire hose of data
available.
• The future of marketing is moving toward person-by-person targeting of
products, offers and messaging based on their past behaviors and profile
preferences. It is no longer mass-marketing of the same messaging to all.
• Study cross-channel behaviors to learn how customers prefer to engage with
the company (e.g., they researched first online but bought in the store, or vice
versa).
• Test, test and retest all marketing activities and look to sharpen efforts with
each iteration.
8. Mobility
• The PC market is actually declining, while the mobile market is exploding—

you need to have native mobile apps built for each major platform (e.g., Apple,
Android), or a mobile friendly touch site.

• Take advantage of mobile locations of your customers with targeted offers and
services related to their exact location (e.g., “Check out our new store near
your location,” “here are local restaurant deals to go with your recent movie
tickets purchase,” “here is our mobile mapping app to go with your new car”).
Elements of e-commerce
Online shopping is mainstream. Everyone does it and in lieu of recent in-store credit
card security issues, it’s often viewed as more secure than going to a retail store or
giving your credit card to a random customer service rep on the phone.
Trust in online shopping is not an issue anymore. The issue is getting your visitors to
shop on your website over a competitor’s. In order to capture your audience and
make the sales, your e-commerce website needs to be current and implement several
very important elements. Here are seven things to consider when developing or
restructuring your e-commerce site:
1. User Friendly
If your store is easy to navigate, you will have a greater chance of making a sale from
the start. The homepage should be inviting and encourage visitors to click on
products or categories of items they are looking to purchase. Categories should be
self-explanatory and should be broken down into subcategories so visitors can
quickly find what they are looking for.
The search bar should be easy to find and quickly list all applicable items that are
currently available for sale once the user types in their query.
2. Shopping Cart and Checkout Process
Adding items to the shopping cart should be simple. Color choices or style
preferences should be easy to view and select. Customers like to view what they have
in their cart while continuing to shop, so make sure you have a design and
functionality that makes it easy.
Don’t confuse users during checkout. Keep things basic and value your customer’s
time. The shopper should feel confident shopping on your website.
3. Mobile Compatibility
80% of all online adults own a smartphone. Mobile visits, in many cases now,
outrank desktop use. Your e-commerce site needs to be designed and built for all
devices, not just a personal computer or laptops.
4. Calls to Action (CTA)
Make sure to lead your customers through your site with calls to action that are
specific to what you want them to do. For example, if you have a sale, your CTA
button could be “Click Here to Save 20%!” It may be obvious to you and even to most
people, but there are still a lot of people out there that have lives, raised kids or are
raising kids, own or run businesses that don’t spend much time on the web. Adding

that extra help builds confidence in your business, shows that you care about your
customers and helps to make things less frustrating. Always avoid making your
customer feel stupid because they not. If they are going to your website they must be
smart enough to buy from the best company out there.
5. Images and Descriptions
When people are searching for a product to buy, they want to know all the details
about it before making their purchase.
Shopping online can have it’s drawbacks because one cannot physically see or touch
the items they are looking at. Because of this, it’s important to have professional
quality images of your products and when applicable images from multiple angles,
views, and even context.
It is also important to thoroughly describe the items in detail. Cover all aspects,
including size, texture, uses, benefits, colors available, etc. You want your potential
customer to feel confident that they know enough about your product to purchase it,
instead of going elsewhere.
6. Customer Support
Some sort of customer support needs to be available in case of any problems or

questions. There are several different types of customer support, such as 800
numbers, email support, and online chat. Decide which is the best choice for your
budget and type of business. Keep in mind to always be friendly and respond in a
timely manner to resolve any issues to keep your customers happy.
7. Security and Privacy
Last but not least is security. Make sure you have an SSL certificate installed to
encrypt data coming and going to the browser. Today every website, e-commerce or
not, should have one. Also, have a transparent privacy policy that tells your
customers how their information is used on your site and by your company.
An e-commerce site needs to not only pleasing to the eye but a stress-free shopping
experience as well. By developing an online store that is easy to navigate along with a
seamless checkout process on any device, you will retain your customers and expand
your business by acquiring new ones.

Traditional Commerce Vs E- Commerce
Gone are the days when the commercial activities like the exchange of goods and
services for money, between parties, takes place only in the traditional mode, i.e. the
customer has to go to the market, look at the variety of products, choose the required
stuff and the purchasing them by paying the specified amount. But with the advent of
e-Commerce, people can buy goods, pay bills, or transfer money in just one click.
Many people, still prefer traditional commerce over e-Commerce, due to their dogma
that the latter is not safe, however, this is just a myth. Both modes have their pros
and cons, so we have simplified you the difference between traditional commerce and
e-Commerce.
Traditional Commerce
Traditional Commerce or Commerce is a part of business, which encompasses all
those activities that facilitate exchange. Two kinds of activities are included in
commerce, i.e. trade and auxiliaries to trade. The term trade refers to the buying and
selling of goods and services for cash or kind and auxiliaries to trade, implies all
those activities like banking, insurance, transportation, advertisement, insurance,
packaging, and so on, that helps in the successful completion of exchange between
parties.
In finer terms, commerce encompasses all those activities that simplify the exchange
of goods and services, from manufacturer to the final consumer. When the goods are
produced, it does not reach to the customer directly rather it has to pass from various
activities, which are included under commerce. Its main function is to satisfy the
wants of consumers by making goods available to them, at the right time and place.
E-Commerce
E-Commerce or electronic commerce refers to the exchange of goods and services,
funds or information, between businesses and consumers using the electronic
network, i.e. internet or online social network. e-Commerce means trading and
providing assistance to trading activities, through the use of the electronic medium,
i.e. all the activities like purchasing, selling, ordering and paying are performed over
the internet. The scope of e-commerce is discussed in the following points:
• B2B commerce: When the business transaction takes place between two
business houses, through the electronic channel, it is called B2B commerce.
• B2C commerce: When the exchange of goods and service takes place
between the business entity and the customer, over the internet, then it is
known as B2C commerce.
• C2C commerce: When the buying and selling of goods and services take
place between customers using electronic medium, then it is called C2C
commerce
• Intra-B commerce: When the exchange occurs within the firm or business
house, with the use of electronic media, it is called as Intra B-commerce.

Comparison
Traditional Commerce E-Commerce

Traditional commerce is a E-Commerce means
branch of business which carryng out commercial
focuses on the exchange of transactions or
Meaning products and services, and exchange of
includes all those activities information,
which encourages exchange, in electronically on the
some way or the other. internet.
Processing of
Manual Automatic
Transactions
Accessibility Limited Time 24×7×365
Goods cannot be
Goods can be inspected
Physical inspection. inspected physically
physically before purchase.
before purchase.
Customer
Face-to-face Screen-to-face
interaction
Scope of
Limited to particular area. Worldwide reach
business
Provides a uniform
Information No uniform platform for
platform for
exchange exchange of information.
information exchange.
Resource focus Supply side Demand side
Business
Linear End-to-end
Relationship
Marketing One way marketing One-to-one marketing
Credit card, fund
Payment Cash, cheque, credit card, etc.
transfer etc.
Delivery of goods Instantly Takes time

The following points are noteworthy so far as the difference between traditional
commerce and e-commerce is concerned:
1. A part of business, that focuses on the exchange of products and services, and
includes all those activities which encourage exchange, in some way or the
other, is called traditional commerce. e-Commerce means carrying out
commercial transactions or exchange of information, electronically on the
internet.
2. In traditional commerce, the transactions are processed manually whereas, in
the case of e-commerce, there is automatic processing of transactions.
3. In traditional commerce, the exchange of goods and services, for money can
take place, only during working hours. On the other hand, in e-commerce, the
buying and selling of goods can occur anytime.
4. One of the major drawbacks of e-commerce is that the customers cannot
physically inspect the goods before purchase, however, if customers do not
like the goods after delivery they can return it within the stipulated time.
Conversely, in traditional commerce physical inspection of goods is possible.
5. In traditional commerce, the interaction between buyers and sellers is direct,
i.e. face to face. As against this, there is indirect customer interaction, in the
case of e-commerce, because it may be possible that the customer is miles
away from where they place an order for the purchase of goods.
6. The scope of business in traditional commerce is limited to a particular area,
i.e. the reach of business is limited to the nearby places where it operates. On
the contrary, the business has worldwide reach in case of e-commerce, due to
its ease of access.
7. As there is no fixed platform for information exchange in traditional
commerce, the business has to rely on the intermediaries for information
fully. Unlike e-Commerce, wherein there is a universal platform for
information exchange, i.e. electronic communication channel, which lessen
the dependency on persons for information.
8. Traditional commerce is concerned with the supply side. In contrast, the
resource focus of e-commerce is the demand side.
9. In traditional commerce, the business relationship is vertical or linear, while
in the case of e-commerce there is directness in command leading to a
horizontal business relationship.
10. In traditional commerce, due to standardisation, there is mass/one way
marketing. However, customization exists in e-commerce leading to one to
one marketing.
11. Payment for transactions can be done by paying cash, cheque or via credit
card. On the other hand, payment in e-commerce transactions can be done
through online payment modes like credit card, fund transfer, etc.
12. The delivery of goods is immediate in traditional commerce but in the case of
e-commerce, the goods are delivered at the customer’s place, after some time,
usually within a week.

Benefits of e-commerce
1. Overcome Geographical Limitations
If you have a physical store, you are limited by the geographical area that you can
service. With an e-commerce website, the whole world is your playground.
Additionally, the advent of m-commerce, i.e., e-commerce on mobile devices, has
dissolved every remaining limitation of geography.
2. Gain New Customers with Search Engine Visibility
Physical retail is driven by branding and relationships. In addition to these two
drivers, online retail is also driven by traffic from search engines. It is not unusual for
customers to follow a link in search engine results and land on an e-commerce
website that they have never heard of. This additional source of traffic can be the
tipping point for some e-commerce businesses.
3. Lower Costs
One of the most tangible positives of e-commerce is the lowered cost. A part of these
lowered costs could be passed on to customers in the form of discounted prices. Here
are some of the ways that costs can be reduced with e-commerce:
• Advertising and marketing: Organic search engine traffic, pay-per-click,

and social media traffic are some of the advertising channels that can be cost-
effective.
• Personnel: The automation of checkout, billing, payments, inventory
management, and other operational processes lowers the number of
employees required to run an e-commerce setup.
• Real estate: This one is a no-brainer. An e-commerce merchant does not
need a prominent physical location.
4. Locate the Product Quicker
It is no longer about pushing a shopping cart to the correct aisle or scouting for the
desired product. On an e-commerce website, customers can click through intuitive
navigation or use a search box to narrow down their product search immediately.
Some websites remember customer preferences and shopping lists to facilitate repeat
purchase.
5. Eliminate Travel Time and Cost
It is not unusual for customers to travel long distances to reach their preferred
physical store. E-commerce allows them to visit the same store virtually, with just a
few mouse clicks.
6. Provide Comparison Shopping
E-commerce facilitates comparison shopping. There are several online services that
allow customers to browse multiple e-commerce merchants and find the best prices.
7. Enable Deals, Bargains, Coupons, and Group Buying
Though there are physical equivalents to deals, bargains, coupons, and group buying,
online shopping makes it much more convenient. For instance, if a customer has a
deep discount coupon for turkey at one physical store and toilet paper at another, she

may find it infeasible to avail of both discounts. But the customer could do that
online with a few mouse-clicks.
8. Provide Abundant Information
There are limitations to the amount of information that can be displayed in a
physical store. It is difficult to equip employees to respond to customers who require
information across product lines. E-commerce websites can make additional
information easily available to customers. Most of this information is provided by
vendors and does not cost anything to create or maintain.
9. Create Targeted Communication
Using the information that a customer provides in the registration form, and by
placing cookies on the customer’s computer, an e-commerce merchant can access a
lot of information about its customers. It, in turn, can be used to communicate
relevant messages. An example: If you are searching for a certain product on
Amazon.com, you will automatically be shown listings of other similar products.
Also, Amazon.com may email you about related products.
10.Remain Open All the Time
Store timings are now 24/7/365. E-commerce websites can run all the time. From
the merchant’s point of view, this increases the number of orders they receive. From
the customer’s point of view, an “always open” store is more convenient.
11. Create Markets for Niche Products
Buyers and sellers of niche products can find it difficult to locate each other in the
physical world. Online, it is only a matter of the customer searching for the product
in a search engine. One example could be the purchase of obsolete parts. Instead of
trashing older equipment for lack of spares, today we can locate parts online with
great ease.
E-Commerce advantages can be broadly classified in three major
categories:
• Advantages to Organizations
• Advantages to Consumers
• Advantages to Society
Advantages to Organizations
• Using e-commerce, organizations can expand their market to national and

international markets with minimum capital investment. An organization can
easily locate more customers, best suppliers, and suitable business partners
across the globe.
• E-commerce helps organizations to reduce the cost to create process,
distribute, retrieve and manage the paper based information by digitizing the
information.
• E-commerce improves the brand image of the company.
• E-commerce helps organization to provide better customer services.
• E-commerce helps to simplify the business processes and makes them faster
and efficient.

• E-commerce reduces the paper work.
• E-commerce increases the productivity of organizations. It supports “pull”
type supply management. In “pull” type supply management, a business
process starts when a request comes from a customer and it uses just-in-time
manufacturing way.
Advantages to Customers
• It provides 24×7 support. Customers can enquire about a product or service

and place orders anytime, anywhere from any location.
• E-commerce application provides users with more options and quicker
delivery of products.
• E-commerce application provides users with more options to compare and
select the cheaper and better options.
• A customer can put review comments about a product and can see what others
are buying, or see the review comments of other customers before making a
final purchase.
• E-commerce provides options of virtual auctions.
• It provides readily available information. A customer can see the relevant
detailed information within seconds, rather than waiting for days or weeks.
• E-Commerce increases the competition among organizations and as a result,
organizations provides substantial discounts to customers.
Advantages to Society
• Customers need not travel to shop a product, thus less traffic on road and low
air pollution.
• E-commerce helps in reducing the cost of products, so less affluent people can
also afford the products.
• E-commerce has enabled rural areas to access services and products, which
are otherwise not available to them.
• E-commerce helps the government to deliver public services such as
healthcare, education, social services at a reduced cost and in an improved
manner.
Uses of Technologies of E-Commerce

Technological advancements have had a huge impact on the ecommerce world,
transforming the way consumers connect with brands and empowering them to shop
more cost effectively. Driven by the convenience of getting products delivered to your
doorstep, ecommerce has now become an integral part of everyday life.
Strategic plans, competitive marketing, and a skilled workforce aside, ecommerce
organizations are expected to remain up to date with the latest technologies. These
technological advancements have enabled people to meet their purchasing needs
with ease, and as a result, the ecommerce sector continues to go from strength to
strength.
Ecommerce is faster than ever and customers can get anything at the click of a
button, all thanks to the latest available technology. Now customers can track their

orders, find the best deals and much more besides. With all this progress, new
business opportunities are inevitably emerging.
1. Omni-channel presence/support
Modern shopping habits involve a process of cross-channel research, consideration,

and purchase. Indeed the statistics show that 90% of customers expect smooth
interactions across multiple channels and devices, highlighting the importance of
omnichannel readiness for today’s businesses.
Making use of the right technology means providing customers with not only what
they want when they want it, but where they want it too.
• Video Chat: Allows your business to interact face-to-face with customers

creating a personalized, cross-channel, visually demonstrative and
consultative experience.
• Cobrowsing: A visual engagement system bringing your agents and
customers together on the same page, at the same time, allowing agents to
seamlessly guide your customers through complex procedures.
• Screen Sharing: A method of interacting where your customers share their
screen with your agents to effortlessly resolve difficulties filling forms,
completing transactions, etc.
• Document Interaction: Provides a platform for your agents to interact with
your customers’ documents safely and includes e-signature technologies for
enhanced security.
These methods all help to ensure an interconnected customer journey all the way
through to purchase.
2. Extensive personalization
“The customer journey is changing. Consumers want everything, and they want it
immediately. Experience matters than anything else and the technology at our
fingertips enable such amazing experiences, only desired in today’s fast-paced
world.” :Sam Hurley
Personalization is the biggest trend in ecommerce right now. Consumers have come
to expect a relevant shopping experience based on their personal preferences. The
statistics show more than 78% of customers ignore offers that aren’t personalized or
based on their previous engagement with the brand. This shows just how important
personalization in marketing and customer support has become.
Effective personalization comes from understanding customers’ preferences and
behavior. Fortunately, technology has now evolved to provide precisely that level of
insight. The potential impact of ecommerce technology on your company is huge.
Nearly every user action online is captured and stored, creating a vast pool of
information known as big data. Artificial Intelligence (AI) and machine learning
analytics drive customer behavior patterns, whilst simultaneously interpreting this
data, meaning businesses are provided with a cycle of desires and expectations,
creating endless possibilities.
Big data, machine learning, and AI have made personalization the norm, with
businesses catering their support and services to reflect this.
3. The shift to mobile
Mobile platforms have increased in importance, so much so that m-commerce has
emerged as a concept in its own right.
• Failing to provide a mobile-oriented shopping experience will lose your brand

potential customers. Equipping yourself with mobile-friendly technology is
therefore crucial in maximizing your chances of future success.
• Ecommerce mobile apps: Apps offer customers continuous engagement
with your brand and the chance for your customers to familiarize themselves
with new and relevant purchasing opportunities.
• Location-based marketing: Use your customers’ geographical
whereabouts to market products relevant to their specific location.
• VR/AR guidance: Integrating VR and AR technologies provides an
immersive mobile shopping experience for your customers, connecting them
with your brand in a deeper and more meaningful way.
• Internet of Things (IoT): The IoT stems from the desire to better
understand consumer trends across a range of connected devices. The scope it
provides for delivering personalized mobile shopping experiences to your
customers is almost limitless.
4. Conversational Marketing
Traditional marketing channels flow in only one direction. The new concept of
conversational marketing has opened up two-way communication, creating
numerous opportunities for ecommerce success.
Getting information directly from customers makes more sense than attempting to
predict it. You can establish a personalized, real-time, one-on-one conversation on
the back of this, safe in the knowledge you truly understand your customers’ needs.
Below are some of the most efficient technologies for nurturing customer
conversations:
• Chatbots: Chatbots are excellent conversational marketing tools, capable of

handling multiple conversations at any one time. They provide your customers
with answers, drawing on knowledge pooled from multiple channels, whilst
maintaining a consistent tone for your brand.
• Live chat: Live chat allows your support teams to communicate with
customers through live messaging. You can initiate a preemptive chat
invitation to particular customers based on their behavior.
• Mobile messaging: Smartphones are another way for your business to reach
out to customers. With potential fatigue from the onslaught of promotional
emails, talk with them through mobile messaging apps instead.
5. AI and chatbots for customer communications

Artificial Intelligence plays an important role in everyday life, having a major impact
on how we live and work. There are several examples of AI and automation tools with
customer service applications for your business, including voice-powered assistants
such as Apple’s Siri, Google’s home and Amazon Echo. Research shows that 45% of
millennials are already using this type of voice activated search for online shopping.

Chatbots and virtual assistants represent the future for businesses. Some are already
integrating chatbots in their systems to improve their customers’ experience and
boost brand image.
With the help of Chatbots you can order food, check in luggage at the airport, book a
hotel room, schedule your flight, and get recommendations for almost anything you
can think of. The Starbucks chatbot for example gives customers details regarding
their order status, payment details etc.
6. Image search
Ecommerce businesses are integrating image search technology on their websites so
customers can easily photograph products they are interested in and find similar
examples on other sites that may be offering better deals.
Imagine someone sees a beautiful couch, but it costs too much for them. If your
business offers similar products at a more reasonable price, integrating image search
into your website will allow you to potentially pick up on this sale, creating an extra
revenue stream.
7. Quick and easy checkout processes
Cart abandonment is the most frustrating reason for losing a sale because it means a
user was considering buying your product, only to change their mind at the last
minute. The latest data shows a 79.17% global rate of cart abandonment, highlighting
how big a problem it is.
One of the main reasons customers abandon their carts is the checkout procedure
itself. No matter how well the lead has been nurtured, inefficient checkout processes
raise the chances your users will abandon their cart.
Therefore, if you want your ecommerce company to be successful, embrace
technology that provides quick and efficient checkout solutions, such as:
• Speedy mobile payment solutions, including Apple Pay and Android Pay.
• Enabling your customers to save card details, streamlining repeat purchases.
• Providing one-page, hassle-free checkouts.
• Offering a range of payment options.
Equipped with this technology, your business can alleviate any potential difficulties
customers may encounter at checkout.
e-commerce Models
e-commerce business models of all types are thriving. Sales from online stores are
expected to increase 78% by 2020.
It’s easy to get caught up and excited in the latest ecommerce trends, but unless you
know the fundamentals, you’ll hit a profitability wall without knowing it.
A booming ecommerce business takes intuition, knowledge of your market, a solid
business plan, and careful research into products and business models. But one of
the biggest hurdles most newcomers to the space face is easy to solve. Many would-
be ecommerce business owners just don’t know how ecommerce businesses are set
up and what different types of e-commerce are available to them.

Major Ecommerce Business Classifications
Electronic commerce encompasses all online marketplaces that connect buyers and
sellers. The internet is used to process all electronic transactions.
1. B2B: Business To Business Ecommerce
A B2B model focuses on providing products from one business to another. While
many businesses in this niche are service providers, you’ll find software companies,
office furniture and supply companies, document hosting companies, and numerous
other ecommerce business models under this heading.
B2B ecommerce examples you may be familiar with include the ExxonMobil
Corporation and the Chevron Corporation, Boeing, and Archer Daniel Midlands.
These businesses have custom, enterprise ecommerce platforms that work directly
with other businesses in a closed environment. A B2B ecommerce business typically
requires more startup cash.
2. B2C: Business to Consumer Ecommerce
The B2C sector is what most people think of when they imagine an ecommerce
business. This is the deepest market, and many of the names you’ll see here are
known quantities offline, too. B2C sales are the traditional retail model, where a
business sells to individuals, but business is conducted online as opposed to in a
physical store.
Examples of B2C businesses are everywhere. Exclusively online retailers include
Newegg.com, Overstock.com, Wish, and ModCloth, but other major B2C model
brick-and-mortar businesses like Staples, Wal-Mart, Target, REI, and Gap.
3. C2C E-commerce
B2B and B2C are fairly intuitive concepts for most of us, but the idea of C2C is
different. What does a consumer-to-consumer ecommerce business look like?
Created by the rise of the ecommerce sector and growing consumer confidence in
online business, these sites allow customers to trade, buy, and sell items in exchange
for a small commission paid to the site. Opening a C2C site takes careful planning.
Despite the obvious success of platforms like eBay and Craigslist, numerous other
auction and classified sites (the main arenas for C2C) have opened and quickly closed
due to unsustainable models.
4. C2B: Consumer To Business Ecommerce
C2B is another model most people don’t immediately think of, but that is growing in
prevalence. This online commerce business is when the consumer sells goods or
services to businesses, and is roughly equivalent to a sole proprietorship serving a
larger business.
Government / Public Administration Ecommerce
The models listed above are the primary ecommerce retail structures, but they aren’t
the only ones. Other types involve government/public administration conducting
transactions with businesses or consumers.

• B2G (also called B2A): for businesses whose sole clients are governments
or type of public administration. One example is Synergetics Inc. in Ft.
Collins, Colorado, which provides contractors and services for government
agencies.
• C2G (also called C2A): typically individuals paying the government for
taxes or tuition to universities.
Two sectors that are closed for entrepreneur owners but are growing include G2B for
government sales to private businesses, and G2C, for government sales to the general
public.
Mobile Commerce
Mobile commerce, also referred as m-commerce, is the use of wireless handheld
devices, such as cellular phones and laptops, to conduct commercial transactions
online. Mobile commerce transactions continue to grow, and the term includes the
purchase and sale of a wide range of products and services, such as online banking,
bill payment and information delivery.
Mobile commerce is founded upon the increasing adoption of electronic commerce.

The rapid growth of mobile commerce is being driven by a number of positive
factors, including the demand for applications from an increasingly mobile consumer
base; the rapid adoption of online commerce, thanks to the resolution of security
issues; and technological advances that have given wireless handheld devices
advanced capabilities and substantial computing power.
M-Commerce benefits for business

Surely, running a mobile app for ecommerce can’t be the sole guarantee of profit.
This is a great additional value tool to engage customers and offer experiences. Any
amount of investment to make an app, if done wisely, will be justified by loyal
customers. Also, check your competition if they have app, you should probably too.

Now we are going to name main advantages of m-commerce, with few practical
examples.
1. Faster purchases
Yes, many sites have mobile versions, though apps are generally 1.5 times faster
when loading data and search results on mobile devices. Moreover, there is no need
to pull data from a server and so customers can browse and purchase products faster.
As mobile ecommerce apps offer same functionality as desktop apps, people may
purchase items directly within an app.
M-commerce revenue has been rising at 30-40% rate annually since 2014, and by the
end of 2017 is expected to reach $150b total. The biggest retail app Amazon increased
number of customers from 43 million in 2015 to 67 million in 2016. The reason for
such achievements is intuitive mobile browsing, which in turn drives sales up.
2. Better customer experience
Because it matters. People are well familiar with how smartphones and tablets work,
so they already know how to navigate to desired products in few clicks. In addition to
purchases, customers can share their joy of bought goods with friends, or ask for
advice from community of shopaholics. Smooth customer experience equals better
conversion rates and revenue.
To reach these goals, your online shopping app should be:
• Fast
• Convenient
• Interactive
• Exclusive
3. Direct connection to customers (push notifications)
Shoppers get such alerts when they open a mobile app, and may get them even
without activating an app. 50% of users like notifications, and 80% of users say offers
and rewards make them more loyal to a brand. This is personal communication, if
you look at it from another angle, store to customer directly. Most of people perceive
informing about news or discounts as care, and they want exclusive stuff.
4. Deeper analytics
Knowing your customers equals prosperity in business these days. Knowing

customers demands data, at least very basic information like age, sex, location,
shopping history. Within your mobile app you may build and set user analytics of
various levels of sophistication. It depends on your business strategy and a budget
available to make an app. With such data you will understand your target audience
much better, and will be able to increase sales. Names, phone numbers, emails,
buying patterns and lots of other things in store. For instance, Walmart app that 22
million customers use every month, uses mobile data, online data and sales data
combined to deliver better customer experience. It is a whole and enormous
infrastructure.

5. Cost reduction and productivity
By reaching your audience faster with a mobile app you obviously cut down
marketing campaign costs. If an app has social media integration, users will do their
part too in spreading the word. You can even earn from placing ads within your app
later on.
6. Store navigation/geolocation
Mobile apps have a much better competitive (technical) in regard to marketing

opportunities. Front and back camera, scanning codes, positioning system for
location, compass, accelerometer, gyroscope and other build-in features can be used
for commercial purposes. One of the top benefits of m-commerce solutions is
navigating users to nearest stores in their vicinity via GPS.
Advantages of M-Commerce
1. Convenience
With just a few clicks on mobile devices, customers can already do shopping,
banking, download media files…and more than that. M-commerce also benefits
retailers by many of their outstanding features compared with responsive website
and mobile site.
2. Flexible Accessibility
User can be accessible via mobile devices and at the same time be accessible online
too through logging on to various mobile messengers and other networking
platforms. On the other hand, the user may also choose not to be accessible by
shutting down his mobile device, which at times can be a good thing.
3. Easy Connectivity
As long as the network signal is available, mobile devices can connect and do
commerce transactions not only mobile to mobile but also mobile to other devices.
No need for modem or WI-FI connectivity set up.
4. Personalization
Each mobile device is usually dedicated to a specific user so that it is personal. Users
can do whatever they want with their handheld devices: modify the wallpaper,
change view settings or modify contact information as you send emails or e-
payments.
5. Time Efficient
Doing M-Commerce transactions do not require the users to plug anything like
personal computer or wait for the laptop to load.

Emerging trens in Mobile APPS
1. Cloud Technology Finally Finds It’s Place
No surprises here. From the average consumer to the tech professional, everyone has
heard about the benefits of cloud technology, and how it can to change our collective
lives. Today, cloud computing is not only fast, easy to deploy, and inexpensive; but
also makes a good working argument for both large-scale enterprises and small
mom-and-dad joints.
Dropbox, OneDrive, and Google Drive are just the tip of the iceberg, as in 2018, we
can expect new powerful apps which directly run on the cloud and take minimal
space in the phone storage. Syncing data working on an app on the phone and then
continuing it from a tablet or desktop will also see a huge acceptance.
2. Enterprise Mobile Apps Get a New Lease of Life
It’s not a secret anymore that more and more developers are gravitating towards
developing enterprise mobile apps. The reason being that such apps, which make it
easy to keep large teams connected, as well as track key metrics and KPIs, are now
required by almost every small and large business to some extent.
43% of the enterprise app developers earn more than $10,000 per month, as
compared to the 19% of the developers who develop consumer-focused apps.
Enterprise app stores are also predicted to become the next big thing, as with more
B2B interaction, a tremendous opportunity will be offered to new developers.

3. IoT will Open New Possibilities
IoT, or the Internet of Things, is already a $19 trillion industry, and over the next five
years, more than 5 billion people are expected to be using an IoT-driven technology
in some form or the other. Today, IoT is present in modern wearable technology,
smart thermostats, smart bulbs, dimmable streetlights, etc.
In the coming year, expect this technology to be rapidly adopted for mobile
application development, while allowing for more personalized user experiences
across a variety of devices.
4. Location-based Wi-Fi Services Become Commonplace
Mobile location services and Beacon technology are now starting to blur the
boundaries between online and offline advertising, especially in the retail sector.
Apple had already integrated the technology within iBeacon, and in 2016 Android
followed suit.
In the following years, Wi-Fi will be used for more than just internet access, as more
and more public hotspots would also double up as location access points. App
developers are also expected to follow suit, by building apps which take advantage of
such location-based Wi-Fi services.
5. M-Commerce to be the Next Great Opportunity
As e-commerce giants such as Amazon and eBay flourish, the usage of m-Commerce
apps is also expected to increase in the coming years. With more smartphones
featuring technology such as NFC, Fingerprint recognition, etc., using a mobile
phone to pay for transactions, amongst others, will also find ready acceptance.
Developers will also have the opportunity to build m-Commerce apps which can
provide additional functionality to the consumer. Read our article which describes
the models, benefits, and future trends of mobile payment solutions.
6. In-App Advertising and Purchasing Will Grow Steadily
With a growing number of smartphone users using their mobile apps to perform
mundane, day-to-day tasks, the revenue generated from in-app advertising and
purchasing is also steadily increasing. According to the latest figures, in-app
purchasing from mobile devices touched approximately $9 billion in 2017. In the
coming years, expect application development trends to move away from simple
banners and integrating advertisements in a fun, non-obnoxious manner for the end-
user.
7. Application Security Becomes Necessary
With rapid technological advancements being made on a daily basis, application

security, as well as general smartphone security is a major concern. Currently, most
of the top 100 apps in the Google app store have already been hacked, and the
picture isn’t that pretty on the iOS side as well.

Therefore, with Google, Microsoft, and Apple all raising the stakes and making
security a big target for the coming few years, developers also need to focus on cyber
security and implement new-generation security features within their apps.
8. New-gen Mobile Games See the Light of Day
With the advancements being made in the field of social connectivity and cloud
technology, now is the time for developers to focus on games which have an
increased multiplayer focus rather than developing only single player games.
By developing new-generation games based on the latest game engines, which also
make use of easy access to cloud technology, developers can push frequent and rapid
updates to enhance the UX.
Barriers to e-commerce
Back in the day, you can sell just about anything and make crazy money.
Competition was minimal, technology wasn’t as affordable as it is now and access to
product was limited.
Now, Amazon is a major competitor to everyone. China is opening up to the world
and technology is now affordable.
Here are the top 10 most common challenges faced by eCommerce businesses of all
sizes.
1. Finding the right products to sell
Shopping cart platforms like Shopify have eliminated many barriers of entry.
Anyone can launch an online store within days and start selling all sorts of products.
Amazon is taking over the eCommerce world with their massive online product
catalog. Their marketplace and fulfillment services have enabled sellers from all over
the world to easily reach paying customers.
Let’s not forget about Aliexpress. They’ve simplified product sourcing by giving
access to Chinese manufacturers within a couple of clicks.
All of this has made it very difficult for retailers to source unique products unless you
they decide to manufacture your own.
2. Attracting the perfect customer
Online shoppers don’t shop the same way as they used to back in the day. They use
Amazon to search for products (not just Google). They ask for recommendations on
Social Media. hey use their smartphones to read product reviews while in-store and
pay for purchases using all sorts of payment methods.
Lots has changed including the way they consume content and communicate online.
They get easily distracted with technology and social media.
Retailers must figure out where their audience is and how to attract them efficiently
without killing their marketing budget.

3. Generating targeted traffic
Digital marketing channels are evolving. Retailers can no longer rely one type of
channel to drive traffic to their online store.They must effectively leverage SEO, PPC,
email, social, display ads, retargeting, mobile, shopping engines and affiliates to help
drive qualified traffic to their online store. They must be visible where their audience
is paying attention.
4. Capturing quality leads
Online retailers are spending a significant amount of money driving traffic to their
online store. With conversion rates ranging between 1% to 3%, they must put a lot of
effort in generating leads in order to get the most out of their marketing efforts.The
money is in the list. Building an email subscribers list is key for long term success.
Not only will help you communicate your message, but it will also allow you to
prospect better using tools such as Facebook Custom Audiences.Not all leads are
created equally. Retailers must craft the right message for the right audience in order
to convert them into leads with hopes of turning them into customers.
5. Nurturing the ideal prospects
Having a large email list is worthless if you’re not actively engaging with subscribers.
A small percentage of your email list will actually convert into paying customers.
Nonetheless, retailers must always deliver value with their email marketing efforts.
Online retailers put a lot of focus on communicating product offering as well as
promotions, but prospects need more than that. Value and entertainment goes a
long way but that requires more work.
6. Converting shoppers into paying customers
Driving quality traffic and nurturing leads is key if you want to close the sale. At a
certain point, you need to convert those leads in order to pay for your marketing
campaigns.Retailers must constantly optimize their efforts in converting both email
leads as well as website visitors into customers. Conversion optimization is a
continuous process.
7. Retaining customers
Attracting new customers is more expensive than retaining the current ones you
already have.Retailers must implement tactics to help them get the most out of their
customer base in increase customer lifetime value.
8. Achieving profitable long-term growth
Increasing sales is one way to grow the business but in the end, what matters most is
profitability.
Online retailers must always find ways to cut inventory costs, improve marketing
efficiency, reduce overhead, reduce shipping costs and control order returns.

9. Choosing the right technology & partners
Some online retailers may face growth challenges because their techonology is
limiting them or they’ve hired the wrong partners/agencies to help them manage
their projects.
Retailers wanting to achieve growth must be built on a good technology foundation.
They must choose the right shopping cart solution, inventory management software,
email software, CRM systems, analytics and so much more.
In addition, hiring the wrong partners or agencies to help you implement projects or
oversee marketing campaigns may also limit your growth. Online retailers must
choose carefully who to work with.
10. Attracting and hiring the right people to make it all happen
Let’s face it, online retailers may have visions and aspirations but one true fact
remains, they need the right people to help them carry out their desires.
Attracting the right talent is key in order to achieve desirable online growth. Also,
having the right leader plays an even bigger role.
Retailers should be out there getting their name out within the online community by
attending eCommerce conferences, speaking at events and networking. Employees
want to work for companies that care about them and their future. Having a sense of
purpose is key.

UNIT-II
Internet and e-commerce

We are living in the age of technological advances. Development in our society began
to happen post the World Wars, where in Industrial revolution started changing the
face of economies. With evolution of Information Technology we first heard the
Radio and later the TV that could capture pictures from the air and show it on the TV
box. Then came the ‘Computer’ which was aptly the magic box. Computers and
advancement of information and communication technology heralded the arrival of
‘Internet’ or ‘World Wide Web’ technology.
What a difference the Internet has made to our lives. No other invention has had
such a mass transformational power over the entire human society, enterprise,
business, economy as well as the political systems, education and the world
communities and nations at large. The internet is rightly called the highway that has
managed to erase the borders between countries and societies and taken the human
society to a different level altogether.
Take a look at our lives today. There is no aspect of our life that is not interfaced with
internet in one way or the other. From an individual’s need to find a date or a
suitable life partner to one’s banking, insurance and other payments as well as dining
out and not to forget the online shopping, internet has managed to become the
mainstream facilitator to each and every individual.
Today millions of users access and use the internet for various purposes throughout
the day. They use the internet for searching, browsing, writing & communication,
listening, watching news, videos, publishing copying, printing, discussions, trading
and selling etc. The list of activities and choices that the internet has got to offer to
individuals is ever expanding. With millions of users actively looking for various
products, information and services, there is a huge opportunity for the businesses to
jump on to the internet bandwagon and cash in on the business opportunity that is
presenting itself every minute.
Technology has helped build a platform that has enabled the businesses to cash in on
the huge population and market that is now accessible over the internet and sell to
them. Take the case of Online Banking, Mobile Banking, Debit| Credit Cards, ATMs
as well as online trading and other business transactions, all these have grown and
happened as a result of technological advancement in terms of communication,
software as well as hardware technologies. From the time that one connected to
Internet using a desktop, model and a telephone line to the Wi-Fi technology of
today, we have graduated very fast making it possible to buy and sell at the click of a
button. At another level the Business Processes as well as ERP coupled with various
software and applications besides EDI, have enabled businesses to go ‘On Line’ with
their business models.
Today no business, be it Business to Business or Business to Consumer, can ignore
the huge ‘Online Market’ that exists on the internet. E Commerce was inevitable.
Physical markets have literally been replaced with ‘Virtual Markets’. E Commerce has
had far reaching impact on business organizations for it has redefined ‘Market’. E
Commerce has made it possible for sellers to reach out to planet wide markets and
consumers, thus changing the way business is conducted. For every prospective

Management Professional, the in depth understanding of ‘Online Marketing’ and ‘E
Commerce’ have become very important. Marketing managers have got to go back to
the class rooms to learn the new rules of game in handling Online Marketing which is
drastically and totally different from the traditional marketing, selling, distribution
and advertising strategies. Understanding all about Internet, E Commerce
mechanisms, technologies, learning how to market online, understanding E
Customer and learning to identify, build and nurture a relationship with the E
Customer become the building blocks of one’s new learning.
The Internet is a worldwide, publicly accessible series of interconnected computer
networks that transmit data by packet switching using the standard Internet Protocol
(IP). It is a “network of networks” that consists of millions of smaller domestic,
academic, business, and government networks, which together carry various
information and services, such as electronic mail, online chat, file transfer, and the
interlinked web pages and other resources of the World Wide Web (WWW).
The Internet and the World Wide Web are not synonymous. The Internet is a
collection of interconnected computer networks, linked by copper wires, fiber-optic
cables, wireless connections, etc. In contrast, the Web is a collection of
interconnected documents and other resources, linked by hyperlinks and URLs. The
World Wide Web is one of the services accessible via the Internet, along with various
others including e-mail, file sharing, online gaming and others described below.
America Online, Comcast, Earthlink, etc. are examples of Internet service providers.
They make it physically possible for you to send and access data from the Internet.
They allow you to send and receive data to and from their computers or routers
which are connected to the Internet.
World Wide Web is an example of an information protocol/service that can be used
to send and receive information over the Internet. It supports:
• Multimedia Information (text, movies, pictures, sound, programs . . . ).

• Hypertext Information (information that contains links to other
information resources)
• Graphic User Interface (so users can point and click to request
information instead of typing in text commands).
The server software for the World Wide Web is called an HTTP server (or informally
a Web server). Examples are Apache and IIS. The client software for World Wide
Web is called a Web browser. Examples are: Netscape, Internet Explorer, Safari,
Firefox, and Mozilla. These examples are particular “brands” of software that have a
similar function, just like Lotus 123 and Excel are both spreadsheet software
packages.
Local Area Network (LAN)

A local area network (LAN) is a collection of devices connected together in one
physical location, such as a building, office, or home. A LAN can be small or large,
ranging from a home network with one user to an enterprise network with thousands
of users and devices in an office or school. Regardless of size, a LAN’s single defining
characteristic is that it connects devices that are in a single, limited area.

In contrast, a wide area network (WAN) or metropolitan area network (MAN) covers
larger geographic areas. Some WANs and MANs connect many LANs together.
A LAN comprises cables, access points, switches, routers, and other components that
enable devices to connect to internal servers, web servers, and other LANs via wide
area networks.
The rise of virtualization has also fueled the development of virtual LANs, which
enable network administrators to logically group network nodes and partition their
networks without a need for major infrastructure changes.
For example, in an office with multiple departments, such as accounting, IT support,
and administration, each department’s computers could be logically connected to the
same switch but segmented to behave as if they are separate.
Types of LAN
Ethernet is the most common type of LAN. Different Lan can be differentiated on the
behalf of following characteristics.
• Topology: The topology is the geometric arrangement of a network elements.

For example, Network devices can be interconnected in a ring topology or in a
bus topology or linear bus.
• Protocols: It is a guidelines for communicating data between two devices.
The protocols also determine type of error and data compression.
• Media: The cable used in Lan to connect devices are twisted-pair wire,
coaxial cables, or fiber optic.
Benefits of a LAN
The advantages of a LAN are the same as those for any group of devices networked
together. The devices can use a single Internet connection, share files with one
another, print to shared printers, and be accessed and even controlled by one
another.
LANs were developed in the 1960s for use by colleges, universities, and research
facilities (such as NASA), primarily to connect computers to other computers. It
wasn’t until the development of Ethernet technology (1973, at Xerox PARC), its
commercialization (1980), and its standardization (1983) that LANs started to be
used widely.
While the benefits of having devices connected to a network have always been well
understood, it wasn’t until the wide deployment of Wi-Fi technology that LANs
became commonplace in nearly every type of environment. Today, not only do
businesses and schools use LANs, but also restaurants, coffee shops, stores, and
homes.
Wireless connectivity has also greatly expanded the types of devices that can be
connected to a LAN. Now, nearly everything imaginable can be “connected,” from
PCs, printers, and phones to smart TVs, stereos, speakers, lighting, thermostats,
window shades, door locks, security cameras–and even coffeemakers, refrigerators,
and toys.

The Evolution of LAN
As there is a tremendous use of PC or desktop computers in the office environment,
it became apparent that attaching a printer or FAX machine to each and every
computer is highly expensive. Further, copying files to a disk and moving from one
computer to another to print the file is also time consuming. Connecting computers
so that they could share a printer and share files translated into big savings.
In 1982, 10 Mbps Ethernet cards came into existence and they were very expensive.
By 1988, 10 Mbps Ethernet had acceptable performance for large LANs and was still
good for small installations. By 1990, large installations were beginning to see
congestion. Hence, alternatives to 10 Mbps cards were becoming popular. One of
these alternatives was to install a switched architecture, rather than constructing
architecture with hubs.
In 1996, 10Mbps switched LANs were providing acceptable service for smaller
installations. The awesome technology at this point was 100Mbps shared Ethernet.
By 1998 switched 10Mbps Ethernet was common in small LANs and switched 100
Mbps Ethernet was common in large LANs. Large LANs are beginning to see
limitations of 100 Mbps when everyone on the LAN starts doing video conferencing.
Now, Gigabyte Ethernet cards are available for sale. The 10 Mbps cards are not used
anymore. Now-i-days 10/100, 10/100/1000 auto-sensing cards are available in the
market. Everything is moving to dual mode auto-sensing technology. Even though
Gigabyte Ethernet is getting more popular now-a-days, Gigabyte LANs are 10 times
faster than a 100Mbps LAN. Ethernet was evolved from a protocol called ALOHA.
ALOHA was mainly used in packet radio network which communicate using
satellites. In brief, an earth station sends some data, as soon as the data is ready it
waits for an acknowledgement (ACK). If it fails to get an ACK, it would time out and
sends the same thing again. The sender keeps trying until the transmission is
successful. The lesson to be learned here is that it is important to limit the number of
users on a shared network medium. Traffic analysis can help determine the
maximum number of users to ensure a reasonable Quality of Service (QOS).
LAN Advantages and Services

A LAN has the following advantages:
• They work on higher operating speed than WAN and MAN.

• They suit the requirements of a specific organization.
• They are easy to install and maintain.
• They exist as connected (wired) and wireless configurations.
LAN can provide the following services. They are:

(i) File-based service
Transfer of files from one node to another within the LAN area. For example, in a
typical LAN used for local banking, the file containing the detailed transactions of a
specific customer is transferred form sever to the client, whenever new transactions
are made on behalf of the customer. It also provides efficient ways of storing and
retrieving the data. When multiple copies of the same file exist, it provides necessary
synchronization in updating the files. LAN also provides backup for the critical data

so that safe recovery is possible when a failure occurs. It also provides data
encryption facility to control the access to certain data to only selected persons.
(ii) Print services
There can be one or more printers, modems, and fax machines attached to a LAN
and used by applications. A number of clients can share these devices. Print services
allow many clients to safely share printers and other such devices. All modem LANs
provide these services.
(iii) Application-based services
Applications run on a client may require higher computational capabilities. Servers
are more powerful than the clients. In a LAN, more than one client can share the
computational power of a server. Application servers are good examples for this.
(iv) Mail and message-based services
Electronic-mail is an important service used for exchanging information between
people on a network. Mails can be stored or forwarded to another user. Many free
mail servers are available on the Internet to provide free mail services to its clients.
(v) Database services
Storing and retrieving of data in databases is another requirement of a client to
control and manipulate the data. Database servers are the most popular ones that
service the need of clients.
(vi) Distributed data services
When data is distributed, it is possible for more than one client system to share the
data. Though the databases appear physically distributed, there is a single logical
view given by the database server. There are so many issues involved in sharing a
single file by more than one client. Consistency issue is very seriously tackled when
updating shared files.
(vii) Remote services
Linking a LAN with a remote computer or a mainframe is another service required.
This feature is used to access remote databases available in large mainframes.
Characteristics of a LAN:A LAN can be characterized by means of hardware and

software components and a set of protocols.
Hardware components of a LAN are:
1. The Server
Server is a computer that provides services to other computers (workstations or
clients) on the network. The primary goal of a LAN server is data management. It
stores, retrieves, and protects the data. A server also sends data to the requesters on
the network and also to authorized remote users. The type and configurations needed
for the server, depends mainly on the purpose for which the LAN is being
constructed. Servers may be classified, based on the type of service they provide. A
single server may provide a number of services also. The following are the list of
servers categorized, based on the type of service.

(i) File server and disk server
A file server makes the disk storage space (in the order of several Gigabytes), to
various client PCs. The file server satisfies the request for data from application
programs running in client workstations. It also keeps the consistency of data when
more than one client makes simultaneous data requests. In a LAN, working with a
file server, all application running in a workstation may request for a file with
involving the local operating system. The workstation sends its file request to the
server and the server processes the request and sends the required file directly to the
workstation.
(ii) Disk servers
Disk servers are similar to file servers. The difference is that, in a file server when an
application running in a workstation requests for a specific file, the local operating
system, running on the workstation interacts with the file server and gets the
information required. In a disk server, the application can directly access the
required file without the intervention of the local operating system.
(iii) Database server
These servers are a subset of the file server category. They provide access to huge
databases for clients. Database information is stored in hard disk storage or CD ROM
or optical disk drives. It contains the DBMS, which is more sophisticated than the
basic file I/O access method. DBMS eliminates data redundancy and allows the user,
transparent data distribution. The database server extracts only the relevant data and
passes it to the requesting client, rather than passing the entire file like a file server.
(iv) Print server
Every LAN has one or more printers shared by all the nodes or workstations. The role
of a print server is to collect the information from several workstations, store them
on the disk and send it to the printer. This processing is known as print spooling.
Print services become a part of the file server nowadays. In many LAN architectures,
any PC on the LAN can act as a print server.
(v) Backup server
Such servers provide backup in case the main server fails. Every network must have a
back up server to keep all the information safe. Periodically, these servers must be
updated so that reliability can be improved.
(vi) Gateway server
A gateway server is used to provide connectivity to other networks. The GIAS
(Gateway server of VSNL, India) is a gateway server, which provides connectivity to
all other networks on the Internet for the Indian segment of the Internet. A gateway
server also provides connectivity to dissimilar networks.
(vii) Communication server
Communication servers are more diverse than the other servers. The main functions
of a communication server are linking client workstations on the LAN with
mainframe computers, sharing a pool of modems among the client stations, and
communicating with other LANs as well.Examples are Novell Netware LAN Server,
Microsoft Windows NT Server or Windows 2000, IBMOS2 Server, etc.

2. Workstations
Workstations or nodes are the clients that use the services provided by the network
server. Workstations are loaded with special software to interact with the server to
access the services. Examples of workstations include the Microsoft Windows NT
workstation, Windows 2000 workstation, IBM workstation, Sun workstation, etc.
3. The Transmission Media for LAN
Various transmission media are used for constructing a LANs. The most popular
among them are twisted pair, coaxial cable, or optical fibers. LANs operated with any
such transmission media is known as wired LAN. LANs can also be constructed
without a transmission media or cable. Such LANs are known as wireless LANs.
4. Communication Equipments
(i) Repeater
A repeater operates at layer-I. It has just enough intelligence to find out the layer-l
incoming signals are and then send out a clean stream of signals built from scratch.
Noise is eliminated from the signals in this manner. A repeater has one incoming and
one outgoing line. It extends the distance that a signal may be sent over a
transmission media.
(ii) Hub
A hub is a multi-port repeater. Any incoming signal is repeated on all other outgoing
lines. A hub functions at layer-I.
(iii) Bridge
A bridge has more intelligence than a hub or repeater. This device separates two
segments of a single LAN. A bridge operates at layer-2 by looking at the destination
address in the frame header. Consulting a table, the bridge will determine if the
frame needs to pass on to the other segment. Only certain frames may pass those
with the correct MAC address.
(iv) Switch
A switch is a multi-port bridge. It performs its functions at layer two. It looks at MAC
layer addresses just like a bridge, consults a table, and determines if a frame needs to
be sent on one of the attached lines. Multiple connections can occur through a switch
simultaneously as long as they don’t compete for the same line. A switch, just like a
bridge, does not divide a LAN into two LANs. It merely reduces unnecessary traffic
on LAN segments.
(v) Router
A router is more intelligent than bridges and switches. It functions at layer-3. At
layer-2 all incoming frames are checked for errors and then they are delivered to
layer-3. A layer-3 datagram has an address that permits it to be sent across internet
works (interconnected networks). This requires a single global addressing scheme.
The router finds the layer-3 address and consults a table that it keeps. There the
router will learn which attached line to send the datagram on. A router provides
facilities to the stations on the LAN, to access other networks.

Wide Area Network (WAN)
A WAN is a network that uses various links – private lines, Multiprotocol Label
Switching (MPLS), virtual private networks (VPNs), wireless (cellular), the Internet
to connect smaller metropolitan and campus networks in diverse locations into a
single, distributed network. The sites they connect could be a few miles apart or
halfway around the globe. In an enterprise, the purposes of a WAN could include
connecting branch offices or even individual remote workers with headquarters or
the data center, in order to share corporate resources and communications.
A wide area network (WAN) is a network that exists over a large-scale geographical
area. A WAN connects different smaller networks, including local area networks
(LANs) and metro area networks (MANs). This ensures that computers and users in
one location can communicate with computers and users in other locations. WAN
implementation can be done either with the help of the public transmission system
or a private network.
A WAN connects more than one LAN and is used for larger geographical areas.
WANs are similar to a banking system, where hundreds of branches in different cities
are connected with each other in order to share their official data.
A WAN works in a similar fashion to a LAN, just on a larger scale. Typically, TCP/IP
is the protocol used for a WAN in combination with devices such as routers, switches,
firewalls and modems.
WAN architecture
Initially, WANs were built with meshed webs of private lines bought from
telecommunications carriers, but WAN architectures have advanced to include
packet-switched services such as frame relay and ATM as well as MPLS. With these
services, a single connection to a site can be connected to many others via switching
within service-provider networks. For certain types of traffic, the Internet can also be
woven into the mix to provide less expensive WAN connections.
History of WANs
WANs have been around since the early days of computing networks. The first
examples of WANs included circuit-switched telephone lines, but advances in
technologies now include wireless transmissions and fiber-optic transmissions. Data
can also be moved via leased lines, or even via satellite transmission.
As technologies changed, so did transmission rates. The early days of 2400 bps
modems evolved to 40 Gbps and 100 Gbps connectivity today. These speed increases
have allowed more devices to connect to networks, witnessed by the explosion of
computers, phones, tablets and smaller Internet of Things devices.
In addition, speed improvements have allowed applications to utilize larger amounts
of bandwidth that can travel across WANs at super-high speed. This has allowed
enterprises to implement applications such as videoconferencing and large-file data
backup.
Nobody would have considered conducting a videoconference across a 28K bps
modem, but now workers can sit in a cubicle and participate in a global company
meeting via video. Many WAN links are supplied via carrier services in which
customers’ traffic rides over facilities shared by other customers.

Customers can also buy dedicated links that nail up circuits point-to-point and are
used for just one customer’s traffic. These are typically used for top-priority traffic or
delay-sensitive applications that have high-bandwidth needs such as
videoconferencing.
Connections between WAN sites may be protected by virtual private networking
(VPN) technology that overlays security functions including authentication,
encryption, confidentiality and non-repudiation.
WAN Management and optimization
Because data transmission is still reliant on the rules of physics, the greater the
distance between two devices, the longer it will take for data to travel between them.
The greater the distance, the greater the delay. Network congestion and dropped
packets can also introduce performance problems.
Some of this can be addressed using WAN optimization, which makes data
transmissions more efficient. This is important because WAN links can be expensive,
so technologies have sprung up that reduce the amount of traffic crossing WAN links
and ensure that it arrives efficiently. These optimization methods include
abbreviating redundant data (known as deduplication), compression, and caching
(putting frequently used data closer to the end user).
Traffic can be shaped, giving some applications (such as VoIP) a higher priority over
other, less urgent traffic (such as email), which in turn helps improve the overall
WAN performance. This can be formalized into quality of service settings that define
classes of traffic by the priority each class receives relative to others, the type of WAN
connection that each traffic type will travel, and the bandwidth that each receives.
Business Uses of Internet

More than 1.8 billion people worldwide use the Internet in some way, shape or form,
according to a December, 2009 study on internetworldstats.com. A significant
portion of users are business owners who have learned the power of connecting with
customers and colleagues electronically. Over time, a business owner’s consistent use
of the Internet can help propel his company to the next level.
1)Research Competition
Some businesses use the Internet to research competitors. For instance,
Hoovers.com allows searches for detailed information on businesses across the
country. An Internet search on a competing company results in articles and news
stories about the competition that may help a business owner prepare for changes in
the industry.
2)Buy and Sell
One of the basic uses of the Internet for businesses is to sell products and services.
Businesses create E-commerce websites to sell anything from cell phone contracts to
books and CDs. Online selling eliminates the need for the business to maintain a
brick-and-mortar store and in some cases they don’t have to hold an inventory. A
business can also use the Internet to buy items and services online, such as bulk-
buying office supplies or printed materials.

3)Gauge Customer Interest
Business owners use the Internet to monitor customer purchasing trends and
interests. To discover what everyday people think about a particular product or
service, business owners can visit online social networking sites and message boards.
Taking in this feedback helps business owners make their products better. For
example, car accessory businesses can visit car forums to find out what car
enthusiasts want. A business owner can also use the Internet to connect and
communicate with his customers through these same websites.
4)Advertising
Businesses also use the Internet to find new customers through online advertising.
Offering text and banner ads on websites as well as informational pieces, the Internet
allows advertisers to reach potential customers quickly and efficiently. Pay-per click
advertisements are distributed on Internet search engines and websites, allowing
business owners to reach potential customers using search terms related to their
business. As the business pays only for each ad click, costs are lower. The
affordability and reach of some Internet advertising puts even the smallest business
owner in a position to compete with larger businesses.
5)Provide a Superior Customer Experience
Digital technologies enable businesses to attract, retain and engage their customers
in a more effective manner and for lower costs. You can use your website and social
media pages to connect with prospects and market your products to those who are
most likely to buy. With pay-per-click advertising, you can reach the right people at
the right time and adapt your campaigns to the needs of your target audience.
Marketing automation allows you to track the customer journey and reach potential
clients across multiple channels.
Customer relationship management software enables users to keep accurate records
of their customers’ needs, transactions and buying behavior. With this data, you can
personalize the customer experience and provide better service. According to
Accenture, 91 percent of people are more likely to purchase from brands that
remember their preferences and provide relevant offers.
6)Reach a Global Audience
The rise of e-commerce, social networking and other digital technologies allows
companies to reach a global audience. Geographical boundaries are no longer an
issue. Small businesses can now advertise and sell their products to customers
worldwide. A well-designed social media campaign can go viral within hours,
generating leads and revenue.
It’s estimated that over 1.9 billion people will make an online purchase in 2019.
Regardless of your budget, you can put your business in front of millions of potential
customers to raise brand awareness and generate revenue. Furthermore, you can
leverage the power of email and video marketing, blogging, search engine
optimization and other technologies to turn prospects into buyers. Without the
internet, none of these things would be possible.

The Internet and the Web
The Internet
In simplest words it is a global network of smaller networks interconnected using
communication protocols that are standardised. The Internet standards describe a
framework known as the Internet protocol suite. This model divides methods into a
layered system of protocols.
These layers are as follows:
• Application layer (highest): Concerned with the data(URL, type, etc), where
HTTP, HTTPS, etc comes in.
• Transport layer: Responsible for end-to-end communication over a network.
• Network layer: Provides data route.
Provides a variety of information and communication facilities; contains forums,

databases, email, hypertext, etc. It consists of private, public, academic, business,
and government networks of local to global scope, linked by a broad array of
electronic, wireless, and optical networking technologies.
The World Wide Web

The web is a subset of the internet. It’s a system of Internet servers that support
specially formatted documents. The documents are formatted in a markup language
called HTML (that supports links, multimedia, etc). These documents are interlinked
using hypertext links and are accessible via the Internet.
To link hypertext to the Internet, we need:
The markup language, i.e., HTML
The transfer protocol, e.g., HTTP
Uniform Resource Locator (URL), the address of the resource
URI
URI stands for ‘Uniform Resource Identifier’, it’s like an address providing a unique
global identifier to a resource on the Web. Uniform Resource Locator (URL) is the
most commonly used form of a URI. The URL consists mainly of two parts:
• The protocol used in transfer, e.g., HTTP

• The domain name
The Internet is not governed, it has no single authority figure. The ultimate authority
for where the Internet is going rests with the Internet Society, or ISOC. ISOC is a
voluntary membership organization whose purpose is to promote global information
exchange through Internet technology.
ISOC appoints the IAB: Internet Architecture Board. They meet regularly to
review standards and allocate resources, like addresses.
IETF: Internet Engineering Task Force. Another volunteer organisation that meets
regularly to discuss operational and technical problems.

Protocol
A protocol is a standard set of rules that allow electronic devices to communicate
with each other. These rules include what type of data may be transmitted, what
commands are used to send and receive data, and how data transfers are confirmed.
You can think of a protocol as a spoken language. Each language has its own rules
and vocabulary. If two people share the same language, they can communicate
effectively. Similarly, if two hardware devices support the same protocol, they can
communicate with each other, regardless of the manufacturer or type of device. For
example, an Apple iPhone can send an email to an Android device using a standard
mail protocol. A Windows-based PC can load a webpage from a Unix-based web
server using a standard web protocol.
Protocols exist for several different applications. Examples include wired networking
(e.g., Ethernet), wireless networking (e.g., 802.11ac), and Internet communication
(e.g., IP). The Internet protocol suite, which is used for transmitting data over the
Internet, contains dozens of protocols. These protocols are of four catagories:-
• Link layer: PPP, DSL, Wi-Fi, etc.

• Internet layer: IPv4, IPv6, etc.
• Transport layer: TCP, UDP, etc.
• Application layer: HTTP, IMAP, FTP, etc.
Link layer protocols establish communication between devices at a hardware level. In

order to transmit data from one device to another, each device’s hardware must
support the same link layer protocol. Internet layer protocols are used to initiate data
transfers and route them over the Internet. Transport layer protocols define how
packets are sent, received, and confirmed. Application layer protocols contain
commands for specific applications. For example, a web browser uses HTTPS to
securely download the contents of a webpage from a web server. An email client uses
SMTP to send email messages through a mail server.
Protocols are a fundamental aspect of digital communication. In most cases,
protocols operate in the background, so it is not necessary for typical users to know
how each protocol works. Still, it may be helpful to familiarize yourself with some
common protocols so you can better understand settings in software programs, such
as web browsers and email clients.
Network Protocols
Network protocols are sets of established rules that dictate how to format, transmit
and receive data so computer network devices from servers and routers to endpoints
can communicate regardless of the differences in their underlying infrastructures,
designs or standards. To successfully send and receive information, devices on both
sides of a communication exchange must accept and follow protocol conventions.
Support for network protocols can be built into software, hardware or
both.Standardized network protocols provide a common language for network
devices. Without them, computers wouldn’t know how to engage with each other. As
a result, except for specialty networks built around a specific architecture, few
networks would be able to function, and the internet as we know it wouldn’t exist.
Virtually all network end users rely on network protocols for connectivity.

How network protocols work?
Network protocols break larger processes into discrete, narrowly defined functions
and tasks across every level of the network. In the standard model, known as the
Open Systems Interconnection (OSI) model, one or more network protocols govern
activities at each layer in the telecommunication exchange.
A set of cooperating network protocols is called a protocol suite. The TCP/IP suite
includes numerous protocols across layers such as the data, network, transport and
application layers working together to enable internet connectivity. These include:
Transmission Control Protocol (TCP), which uses a set of rules to exchange
messages with other internet points at the information packet level;
User Datagram Protocol (UDP), which acts as an alternative communication
protocol to TCP and is used to establish low-latency and loss-tolerating connections
between applications and the Internet.
Internet Protocol (IP), which uses a set of rules to send and receive messages at
the Internet address level; and
additional network protocols that include the Hypertext Transfer Protocol (HTTP)
and File Transfer Protocol (FTP), each of which has defined sets of rules to exchange
and display information.
Every packet transmitted and received over a network contains binary data. Most
protocols will add a header at the beginning of each packed in order to store
information about the sender and the message’s intended destination. Some
protocols may also include a footer at the end with additional information. Network
protocols process these headers and footers as part of the data moving among
devices in order to identify messages of their own kind.
Network protocols are often set forth in an industry standard — developed, defined
and published by groups such as:
• The International Telecommunication Union

• The Institute of Electrical and Electronics Engineers
• The Internet Engineering Task Force
• The International Organization for Standardization
• The World Wide Web Consortium.
Major types of network protocols

Generally speaking, networks have three types of protocols communication, such as
Ethernet; management, such as the Simple Mail Transfer Protocol (SMTP); and
security, such as Secure Shell (SSH).
Falling into these three broad categories are thousands of network protocols that
uniformly handle an extensive variety of defined tasks, including authentication,
automation, correction, compression, error handling, file retrieval, file transfer, link
aggregation, routing, semantics, synchronization and syntax.

Implementing network protocols
In order for network protocols to work, they must be coded within software, either a
part of the computer’s operating system (OS) or as an application, or implemented
within the computer’s hardware. Most modern operating systems possess built-in
software services that are prepared to implement some network protocols. Other
applications, such as web browsers, are designed with software libraries that support
whatever protocols are necessary for the application to function. Furthermore,
TCP/IP and routing protocol support is implemented in direct hardware for
enhanced performance.
Whenever a new protocol is implemented, it is added to the protocol suite. The
organization of protocol suites is considered to be monolithic since all protocols are
stored in the same address and build on top of one another.
Vulnerabilities of network protocols
One major vulnerability found in network protocols is that they are not designed for
security. Their lack of protection can sometimes allow malicious attacks, such as
eavesdropping and cache poisoning, to affect the system. The most common attack
on network protocols is the advertisement of false routes, causing traffic to go
through compromised hosts instead of the appropriate ones.
Network protocol analyzers have been designed and installed in response to these
vulnerabilities. Network protocol analyzers protect systems against malicious activity
by supplementing firewalls, anti-virus programs and anti-spyware software.
Uses of network protocols
Network protocols are what make the modern Internet possible since they allow
computers to communicate across networks without users having to see or know
what background operations are occurring. Some specific examples of network
protocols and their uses are:
• Post Office Protocol 3 (POP3), which is the most recent version of a standard
protocol that is used for receiving incoming e-mails.
• Simple main transport Protocol, which is used to send and distribute outgoing
e-mails.
• File Transfer Protocol (FTP), which is used to transfer files from one machine
to another.
• Telnet, which is a collection of rules used to connect one system to another via
a remote login. In this protocol, the system that send the request for
connection is the local computer and the system that accepts the connection is
the remote computer.

Intranet
• Intranet is defined as private network of computers within an organization
with its own server and firewall. Moreover we can define Intranet as:
• Intranet is system in which multiple PCs are networked to be connected to
each other. PCs in intranet are not available to the world outside of the
intranet.
• Usually each company or organization has their own Intranet network and
members/employees of that company can access the computers in their
intranet.
• Every computer in internet is identified by a unique IP address.
• Each computer in Intranet is also identified by a IP Address, which is unique
among the computers in that Intranet.
Advantage of Intranet:Intranet is very efficient and reliable network system for

any organization. It is beneficial in every aspect such as collaboration, cost-
effectiveness, security, productivity and much more.
(i) Communication-Intranet offers easy and cheap communication within

an organization. Employees can communicate using chat, e-mail or blogs.
(ii) Time Saving-Information on Intranet is shared in real time.
(iii) Collaboration-Information is distributed among the employees as
according to requirement and it can be accessed by the authorized users,
resulting in enhanced teamwork.
(iv) Platform Independency-Intranet can connect computers and other
devices with different architecture.
(v) Cost Effective-Employees can see the data and other documents using
browser rather than printing them and distributing duplicate copies among
the employees, which certainly decreases the cost.
(vi) Workforce Productivity-Data is available at every time and can be
accessed using company workstation. This helps the employees work faster.
(vii) Business Management-It is also possible to deploy applications that
support business operations.
(viii) Security-Since information shared on intranet can only be accessed
within an organization, therefore there is almost no chance of being theft.
(ix) Specific Users-Intranet targets only specific users within an
organization therefore, once can exactly know whom he is interacting.
(x) Immediate Updates-Any changes made to information are reflected
immediately to all the users.

Issues in Intranet:Apart from several benefits of Intranet, there also exist
some issues.. These issues are shown in the following diagram:
Applications:Intranet applications are same as that of Internet applications.

Intranet applications are also accessed through a web browser. The only
difference is that, Intranet applications reside on local server while Internet
applications reside on remote server. Here, we’ve discussed some of these
applications:

(i) Document publication applications-Document publication
applications allow publishing documents such as manuals, software guide,
employee profits etc without use of paper.
(ii) Electronic resources applications-It offers electronic resources such
as software applications, templates and tools, to be shared across the network.
(iii) Interactive Communication applications-Like on internet, we have
e-mail and chat like applications for Intranet, hence offering an interactive
communication among employees.
(iv) Support for Internet Applications-Intranet offers an environment to
deploy and test applications before placing them on Internet.
Computer Hardware
CENTRAL PROCESSING UNIT (CPU)
Central processing unit (CPU) is the central component of the Computer System.
Sometimes it is called as microprocessor or processor. It is the brain that runs the
show inside the Computer. All functions and processes that is done on a computer is
performed directly or indirectly by the processor. Obviously, computer processor is
one of the most important element of the Computer system. CPU is consist of
transistors, that receives inputs and produces output. Transistors perform logical
operations which is called processing. It is also, scientifically, not only one of the
most amazing parts of the PC, but one of the most amazing devices in the world of
technology.
Motherboard
Alternatively referred to as the mb, mainboard, mboard, mobo, mobd, backplane
board, base board, main circuit board, planar board, system board, or a logic board
on Apple computers. The motherboard is a printed circuit board and foundation of a
computer that is the biggest board in a computer chassis. It allocates power and
allows communication to and between the CPU, RAM, and all other computer
hardware components.
A motherboard provides connectivity between the hardware components of a
computer, like the processor (CPU), memory (RAM), hard drive, and video card.
There are multiple types of motherboards, designed to fit different types and sizes of
computers.
Each type of motherboard is designed to work with specific types of processors and
memory, so they are not capable of working with every processor and type of
memory. However, hard drives are mostly universal and work with the majority of
motherboards, regardless of the type or brand.
Microprocessor
Microprocessor is a controlling unit of a micro-computer, fabricated on a small chip
capable of performing ALU (Arithmetic Logical Unit) operations and communicating
with the other devices connected to it. Microprocessor consists of an ALU, register
array, and a control unit. ALU performs arithmetical and logical operations on the
data received from the memory or an input device. Register array consists of
registers identified by letters like B, C, D, E, H, L and accumulator. The control unit
controls the flow of data and instructions within the computer.

How does a Microprocessor Work?
The microprocessor follows a sequence: Fetch, Decode, and then Execute.
Initially, the instructions are stored in the memory in a sequential order. The
microprocessor fetches those instructions from the memory, then decodes it and
executes those instructions till STOP instruction is reached. Later, it sends the result
in binary to the output port. Between these processes, the register stores the
temporarily data and ALU performs the computing functions.
List of Terms Used in a Microprocessor
Here is a list of some of the frequently used terms in a microprocessor −
• Instruction Set − It is the set of instructions that the microprocessor can

understand.
• Bandwidth − It is the number of bits processed in a single instruction.
• Clock Speed − It determines the number of operations per second the
processor can perform. It is expressed in megahertz (MHz) or gigahertz
(GHz).It is also known as Clock Rate.
• Word Length − It depends upon the width of internal data bus, registers, ALU,
etc. An 8-bit microprocessor can process 8-bit data at a time. The word length
ranges from 4 bits to 64 bits depending upon the type of the microcomputer.
• Data Types − The microprocessor has multiple data type formats like binary,
BCD, ASCII, signed and unsigned numbers.
Features of a Microprocessor
• Cost-effective: The microprocessor chips are available at low prices and

results its low cost.
• Size: The microprocessor is of small size chip, hence is portable.
• Low Power Consumption: Microprocessors are manufactured by using
metaloxide semiconductor technology, which has low power consumption.
• Versatility: The microprocessors are versatile as we can use the same chip in
a number of applications by configuring the software program.
• Reliability: The failure rate of an IC in microprocessors is very low, hence it
is reliable.

The Intel Pentium III AMD
The Pentium III model, introduced in 1999, represents Intel’s 32-bit x86 desktop and
mobile microprocessors in accordance with the sixth-generation P6 micro-
architecture.The Pentium III processor included SDRAM, enabling incredibly fast
data transfer between the memory and the microprocessor. Pentium III was also
faster than its predecessor, the Pentium II, featuring clock speeds of up to 1.4 GHz.
The Pentium III included 70 new computer instructions which allowed 3-D
rendering, imaging, video streaming, speech recognition and audio applications to
run more quickly.
The Pentium III processor was produced from 1999 to 2003, with variants
codenamed Katmai, Coppermine, Coppermine T and Tualatin. The variants’ clock
speeds varied from 450 MHz to 1.4 GHz. The Pentium III processor’s new
instructions were optimized for multimedia applications called MMX. It supported
floating-point units and integer calculations, which are often required for still or
video images to be modified for computer displays. The new instructions also
supported single instruction multiple data (SIMD) instructions, which allowed a type
of parallel processing. Other Intel brands associated with the Pentium III were
Celeron (for low-end versions) and Xeon (for high-end versions).
Cyrix
Cyrix Corporation was a microprocessor developer that was founded in 1988 in
Richardson, Texas, as a specialist supplier of math coprocessors for 286 and 386
microprocessors. The company was founded by Tom Brightman and Jerry Rogers.
Cyrix founder, President and CEO Jerry Rogers, aggressively recruited engineers and
pushed them, eventually assembling a small but efficient design team of 30 people.
Cyrix merged with National Semiconductor on 11 November 1997. The first Cyrix
product for the personal computer market was a x87 compatible FPU coprocessor.
The Cyrix FasMath 83D87 and 83S87 were introduced in 1989. The FasMath
provided up to 50% more performance than the Intel 80387. Cyrix FasMath 82S87, a
80287-compatible chip, was developed from the Cyrix 83D87 and has been available
since 1991.
MMX Technology
MMX is a Pentium microprocessor from Intel that is designed to run faster when
playing multimedia applications. According to Intel, a PC with an MMX
microprocessor runs a multimedia application up to 60% faster than one with a
microprocessor having the same clock speed but without MMX. In addition, an MMX
microprocessor runs other applications about 10% faster, probably because of
increased cache. All of these enhancements are made while preserving compatibility
with software and operating systems developed for the Intel Architecture.
MMX is a single instruction, multiple data (SIMD) instruction set designed by Intel,
introduced in January 1997 with its P5-based Pentium line of microprocessors,
designated as “Pentium with MMX Technology”. It developed out of a similar unit
introduced on the Intel i860, and earlier the Intel i750 video pixel processor. MMX is
a processor supplementary capability that is supported on recent IA-32 processors by
Intel and other vendors. The New York Times described the initial push, including
Super Bowl ads, as focused on “a new generation of glitzy multimedia products,
including videophones and 3-D video games.”
Software (Introduction to Programming Languages, System Software,
Operating System Utilities, Utility Software)
Software is a collection of instructions that enable the user to interact with a
computer, its hardware, or perform tasks. Without software, most computers would
be useless. For example, without your Internet browser software, you could not surf
the Internet or read this page. Without an operating system, the browser could not
run on your computer. The picture shows a Microsoft Excel box, an example of a
spreadsheet software program.
Computer software, or simply software, is a collection of data or computer
instructions that tell the computer how to work. This is in contrast to physical
hardware, from which the system is built and actually performs the work. In
computer science and software engineering, computer software is all information
processed by computer systems, programs and data. Computer software includes
computer programs, libraries and related non-executable data, such as online
documentation or digital media. Computer hardware and software require each other
and neither can be realistically used on its own.
The majority of software is written in high-level programming languages. They are
easier and more efficient for programmers because they are closer to natural
languages than machine languages. High-level languages are translated into machine
language using a compiler or an interpreter or a combination of the two. Software
may also be written in a low-level assembly language, which has strong
correspondence to the computer’s machine language instructions and is translated
into machine language using an assembler.
Introduction to Programming Languages
A programming language is a formal language, which comprises a set of instructions
that produce various kinds of output. Programming languages are used in computer
programming to implement algorithms.
Most programming languages consist of instructions for computers. There are
programmable machines that use a set of specific instructions, rather than general
programming languages. Early ones preceded the invention of the digital computer,
the first probably being the automatic flute player described in the 9th century by the
brothers Musa in Baghdad, during the Islamic Golden Age. Since the early 1800s,
programs have been used to direct the behavior of machines such as Jacquard looms,
music boxes and player pianos. The programs for these machines (such as a player
piano’s scrolls) did not produce different behavior in response to different inputs or
conditions. Thousands of different programming languages have been created, and
more are being created every year. Many programming languages are written in an
imperative form (i.e., as a sequence of operations to perform) while other languages
use the declarative form (i.e. the desired result is specified, not how to achieve it).
The description of a programming language is usually split into the two components
of syntax (form) and semantics (meaning). Some languages are defined by a
specification document (for example, the C programming language is specified by an
ISO Standard) while other languages (such as Perl) have a dominant implementation
that is treated as a reference. Some languages have both, with the basic language
defined by a standard and extensions taken from the dominant implementation
being common.

System Software
System software is software designed to provide a platform for other software.
Examples of system software include operating systems like macOS, GNU/Linux and
Microsoft Windows, computational science software, game engines, industrial
automation, and software as a service applications.
In contrast to system software, software that allows users to do user-oriented tasks
such as create text documents, play games, listen to music, or browse the web are
collectively referred to as application software.
In the early days of computing most application software was custom-written by
computer users to fit their specific hardware and requirements. In contrast, system
software was usually supplied by the manufacturer of the computer hardware and
was intended to be used by most or all users of that system.
The line where the distinction should be drawn is not always clear. Many operating
systems bundle application software. Such software is not considered system
software when it can be uninstalled usually without affecting the functioning of other
software. Exceptions could be e.g. web browsers such as Internet Explorer where
Microsoft argued in court that it was system software that could not be uninstalled.
Later examples are Chrome OS and Firefox OS where the browser functions as the
only user interface and the only way to run programs (and other web browsers can
not be installed in their place), then they can well be argued to be the operating
system and hence system software.
Another borderline example is cloud-based software. This software provides services
to a software client (usually a web browser or a JavaScript application running in the
web browser), not to the user directly, and is therefore systems software. It is also
developed using system programming methodologies and systems programming
languages. Yet from the perspective of functionality there is little difference between
a word processing application and word processing web application.
Operating System Utilities
We have seen that the fundamental purpose of the operating system is to manage the
various system resources. We have also examined the human computer interface
which allows us to interact with the operating system. There is, however, a significant
body of software that, while not strictly part of the operating system itself, cannot be
described as application software. This software is often bundled with the operating
system software, and comes under the general heading of utility software.
Utility software can include file re-organization utilities, backup programs, and a
whole range of communication services. Many of the utilities that are bundled with a
particular operating system are installed by default, although a significant number
are optional and must be explicitly selected for installation.
The number and type of utility program provided varies from one operating system
to another, but common examples include facilities to partition and format hard
drives and floppy disks, file encryption and compression utilities, and task
scheduling programs. These utilities are often implemented as stand-alone programs
and can be run by the user in much the same way as an application program. In
many cases, there are a number of proprietary utility programs on the market that
carry out the same tasks, but with additional value added features.

Utility Software
Utility software is software designed to help to analyze, configure, optimize or
maintain a computer. It is used to support the computer infrastructure – in contrast
to application software, which is aimed at directly performing tasks that benefit
ordinary users. However, utilities often form part of application systems. For
example a batch job may run user-written code to update a database and may then
include a step that runs a utility to back up the database, or a job may run a utility to
compress a disk before copying files.
Although a basic set of utility programs is usually distributed with an operating
system (OS), and this first party utility software is often considered part of the
operating system, users often install replacements or additional utilities. Those
utilities may provide additional facilities to carry out tasks that are beyond the
capabilities of the operating system.
Many utilities that might affect the entire computer system require the user to have
elevated privileges, while others that operate only on the user’s data do not.

UNIT-III
Electronic Payment System Meaning and Methods
An e-payment system is a way of making transactions or paying for goods and
services through an electronic medium, without the use of checks or cash. It’s also
called an electronic payment system or online payment system. Read on to learn
more.
The electronic payment system has grown increasingly over the last decades due to
the growing spread of internet-based banking and shopping. As the world advances
more with technology development, we can see the rise of electronic payment
systems and payment processing devices. As this increase, improve, and provide ever
more secure online payment transactions the percentage of check and cash
transactions will decrease.
Methods of electronic payment system

One of the most popular payment forms online is credit and debit cards. Besides
them, there are also alternative payment methods, such as bank transfers, electronic
wallets, smart cards or bitcoin wallet (bitcoin is the most popular crypto currency).
E-payment methods could be classified into two areas, credit payment systems and
cash payment systems.
1. Credit Payment System
• Credit Card: A form of the e-payment system which requires the use of the
card issued by a financial institute to the cardholder for making payments
online or through an electronic device, without the use of cash.
• E-wallet: A form of prepaid account that stores user’s financial data, like debit
and credit card information to make an online transaction easier.
• Smart card: A plastic card with a microprocessor that can be loaded with
funds to make transactions; also known as a chip card.
2. Cash Payment System
• Direct debit: A financial transaction in which the account holder instructs the
bank to collect a specific amount of money from his account electronically to
pay for goods or services.
• E-check: A digital version of an old paper check. It’s an electronic transfer of
money from a bank account, usually checking account, without the use of the
paper check. E-cash is a form of an electronic payment system, where a
certain amount of money is stored on a client’s device and made accessible for
online transactions.
• Stored-value card: A card with a certain amount of money that can be used to
perform the transaction in the issuer store. A typical example of stored-value
cards are gift cards.

Advantages of electronic payment systems
1. Time savings
Money transfer between virtual accounts usually takes a few minutes, while a wire
transfer or a postal one may take several days. Also, you will not waste your time
waiting in lines at a bank or post office.
2. Expenses control
Even if someone is eager to bring his disbursements under control, it is necessary to
be patient enough to write down all the petty expenses, which often takes a large part
of the total amount of disbursements. The virtual account contains the history of all
transactions indicating the store and the amount you spent. And you can check it
anytime you want. This advantage of electronic payment system is pretty important
in this case.
3. Reduced risk of loss and theft
You can not forget your virtual wallet somewhere and it can not be taken away by
robbers. Although in cyberspace there are many scammers, in one of the previous
articles we described in detail how to make your e-currency account secure.
4. Low commissions
If you pay for internet service provider or a mobile account replenishment through
the UPT (unattended payment terminal), you will encounter high fees. As for the
electronic payment system: a fee of this kind of operations consists of 1% of the total
amount, and this is a considerable advantage.
5. User-friendly
Usually every service is designed to reach the widest possible audience, so it has the
intuitively understandable user interface. In addition, there is always the opportunity
to submit a question to a support team, which often works 24/7. Anyway you can
always get an answer using the forums on the subject.
6. Convenience
All the transfers can be performed at anytime, anywhere. It’s enough to have an
access to the Internet.
Disadvantages of electronic payment systems
1. Restrictions
Each payment system has its limits regarding the maximum amount in the account,
the number of transactions per day and the amount of output.
2. The risk of being hacked
If you follow the security rules the threat is minimal, it can be compared to the risk of
something like a robbery. The worse situation when the system of processing
company has been broken, because it leads to the leak of personal data on cards and
its owners. Even if the electronic payment system does not launch plastic cards, it
can be involved in scandals regarding the Identity theft.

The problem of transferring money between different payment systems- Usually the
majority of electronic payment systems do not cooperate with each other. In this
case, you have to use the services of e-currency exchange, and it can be time-
consuming if you still do not have a trusted service for this purpose. Our article on
how to choose the best e-currency exchanger greatly facilitates the search process.
3. The lack of anonymity
The information about all the transactions, including the amount, time and recipient
are stored in the database of the payment system. And it means the intelligence
agency has an access to this information. You should decide whether it’s bad or good.
4. The necessity of Internet access
If Internet connection fails, you can not get to your online account.
Electronic Payment System: Issues
1. Sophisticated (and Zero-Day) Malware
Malware has gotten very sophisticated, tracking everything from keystrokes to

learning passwords, to infiltrating laptop cameras and microphones. URL scraping
can see where you’ve been online, and bots can be installed in your system without
you ever knowing it. This all adds up to bad actors knowing who you are, what you
do, your passwords, etc. This is all bad news.
With malware and ransomware (encrypting your files until you pay a ransom to a
hacker) on the rise, you must have the latest and greatest security software installed
and running. You also must be vigilant in the links you click, the pages you visit and
the people you interact with online.
2. Poor Patching
Patching is a critical activity for any progressive, security-conscious organization.

Unfortunately, patching demands must be addressed on operating systems,
applications and network infrastructure, making it a bit of a hindrance in some
minds.
It’s important to patch often and completely. Back in 2014, about half of all exploits
went from the publishing of the vulnerability to being hacked in less than a month.
Last year, 99.99 percent of vulnerabilities compromised were done so more than one
year after they were identified.. You must patch frequently and patch often.
3. Application/Middleware Vulnerabilities
Breaching the perimeter is no longer the preferred attack vector. Attackers are now
taking advantage of the proliferation of applications across the typical enterprise.
Most vendors will do the right thing with vulnerabilities and patches, but you must
remain vigilant.
Establish an application security program to address this need. Scan internal apps
and do frequent code reviews. Keep your security program up to date by always
installing the latest versions of all security solutions.

4. Service Providers
Third parties have become a large part of many infrastructures owing to their cost-
savings, expertise and capabilities. Many are trusted with sensitive info, making
them a very tight extension of your organization. Sadly, the Ponemon Institute states
that third-party organizations accounted for (or were involved in) 42 percent of all
data breaches.
Be strict in your third-party service provider evaluations. Ensure they have a solid
track record of security.
5. Failed Understanding of InfoSec and Cyber Risk
We’re sometimes our own worst enemies and what we don’t know can hurt our
organizations. Risk is always seen through the eyes of the risk-taker, and if you’re
unable to articulate the risks, people won’t see them.
Make education a priority. Don’t assume that everyone will value security as highly
as you do. Put yourself in the shoes of the risk-taker and formulate a plan to address
their risks.
6. Mobile and BYOD
Mobile devices are prevalent in our enterprises, and not all of them are company
issued (bring your own device). Unmanaged mobile devices present many threats.
Non-compliant and jail-broken devices are often easy to exploit, and employees
frustrated by multiple-authorization requests may simply get around your controls.
Anticipate this by developing a comprehensive mobile device management (MDM)
strategy and stick to it. Work to understand how your employees are using these
devices and implement policies to address said usage. Also, make it a priority to
know all the devices using your network.
7. Smarter Phishing and Spear Phishing
Phishing used to be easy to identify. Poor spelling and grammar were dead
giveaways, as was the non-personal nature of the email. Well the “Dear sir/madam”
intro has been replaced by very targeted messaging. “CEO Wire Fraud” attacks
accounted for $2.3 billion in losses, according to the FBI. This “spear phishing”
features language that is very specific to the recipient, and often high-level folks with
top access and the ability to authorize payments.
Never authorize access or payments to people you don’t recognize. Follow up with
people in your organization responsible for such things.
8. Cloud Unpreparedness
Everybody is rushing to put their data into the cloud, and it makes sense. The cloud
offers many benefits and is undeniably the way forward, but migrating to the cloud
should be done with care.

It all starts with asking the right questions. Who will own the data? What data should
be in the cloud? What data should be omitted from the cloud? How is data handled
once it is no longer needed? Finally, take the time to understand what data
protection controls YOU are responsible to provide.
9. Over-trusting Encryption
Encryption is a great thing, but it’s not everything. Encryption of data is only as safe
as the encryption type you use and how the keys are managed. Payment Card
Industry (PCI) compliance does not allow encryption to take data out of PCI scope.
Simply put, encryption should be employed as part of a total solution, not as the only
solution.
10. Internet of Things (IoT) Attacks
As a society, we certainly don’t seem to have trust issues when it comes to IoT
devices. But the fact is, if something is internet-enabled, it can be hacked. Cars,
refrigerators and even children’s toys can be accessed by bad actors.
With Gartner estimating that 50 trillion gigs of data will be sent by IoT devices by
2020, hackers are sensing a massive opportunity. Always change passwords and
factory security settings when employing these devices.
Electronic Banking
Electronic banking has many names like e banking, virtual banking, online banking,
or internet banking. It is simply the use of electronic and telecommunications
network for delivering various banking products and services. Through e-banking, a
customer can access his account and conduct many transactions using his computer
or mobile phone.
Types of Electronic Banking: Banks offer various types of services through

electronic banking platforms. These are of three types:-
Level 1: This is the basic level of service that banks offer through their websites.
Through this service, the bank offers information about its products and services to
customers. Further, some banks may receive and reply to queries through e-mail too.
Level 2: In this level, banks allow their customers to submit instructions or
applications for different services, check their account balance, etc. However, banks
do not permit their customers to do any fund-based transactions on their accounts.
Level 3: In the third level, banks allow their customers to operate their accounts for
funds transfer, bill payments, and purchase and redeem securities, etc.
Most traditional banks offer e-banking services as an additional method of providing
service. Further, many new banks deliver banking services primarily through the
internet or other electronic delivery channels. Also, some banks are ‘internet only’
banks without any physical branch anywhere in the country.

Importance of e-banking:We will look at the importance of electronic banking for
banks, individual customers, and businesses separately.
For Banks
• Lesser transaction costs: electronic transactions are the cheapest modes of
transaction
• A reduced margin for human error: since the information is relayed
electronically, there is no room for human error
• Lesser paperwork: digital records reduce paperwork and make the process
easier to handle. Also, it is environment-friendly.
• Reduced fixed costs: A lesser need for branches which translates into a lower
fixed cost.
• More loyal customers: since e-banking services are customer-friendly, banks
experience higher loyalty from its customers.
For Customers
• Convenience: a customer can access his account and transact from anywhere
24x7x365.
• Lower cost per transaction: since the customer does not have to visit the
branch for every transaction, it saves him both time and money.
• No geographical barriers: In traditional banking systems, geographical
distances could hamper certain banking transactions. However, with e-
banking, geographical barriers are reduced.
For Businesses
• Account reviews: Business owners and designated staff members can
access the accounts quickly using an online banking interface. This allows
them to review the account activity and also ensure the smooth functioning of
the account.
• Better productivity: Electronic banking improves productivity. It allows
the automation of regular monthly payments and a host of other features to
enhance the productivity of the business.
• Lower costs: Usually, costs in banking relationships are based on the
resources utilized. If a certain business requires more assistance with wire
transfers, deposits, etc., then the bank charges it higher fees. With online
banking, these expenses are minimized.
• Lesser errors: Electronic banking helps reduce errors in regular banking
transactions. Bad handwriting, mistaken information, etc. can cause errors
which can prove costly. Also, easy review of the account activity enhances the
accuracy of financial transactions.
• Reduced fraud: Electronic banking provides a digital footprint for all
employees who have the right to modify banking activities. Therefore, the
business has better visibility into its transactions making it difficult for any
fraudsters to play mischief.

E-banking in India
In India, since 1997, when the ICICI Bank first offered internet banking services,
today, most new-generation banks offer the same to their customers. In fact, all
major banks provide e-banking services to their customers.
Popular services under e-banking in India
• ATMs (Automated Teller Machines)

• Telephone Banking
• Electronic Clearing Cards
• Smart Cards
• EFT (Electronic Funds Transfer) System
• ECS (Electronic Clearing Services)
• Mobile Banking
• Internet Banking
• Telebanking
• Door-step Banking
Further, under Internet banking, the following services are available in India:
1. Bill payment
Every bank has a tie-up with different utility companies, service providers, insurance
companies, etc. across the country. The banks use these tie-ups to offer online
payment of bills (electricity, telephone, mobile phone, etc.). Also, most banks charge
a nominal one-time registration fee for this service. Further, the customer can create
a standing instruction to pay recurring bills automatically every month.
2. Funds transfer
A customer can transfer funds from his account to another with the same bank or
even a different bank, anywhere in India. He needs to log in to his account, specify
the payee’s name, account number, his bank, and branch along with the transfer
amount. The transfer is effected within a day or so.
3. Investing
Through electronic banking, a customer can open a fixed deposit with the bank
online through funds transfer. Further, if a customer has a demat account and a
linked bank account and trading account, he can buy or sell shares online too.
Additionally, some banks allow customers to purchase and redeem mutual fund units
from their online platforms as well.
4. Shopping
With an e-banking service, a customer can purchase goods or services online and
also pay for them using his account.

Electronic Stock Trading
Electronic trading is easy: Log in to your account. Select the security you wish to buy
or sell. Click the mouse or tap your screen, and the transaction takes place. From an
investor’s perspective, it’s simple and easy. But behind the scenes, it is a complex
process backed by an impressive array of technology. What was once associated with
shouting traders and wild hand gestures has now become more closely associated
with statisticians and computer programmers.
1)First Step: Open an Account
The first step is to open an account with a brokerage firm. This can be done
electronically or by completing and mailing the appropriate forms. You will need to
provide personal information, such as your name and address, that enables the firm
to identify you, along with a bit of information about your investing experience level.
Then the brokerage firm can evaluate whether the account you are seeking is
appropriate. For example, if you have no experience trading stocks but wish to open
an account that lets you trade using borrowed money (a margin account), your
application may be denied.
The account-opening process also enables you to designate electronic pathways
between your bank account and brokerage account so that money can move in either
direction. Should you wish to add more money to your investable pool, you can move
it from your bank account to your brokerage account simply by logging in to your
account. Similarly, if your investments have generated gains and you need that
money to pay bills, you can move from your brokerage account to your bank without
making any phone calls. If you don’t have a bank account, you can set up a money
market account with the brokerage firm and use it in a manner similar to a bank
account.
These electronic conveniences require computer equipment, such as servers, and
human oversight to make sure everything is set up properly and works as planned.
The technological requirements become even more complex when you are ready to
trade.
2)Research before Trading
Before you place an order, you will likely want to learn about the security you are
considering for purchase. Most brokerage websites offer access to research reports
that will help you make your decision and real-time quotes that tell how much the
security is trading for at any given time. The research reports are updated
periodically and loaded to the website when you access them. The quotes are a far
more complex issue, as the technology must keep track of thousands of data points
relating to stock prices and deliver that data to you instantly upon request.
When you actually place an order, the infrastructure level required to support the
process increases. Programming and technology must facilitate order entry and the
variety of choices that it entails.
First, you have the option to select your choice of order types. Market orders execute
immediately. Limit orders can be set to execute only at a certain price, within a
certain time limit ranging from immediately to anytime within a period of months.
These choices are available simultaneously to all investors using the system and must
work in real-time.

The purchase price and share quantity requested must be conveyed to the
marketplace, which requires the computer system at the brokerage firm where the
order was placed to interact with computer systems on the securities exchange where
the shares will be purchased. The systems at the exchange must instantly and
simultaneously interact with the systems at all of the brokerage firms, either offering
shares for sale or seeking to purchase shares.
To complicate matters further, the electronic interface must include all exchanges
(Nasdaq, NYSE, etc.) from which an investor may choose to purchase a security. The
interaction between systems must execute transactions and deliver the best price for
the trade. To prove to regulators like the Securities and Exchange Commission (SEC)
that the trade was executed in a timely and cost-effective fashion, the systems must
maintain a record of the transaction.
The computerized matching engine must perform a high volume of transactions
every minute the market is open for business and do so instantly and flawlessly.
Backup systems are necessary to make sure investors have access to their accounts
and can trade every minute the markets are open. Security industry regulators, such
as the SEC, also need access to the information contained in investors’ accounts.
How Information Is Protected?
That data is held at the Depository Trust Company, which is a recordkeeper
responsible for maintaining details for all shareholders in the United States. The
DTCC is a holding company consisting of five clearing corporations and one
depository, making it the world’s largest financial services corporation dealing in
post-trade transactions. This central repository serves as a backstop, enabling
investors to recover account information in the event the brokerage firm responsible
for facilitating the investor’s trades goes out of business.
Once the trade has been made, the transaction must be confirmed with both buyer
and seller. The data must be sent back out to the systems that collect and display
pricing to other market participants to facilitate trading in the broader marketplace.
Trading Records Kept
A record of the transaction must be stored, so that data is available for client
statements and for clients to access online when they log into their brokerage
accounts. On an ongoing basis, the system must capture data for corporate actions
like dividends and capital gains, not only to keep the investor’s account balance up to
date and accurate but also to facilitate tax reporting. Enormous volumes of data must
continually be tracked, captured and transmitted.
The system must also be able to facilitate both periodic and regularly scheduled
recurring transactions. Everything from transfers to and from the investor’s personal
bank account to ongoing transfers between accounts for account funding, bill
payment, estate settlement and a variety of other transactions must be supported.
Risks
Electronic trading is integral to the financial markets. Everything from technological
glitches to outright fraud can impair the smooth and efficient functioning of those
markets, costing brokerage firms money and calling into question the credibility of
the financial system. Even minor glitches, such as the “flash crash” of May 6, 2010,

can wreak havoc. The flash crash was a brief trading glitch that caused the Dow
Jones Industrial Average to plunge 998.5 points in just 20 minutes. More than $1
trillion in market value disappeared. To rectify the situation and make investors
whole, 21,000 trades were canceled—all because of a single glitch, triggered by an
order placed in the futures market on a brokerage firm’s computer system, which
caused panic trading to spill over to the equity markets.
Electronic trading is amazingly complex and extraordinarily fast. It offers instant
access to an impressive array of securities and markets. The data support includes all
the reporting functions an investor needs and all the data that regulators require. It
includes a secure environment for personal account details and an industrywide
repository designed to ensure no data is lost. Despite the high trading volume, the
system is incredibly reliable. It’s a modern technological marvel, and it’s available to
you to use for just a few dollars per trade.
• Electronic trading involves setting up an account with a brokerage of your

choice, including providing your contact and financial information to facilitate
electronic transfers between your bank and the brokerage.
• When you place an order, the complex technology enables the brokerage to
interact with all the securities exchanges looking to execute trades, while those
exchanges simultaneously interact with all the brokerages.
• A computerized matching engine performs a high volume of trades each
minute, and all work is backed up and accessible to be reviewed by investors,
market makers and government regulators.
• All information is protected and stored by the Depository Trust Company, a
recordkeeper of all financial transactions made by U.S. shareholders,
therefore guaranteeing that no information is lost.
Online share Trading Advantages

Convenience: In order to become a successful online trader or investor, all you
need to do is to open a trading account on a reliable brokerage platform. So long as
you have a reliable internet connection, you are not bound by time or place. You can
transact successfully and make money from your home, office or your child’s annual
theatre performance. Online share trading or investment does not force you to take
time away from your other obligations. Hence, online trading offers greater
convenience, accessibility and comfort. Additionally, it enables you to save time that
would have been otherwise wasted in traveling to brick-and-mortar brokerage
offices.
Affordability: In online share trading, the fee charged by the share-brokers is lower
than the commission expected by traditional brokerages. Additionally, if you trade in
a substantial volume of stocks, you can even negotiate the broker’s fees. Thus, the
above reasons make online trading or investing more affordable than the traditional
method.
Ease of monitoring: Online share trading offers investors advanced interfaces
through which they can remotely monitor how their money is doing throughout the
day. They can trade, invest, buy and sell shares at their leisure and can use their
phone or computer to evaluate their profit or loss. Online trading ensures that
investors never have to leave their money unsupervised on the market and it allows
the trading process to be continuous and uninterrupted.

Faster: Online trading is faster and more efficient than traditional methods of
trading. This is because online transactions are almost instantaneous and stocks can
be bought and sold at a moment’s notice over the internet. Online traders can trade
whenever they want to, instead of being hamstrung until they are able to contact
their brokers and the broker is able to place their order. Additionally, when working
online, investors can easily review all their options and make independent choices
instead of being completely dependent on the broker to tell them where to invest
their money. As a result, online investors have greater control over their own money
and can transact at higher speeds than their traditional counterparts. Due to the
nature of the stock-market, this speed can be of vital importance to a trader.

UNIT-IV
Data Warehousing
The term “Data Warehouse” wa s first coined by Bill Inmon in 1990. According to
Inmon, a data warehouse is a subject oriented, integrated, time-variant, and non-
volatile collection of data. This data helps analysts to take informed decisions in an
organization.
An operational database undergoes frequent changes on a daily basis on account of
the transactions that take place. Suppose a business executive wants to analyze
previous feedback on any data such as a product, a supplier, or any consumer data,
then the executive will have no data available to analyze because the previous data
has been updated due to transactions.
A data warehouses provides us generalized and consolidated data in
multidimensional view. Along with generalized and consolidated view of data, a data
warehouses also provides us Online Analytical Processing (OLAP) tools. These tools
help us in interactive and effective analysis of data in a multidimensional space. This
analysis results in data generalization and data mining.
Data mining functions such as association, clustering, classification, prediction can
be integrated with OLAP operations to enhance the interactive mining of knowledge
at multiple level of abstraction. That’s why data warehouse has now become an
important platform for data analysis and online analytical processing.
Understanding a Data Warehouse
• A data warehouse is a database, which is kept separate from the organization’s

operational database.
• There is no frequent updating done in a data warehouse.
• It possesses consolidated historical data, which helps the organization to
analyze its business.
• A data warehouse helps executives to organize, understand, and use their data
to take strategic decisions.
• Data warehouse systems help in the integration of diversity of application
systems.
• A data warehouse system helps in consolidated historical data analysis.
Features of Data Warehouse

(i) Subject Oriented:A data warehouse is subject oriented because it provides
information around a subject rather than the organization’s ongoing operations.
These subjects can be product, customers, suppliers, sales, revenue, etc. A data
warehouse does not focus on the ongoing operations, rather it focuses on modelling
and analysis of data for decision making.
(ii) Integrated: A data warehouse is constructed by integrating data from
heterogeneous sources such as relational databases, flat files, etc. This integration
enhances the effective analysis of data.

(iii) Time Variant: The data collected in a data warehouse is identified with a
particular time period. The data in a data warehouse provides information from the
historical point of view.
(iv) Non-volatile: Non-volatile means the previous data is not erased when new
data is added to it. A data warehouse is kept separate from the operational database
and therefore frequent changes in operational database is not reflected in the data
warehouse.
Data Warehouse Applications
As discussed before, a data warehouse helps business executives to organize, analyze,
and use their data for decision making. A data warehouse serves as a sole part of a
plan-execute-assess “closed-loop” feedback system for the enterprise management.
Data warehouses are widely used in the following fields:
• Financial services
• Banking services
• Consumer goods
• Retail sectors
• Controlled manufacturing
Types of Data Warehouse

Information processing, analytical processing, and data mining are the three types of
data warehouse applications that are discussed below:
• Information Processing: A data warehouse allows to process the data

stored in it. The data can be processed by means of querying, basic statistical
analysis, reporting using crosstabs, tables, charts, or graphs.
• Analytical Processing: A data warehouse supports analytical processing of
the information stored in it. The data can be analyzed by means of basic OLAP
operations, including slice-and-dice, drill down, drill up, and pivoting.
• Data Mining: Data mining supports knowledge discovery by finding hidden
patterns and associations, constructing analytical models, performing
classification and prediction. These mining results can be presented using the
visualization tools.
Functions of Data Warehouse Tools and Utilities
• Data Extraction: Involves gathering data from multiple heterogeneous

sources.
• Data Cleaning: Involves finding and correcting the errors in data.
• Data Transformation: Involves converting the data from legacy format to
warehouse format.
• Data Loading: Involves sorting, summarizing, consolidating, checking
integrity, and building indices and partitions.
• Refreshing: Involves updating from data sources to warehouse.

Operational
Data Warehouse (OLAP)
Database(OLTP)
It involves historical processing of
1 It involves day-to-day processing.
information.
OLAP systems are used by knowledge
OLTP systems are used by clerks,
2 workers such as executives, managers,
DBAs, or database professionals.
and analysts.
3 It is used to analyze the business. It is used to run the business.
4 It focuses on Information out. It focuses on Data in.
It is based on Star Schema, Snowflake
It is based on Entity Relationship
5 Schema, and Fact Constellation
Model.
Schema.
6 It focuses on Information out. It is application oriented.
7 It contains historical data. It contains current data.
It provides summarized and It provides primitive and highly
8
consolidated data. detailed data.
It provides summarized and It provides detailed and flat
9
multidimensional view of data. relational view of data.
The number of users is in
10 The number of users is in hundreds.
thousands.
The number of records accessed is in The number of records accessed
11
millions. is in tens.
The database size is from 100GB to 100 The database size is from 100 MB
12
TB. to 100 GB.
13 These are highly flexible. It provides high performance.
Data warehousing is the process of constructing and using a data warehouse. A data
warehouse is constructed by integrating data from multiple heterogeneous sources
that support analytical reporting, structured and/or ad hoc queries, and decision
making. Data warehousing involves data cleaning, data integration, and data
consolidations.
Using Data Warehouse Information
There are decision support technologies that help utilize the data available in a data
warehouse. These technologies help executives to use the warehouse quickly and
effectively. They can gather data, analyze it, and take decisions based on the
information present in the warehouse. The information gathered in a warehouse can
be used in any of the following domains:

• Tuning Production Strategies: The product strategies can be well tuned by
repositioning the products and managing the product portfolios by comparing
the sales quarterly or yearly.
• Customer Analysis: Customer analysis is done by analyzing the customer’s
buying preferences, buying time, budget cycles, etc.
• Operations Analysis: Data warehousing also helps in customer relationship
management, and making environmental corrections. The information also
allows us to analyze business operations.
Integrating Heterogeneous Databases: To integrate heterogeneous databases,

we have two approaches
• Query-driven Approach
• Update-driven Approach
1. Query-Driven Approach
This is the traditional approach to integrate heterogeneous databases. This approach
was used to build wrappers and integrators on top of multiple heterogeneous
databases. These integrators are also known as mediators.
Process of Query-Driven Approach
(i) When a query is issued to a client side, a metadata dictionary translates the query
into an appropriate form for individual heterogeneous sites involved.
(ii) Now these queries are mapped and sent to the local query processor.
(iii) The results from heterogeneous sites are integrated into a global answer set.
Disadvantage of Query-Driven Approach
• Query-driven approach needs complex integration and filtering processes.

• This approach is very inefficient.
• It is very expensive for frequent queries.
• This approach is also very expensive for queries that require aggregations.
2. Update-Driven Approach
This is an alternative to the traditional approach. Today’s data warehouse systems
follow update-driven approach rather than the traditional approach discussed
earlier. In update-driven approach, the information from multiple heterogeneous
sources are integrated in advance and are stored in a warehouse. This information is
available for direct querying and analysis.
Advantage of Update-Driven Approach
This approach has the following advantages
• This approach provide high performance

• The data is copied, processed, integrated, annotated, summarized and
restructured in semantic data store in advance.
• Query processing does not require an interface to process data at local
sources.

Client-Server Computing
In client server computing, the clients request a resource and the server provides that
resource. A server may serve multiple clients at the same time while a client is in
contact with only one server. Both the client and server usually communicate via a
computer network but sometimes they may reside in the same system.
An illustration of the client server system is given as follows:
Client/Server computing is a computing model in which client and server computers

communicate with each other over a network. In client/server computing, a server
takes requests from client computers and shares its resources, applications and/or
data with one or more client computers on the network, and a client is a computing
device that initiates contact with a server in order to make use of a shareable
resource.
From the first client/server computing model introduced at Xerox PARC in the 1970s
to today’s highly advanced client server computing networks, our client/server
computing dictionary offers a glossary of key terms you need to know.
Characteristics of Client Server Computing
The salient points for client server computing are as follows:
• The client server computing works with a system of request and response. The
client sends a request to the server and the server responds with the desired
information.
• The client and server should follow a common communication protocol so
they can easily interact with each other. All the communication protocols are
available at the application layer.
• A server can only accommodate a limited number of client requests at a time.
So it uses a system based to priority to respond to the requests.
• Denial of Service attacks hindera servers ability to respond to authentic client
requests by inundating it with false requests.
• An example of a client server computing system is a web server. It returns the
web pages to the clients that requested them.

Difference between Client Server Computing and Peer to Peer
Computing:The major differences between client server computing and peer to
peer computing are as follows:
• In client server computing, a server is a central node that services many client
nodes. On the other hand, in a peer to peer system, the nodes collectively use
their resources and communicate with each other.
• In client server computing the server is the one that communicates with the
other nodes. In peer to peer to computing, all the nodes are equal and share
data with each other directly.
• Client Server computing is believed to be a subcategory of the peer to peer
computing.
Advantages of Client Server Computing:The advantages of client server

computing are:
• All the required data is concentrated in a single place i.e. the server. So it is
easy to protect the data and provide authorisation and authentication.
• The server need not be located physically close to the clients. Yet the data can
be accessed efficiently.
• It is easy to replace, upgrade or relocate the nodes in the client server model
because all the nodes are independent and request data only from the server.
• All the nodes i.e clients and server may not be build on similar platforms yet
they can easily facilitate the transfer of data.
Disadvantages of Client Server Computing
• The different disadvantages of client server computing are:

• If all the clients simultaneously request data from the server, it may get
overloaded. This may lead to congestion in the network.
• If the server fails for any reason, then none of the requests of the clients can be
fulfilled. This leads of failure of the client server network.
• The cost of setting and maintaining a client server model are quite high.
Data Mining
Data mining is a process used by companies to turn raw data into useful
information. By using software to look for patterns in large batches of data,
businesses can learn more about their customers to develop more effective marketing
strategies, increase sales and decrease costs. Data mining depends on effective data
collection, warehousing, and computer processing.
Data Mining is defined as extracting information from huge sets of data. In other
words, we can say that data mining is the procedure of mining knowledge from data.
The information extracted can be used for any of the following applications:
• Market Analysis
• Fraud Detection
• Customer Retention
• Production Control
• Science Exploration

Data Mining Working
Data mining involves exploring and analyzing large blocks of information to glean
meaningful patterns and trends. It can be used in a variety of ways, such as database
marketing, credit risk management, fraud detection, spam Email filtering, or even to
discern the sentiment or opinion of users.
The data mining process breaks down into five steps. First, organizations collect data
and load it into their data warehouses. Next, they store and manage the data, either
on in-house servers or the cloud. Business analysts, management teams and
information technology professionals access the data and determine how they want
to organize it. Then, application software sorts the data based on the user’s results,
and finally, the end-user presents the data in an easy-to-share format, such as a
graph or table.
Data Warehousing and Mining Software

Data mining programs analyze relationships and patterns in data based on what
users request. For example, a company can use data mining software to create classes
of information. To illustrate, imagine a restaurant wants to use data mining to
determine when it should offer certain specials. It looks at the information it has
collected and creates classes based on when customers visit and what they order.
In other cases, data miners find clusters of information based on logical relationships
or look at associations and sequential patterns to draw conclusions about trends in
consumer behavior. Warehousing is an important aspect of data mining.
Warehousing is when companies centralize their data into one database or program.
With a data warehouse, an organization may spin off segments of the data for specific
users to analyze and use.

However, in other cases, analysts may start with the data they want and create a data
warehouse based on those specs. Regardless of how businesses and other entities
organize their data, they use it to support management’s decision-making processes.
Example of Data Mining
Grocery stores are well-known users of data mining techniques. Many supermarkets
offer free loyalty cards to customers that give them access to reduced prices not
available to non-members. The cards make it easy for stores to track who is buying
what, when they are buying it and at what price. After analyzing the data, stores can
then use this data to offer customers coupons targeted to their buying habits and
decide when to put items on sale or when to sell them at full price.
Data mining can be a cause for concern when a company uses only selected
information, which is not representative of the overall sample group, to prove a
certain hypothesis.
Data mining Tools and Techniques
Data mining techniques are used in many research areas, including mathematics,
cybernetics, genetics and marketing. While data mining techniques are a means to
drive efficiencies and predict customer behavior, if used correctly, a business can set
itself apart from its competition through the use of predictive analysis.
Web mining, a type of data mining used in customer relationship management,
integrates information gathered by traditional data mining methods and techniques
over the web. Web mining aims to understand customer behavior and to evaluate
how effective a particular website is.
Other data mining techniques include network approaches based on multitask
learning for classifying patterns, ensuring parallel and scalable execution of data
mining algorithms, the mining of large databases, the handling of relational and
complex data types, and machine learning. Machine learning is a type of data mining
tool that designs specific algorithms from which to learn and predict.
Benefits of Data Mining
In general, the benefits of data mining come from the ability to uncover hidden
patterns and relationships in data that can be used to make predictions that impact
businesses.
Specific data mining benefits vary depending on the goal and the industry. Sales and
marketing departments can mine customer data to improve lead conversion rates or
to create one-to-one marketing campaigns. Data mining information on historical
sales patterns and customer behaviors can be used to build prediction models for
future sales, new products and services.
Companies in the financial industry use data mining tools to build risk models and
detect fraud. The manufacturing industry uses data mining tools to improve product
safety, identify quality issues, manage the supply chain and improve operations.

Website Management Meaning and Steps
Website management entails a number of different services that are combined
together so you don’t have to worry about running your website. Essentially, when
you contract out to a company like ours to manage your website, we do all of the
website related work and all you need to do is tell us what you need.
Management can be broken down into three major categories: Security, content
management, and website support.
1. Website Security:Website security is the most important component of any

good website management service. All websites are under constant attack by
hackers and cyber criminals. The vast majority of these attacks are automated
and are designed to use your website as a platform to infect your visitors’
computers or phish for information. Making sure your site is secure and that
the architecture on which it is built is up-to-date is a vital component of any
management service. It includes both passive management like setting up
good firewalls and things to block potential hackers, and active management
which includes things like malware scans and updating your website
architecture.
2. Content Management:This is the second big component of any website

management service. A website should be a static object that never gets
updated or improved. The single most important thing you can to do make
your website successful is to regularly add content. Adding content to a
website is not as simple as pasting some text and clicking publish. Content
management includes things like posting blog posts, adding photographs,
fixing website pages, and the like. For example, if you run a restaurant, you
will want to keep your menu up to date and add any seasonal menus or
specials to the website. Chances are, you don’t want to be hassled to do these
things and it is easier to outsource this to an outside company where all you
have to do is send them an e-mail and they will do it for you. An important
factor to good content management is optimizing the content for the web.
Properly formatting content for the web is an art and a science, and it requires
understanding of both HTML but SEO as well. This is also true for posting
images, which should be optimized both with tags but compressed in size so
they keep your website fast.
3. Website Support: I like to lump the rest of the activities into general
website support. This is going to encompass a wide range of things. For
example, if you want to tweak the layout of the website or change the
navigation menu it would be part of your website management service. We
also include some other services under this umbrella including adding email
addresses, helping with forgotten passwords, and answering any questions
you may have related to your website or your online business presence. All
websites require management whether it is being outsourced to a company
like Taikun Inc. or it is being done by an employee in house. For many
companies, it is far more cost effective to outsource these tasks to a firm that
specializes in it, as it is difficult and more expensive to find an employee who
is effective at all aspects of management.

Eight Easy Steps to Managing Your Website Development
Managing your website development need not cause you sleepless nights, providing
you learn the secrets of successful project management. Perform the best practices in
project management and give your project the best chance of success.
1. Define Objectives
Objectives guide everyone on the project to your final goals. Are your objectives to
sell your product online, to provide customer support, to promote investor relations?
Carefully decide and clearly document your objectives.
Decide the critical success factors – the things at the end of the project which tell you
if you’ve been successful. Make them measurable so you know if you’ve achieved
them. For example, the website development should result in an increase in online
sales of 25% by year end.
2. Stakeholder Analysis
A stakeholder is someone with an interest in your project’s success (or failure).

Decide who they are and whether they support your project. Perform stakeholder
analysis by classifying them (high or low) according to how motivated they are in
helping (or blocking) your project and how influential (high or low) they are.
Highly influential and supportive people are your allies. Gain their support whenever
you can. Aim to reduce the influence of people who are both highly influential and
against your project as these people could act to damage your project.
During your stakeholder analysis, draw up strategies for dealing with each group of
stakeholders.
3. Deliverables
Deliverables are tangible things produced during the project. Talk with key
stakeholders to help define deliverables. Will your website design include web page
layouts and sitemap for use by the programming team? What is the content for each
page? Write all this down. Key stakeholders must review and agree the deliverables
accurately reflect what they expect to be delivered.
4. Project Planning
Define how you will arrive at your objectives. This involves planning how many
people, resources and budget are required. If delivering this in house, decide what
activities are required to produce each deliverable.
For example, you might decide a web designer will develop page layouts and
navigation diagrams. You might decide the marketing team will supply all product
details and photographs. You might decide the finance manager will set up merchant
and payment gateway accounts to enable ecommerce transactions via your website. If
outsourcing work, specify exactly what the sub-contractor should deliver. Estimate
the time and effort required for each activity and decide realistic schedules and
budget. Ensure key stakeholders review and agree the plan and budget.

5. Communication Planning
Hold a kick off meeting with the team and explain the plan. Ensure everyone knows
exactly what the schedule is, and what is expected of them.
For example, the web designer needs to know that he is to produce page layouts and
navigation diagrams based upon the marketing manager’s requirements. He needs to
know his expected start and end times.
Share your project communication plan with the team. This should include details of
report templates, frequency of reporting and meetings, and details of how conflicts
between teams and their members will be resolved.
6. Project Tracking
Constant monitoring of variations between actual and planned cost, schedule and
scope is required. Report variations to key stakeholders and take corrective actions if
variations occur. To get a project back on track you will need to juggle cost, scope and
schedule.
Suppose your programmer hits technical problems which threaten to delay the
project. You might recover time by re-organising or shortening remaining tasks. If
that’s not possible, you might consider increasing the budget to employ an additional
programmer, or consider reducing the scope in other areas.
Be aware that any adjustments you make to the plan might affect the quality of
deliverables. If you need to increase the budget, seek approval from the project
sponsor.
7. Change Management
Once started, all projects change. Decide a simple change strategy with key
stakeholders. This could be a committee which decides to accept or reject changes
which comprises of you and one or more key stakeholders.
Assess the impact of each change on scope, cost and schedule. Decide to accept or
reject the change. Be aware that the more changes you accept the less chance you
have of completing the project on time and within budget unless you reduce scope in
other areas. Suppose the marketing manager wants to add a pop-up window to
display full size photographs of products. Assess the impact of this change. You
might need to remove some remaining tasks to include this change and stay within
budget. Or, it might be impossible to include the change without increasing the
budget or schedule.Don’t blindly accept changes without assessing the impact or
your project will overrun.
8. Risk Management
Risks are events which can adversely affect the success of the project. Identify risks to
a project early. Decide if each risk is likely or unlikely to occur. Decide if its impact on
the project is high or low. Risks that are likely to occur and have high impact are the
severest risks. High impact but unlikely risks, or low impact but likely risks pose a
medium threat. Unlikely and low impact risks pose the least threat.

What is website management and its use?
Website management involves many activities including software updates, data
backup, website hosting and content updates. It might also include SEO work,
software development, content development, visitor analysis and much more. Most
businesses should actively manage their website to get the best business benefit from
it.
What does a website manager do?
A website manager is responsible for making sure a website delivers what it was
designed to provide. This might be a technical solution such as a banking website or
a lead generation website used to help with business growth.
CMS on a website
CMS stands for Content Management System. It’s software that helps people with no
coding expertise run and manage a website. Examples of popular content
management systems are WordPress, Joomla and Craft.
What is CMS software?
CMS or Content Management Software helps non-technical website managers and
editors run and manage a website without the need for any technical expertise.
What is maintenance of a website?
Maintenance of a website involves many things, including keeping the website
software updated and secure. It also includes creating copies or backups of the site to
safeguard against loss.
Does it cost money to run a website?
Yes. At a minimum, websites require hosting on a server that’s permanently
connected to the internet. This creates a cost.
Do websites need maintenance?
Generally, yes. Most websites are built using a CMS or content management system.
This needs to be periodically updated and backed up.
Why is maintaining your website important?
A website can be a valuable asset for a business or organization, and a lack of
maintenance could result in the site being lost. As a website is often the first place a
person looks when they need information about an organization, keeping the site
maintained is very important.
What does website maintenance include?
Website maintenance usual includes hosting, software updates and backups. It can
also include content updates and SEO.
What does website maintenance mean?
Website maintenance means any work that’s carried out to ensure a website remains
fit for purpose.

UNIT-V
ERP Meaning and Functions
Enterprise resource planning (ERP) refers to a type of software that
organizations use to manage day-to-day business activities such as accounting,
procurement, project management, risk management and compliance, and supply
chain operations. A complete ERP suite also includes enterprise performance
management, software that helps plan, budget, predict, and report on an
organization’s financial results.
ERP systems tie together a multitude of business processes and enable the flow of
data between them. By collecting an organization’s shared transactional data from
multiple sources, ERP systems eliminate data duplication and provide data integrity
with a single source of truth.
Enterprise resource planning (ERP) is the integrated management of main business
processes, often in real time and mediated by software and technology.
ERP is usually referred to as a category of business management software typically a
suite of integrated applicationsthat an organization can use to collect, store, manage,
and interpret data from many business activities.
ERP provides an integrated and continuously updated view of core business
processes using common databases maintained by a database management system.
ERP systems track business resources cash, raw materials, production capacity and
the status of business commitments: orders, purchase orders, and payroll. The
applications that make up the system share data across various departments
(manufacturing, purchasing, sales, accounting, etc.) that provide the data. ERP
facilitates information flow between all business functions and manages connections
to outside stakeholders.
Enterprise system software is a multibillion-dollar industry that produces
components supporting a variety of business functions. IT investments have become
the largest category of capital expenditure in United States-based businesses over the
past decade. Though early ERP systems focused on large enterprises, smaller
enterprises increasingly use ERP systems.
The ERP system integrates varied organizational systems and facilitates error-free
transactions and production, thereby enhancing the organization’s efficiency.
However, developing an ERP system differs from traditional system development.
ERP systems run on a variety of computer hardware and network configurations,
typically using a database as an information repository.
The Business Value of ERP
It’s impossible to ignore the impact of ERP in today’s business world. As enterprise
data and processes are corralled into ERP systems, businesses can align separate
departments and improve workflows, resulting in significant bottom-line savings.
Examples of specific business benefits include:
• Improved business insight from real-time information generated by reports

• Lower operational costs through streamlined business processes and best
practices
• Enhanced collaboration from users sharing data in contracts, requisitions, and
purchase orders
• Improved efficiency through a common user experience across many business
functions and well-defined business processes
• Consistent infrastructure from the back office to the front office, with all
business activities having the same look and feel
• Higher user-adoption rates from a common user experience and design
• Reduced risk through improved data integrity and financial controls
• Lower management and operational costs through uniform and integrated
systems
Functions of ERP
While any business may have different uses for ERP, there are six key functions that
are found most commonly in the software.
1. Human Resources
An HR module should be able to process tasks related to managing your employees,
including payroll, timesheets, benefits, onboarding and offboarding. The HR module
should automate payments, including deductions so, for example, an hourly
employee’s wages are automatically calculated based on her timesheet, benefits and
taxes are deducted and the net pay is automatically deposited into her bank account.
2. Customer Relationship Management (CRM)
A CRM module stores data related to customers and prospects, giving employees
insights that can improve sales and marketing processes. For example, CRM can
track customer buying habits, so you can see what types of products you may be able
to upsell and when the best time may be to offer these products. CRM is especially
useful for an e-commerce business, allowing you to target prospects with ads that are
meaningful to them. A CRM module can also track when prospects have been
contacted and what was discussed, eliminating additional sales calls that may not be
appropriate.
3. Business Intelligence (BI)
A BI module can help business leaders make well-informed decisions based on
meaningful and timely data from any department as needed. This module can
analyze practically any business process and provide reports without any excess
information. Reports can be in a visual format or presented in tables, depending on
the manager’s preferences.
4. Supply Chain Management (SCM)
An SCM module usually works with an inventory management system to improve the
efficiency of a company’s supply chain by using real-time data to optimize
manufacturing and distribution processes. This can give you the ability to intervene
when a problem happens, rather than waiting to find out the next day or later. More
than that, today’s SCM software can track and analyze these processes to predict
when a problem is likely to occur. An example of this is the ability to notify customers
when orders are being processed and shipped in real-time.

5. Inventory Management System
An inventory management system module processes order fulfillment and tracks
warehouse inventory, greatly reducing the need to track inventory manually. This is
very useful to manufacturers or companies with their own distribution centers where
tracking inventory can become extremely complex. Features can include real-time
inventory on the company’s website to inform customers what is and what isn’t in
stock.
6. Financial Management
Just about every business with an ERP will use a financial management module. It
works in conjunction with the other ERP components to track the flow of money,
from the purchase of new supplies to paying employees and issuing invoices to
customers. Financial management software in an ERP can also help you budget,
produce financial forecasts and give you insights into where costs can be reduced.
SAP Applications
SAP stands for Systems Applications and Products in Data Processing. SAP, by
definition, is also the name of the ERP (Enterprise Resource Planning) software as
well as the name of the company. SAP Software is a European multinational, founded
in 1972 by Wellenreuther, Hopp, Hector, Plattner, and Tschira. They develop
software solutions for managing business operations and customer relationships.
SAP system consists of a number of fully integrated modules, which covers virtually
every aspect of business management.
Basically, SAP is a German software company whose products enable businesses to
track customer and business interactions. SAP is especially renowned for its
Enterprise Resource Planning (ERP) and data management programs. An ERP is
basically a rational representation of the business, thus an ERP helps in making the
significant transactions and real-time reporting.
But how does SAP helps in managing the enterprise SAP environments? Well, the
SAP application services are the processes and methodologies in order to maintain
and enhance the enterprise environments. The SAP application services include
development, integration, testing, implementation, maintenance and support and
also help the desk devices. It also comprises of application monitoring as well as
back-up and recovery of applications and interfaces.
To conclude, SAP provides a planning ability and a company can produce valuable
data in order to make a forecast. This forecast can then be further fed into SAP. Then
SAP automatically generates the purchase orders to buyers with quantity and
specifications. SAP can also be used in tracking and monitoring when the money is
due to be paid to vendors and whenever it is due to be taken from the customers.
Other Competitive products of SAP Software in the market are Oracle, Microsoft
Dynamics, etc.
History of SAP
The product of five ex-IBM employees, SAP started in 1972 as a small software
company in Germany with just one customer. The company’s name stands for
Systems, Applications & Products. Its founders had a vision of producing software

that could process data when a user wanted it, rather than in overnight batches as
earlier software did. Their first product was a modification of IBM’s punch-card data
storage, which stored data mechanically and required overnight processing. For their
client, the German branch of Imperial Chemical Industries, SAP developed a real-
time payroll and punch-card system in 1972.
SAP’s ERP started as R/2, named for its real-time architecture and two servers. In
later years it was called R/3, for three servers: the application server, production
server, and database server. In 2006, SAP released the latest version, ECC 6.0, and in
2013 an Enhancement Package (EHP7) was released.
SAP Functions
SAP is the world’s largest enterprise applications software company – as measured
by software and service-related revenue – with 172,000 customers around the globe.
Unlike many of its competitors, SAP has mostly grown organically and has just a few
significant acquisitions under its belt. Much of SAP’s customer base consists of very
large enterprise accounts. However, they have made significant gains in the small
and medium enterprise (SME) market with their Business All-in-One, Business
ByDesign and Business One product lines.
SAP offers a wide range of enterprise resource planning (ERP) applications including
customer relationship management (CRM), financial management, human capital
management, product lifecycle management, and supply chain management. They
also have a large network of partners (i.e. the SAP Ecosystem) that provide unique
integration and customization offerings for specific markets. For example, Et Alia
has developed CREW All-in-One for the construction industry, which is built on SAP
Business All-in-One.
In addition to its ERP products, SAP offers several business analytics applications as
part of its Business Objects product line. Business Objects is one of SAP’s more
notable acquisitions which was announced back in 2007. This acquisition pushed
SAP into the business intelligence (BI) leaders circle with IBM, Oracle and Microsoft.
They are reinforcing their position with recent innovations such as SAP HANA, their
in-memory technology that allows organizations to run queries from multiple data
sources in real time. Click on one of the links below to learn more about a specific
SAP product, application or industry solution.
Business Intelligence
Business Intelligence is a set of processes, architectures, and technologies that
convert raw data into meaningful information that drives profitable business actions.
It is a suite of software and services to transform data into actionable intelligence and
knowledge.
BI has a direct impact on organization’s strategic, tactical and operational business
decisions. BI supports fact-based decision making using historical data rather than
assumptions and gut feeling.
BI tools perform data analysis and create reports, summaries, dashboards, maps,
graphs, and charts to provide users with detailed intelligence about the nature of the
business.

Business Intelligence;Importance
• Measurement: creating KPI (Key Performance Indicators) based on historic

data
• Identify and set benchmarks for varied processes.
• With BI systems organizations can identify market trends and spot business
problems that need to be addressed.
• BI helps on data visualization that enhances the data quality and thereby the
quality of decision making.
• BI systems can be used not just by enterprises but SME (Small and Medium
Enterprises)
Business Intelligence implementation: Steps:

Step 1. Raw Data from corporate databases is extracted. The data could be spread
across multiple systems heterogeneous systems.
Step 2. The data is cleaned and transformed into the data warehouse. The table can
be linked, and data cubes are formed.
Step 3. Using BI system the user can ask quires, request ad-hoc reports or conduct
any other analysis.
Types of Business intelligence:

1. The Professional Data Analyst
The data analyst is a statistician who always needs to drill deep down into data. BI
system helps them to get fresh insights to develop unique business strategies.
2. The IT users
The IT user also plays a dominant role in maintaining the BI infrastructure.
3. The head of the company
CEO or CXO can increase the profit of their business by improving operational
efficiency in their business.
4. The Business Users
Business intelligence users can be found from across the organization. There are
mainly two types of business users
• Casual business intelligence user

• The power user.
The difference between both of them is that a power user has the capability of
working with complex data sets, while the casual user need will make him use
dashboards to evaluate predefined sets of data.

Advantages of Business Intelligence
1. Boost productivity
With a BI program, It is possible for businesses to create reports with a single click
thus saves lots of time and resources. It also allows employees to be more productive
on their tasks.
2. To improve visibility
BI also helps to improve the visibility of these processes and make it possible to
identify any areas which need attention.
3. Fix Accountability
BI system assigns accountability in the organization as there must be someone who
should own accountability and ownership for the organization’s performance against
its set goals.
4. It gives a bird’s eye view
BI system also helps organizations as decision makers get an overall bird’s eye view
through typical BI features like dashboards and scorecards.
5. It streamlines business processes
BI takes out all complexity associated with business processes. It also automates
analytics by offering predictive analysis, computer modeling, benchmarking and
other methodologies.
6. It allows for easy analytics
BI software has democratized its usage, allowing even nontechnical or non-analysts
users to collect and process data quickly. This also allows putting the power of
analytics from the hand’s many people.
Disadvantage of Business intelligence System

1. Cost
Business intelligence can prove costly for small as well as for medium-sized
enterprises. The use of such type of system may be expensive for routine business
transactions.
2. Complexity
Another drawback of BI is its complexity in implementation of datawarehouse. It can
be so complex that it can make business techniques rigid to deal with.
3. Limited use
Like all improved technologies, BI was first established keeping in consideration the
buying competence of rich firms. Therefore, BI system is yet not affordable for many
small and medium size companies.
4. Time Consuming Implementation
It takes almost one and half year for data warehousing system to be completely
implemented. Therefore, it is a time-consuming process.

Trends in Business Intelligence: The following are some business intelligence and
analytics trends that you should be aware of:-
• Artificial Intelligence: Gartner’ report indicates that AI and machine

learning now take on complex tasks done by human intelligence. This
capability is being leveraged to come up with real-time data analysis and
dashboard reporting.
• Collaborative BI: BI software combined with collaboration tools, including
social media, and other latest technologies enhance the working and sharing
by teams for collaborative decision making.
• Embedded BI: Embedded BI allows the integration of BI software or some
of its features into another business application for enhancing and extending
it’s reporting functionality.
• Cloud Analytics: BI applications will be soon offered in the cloud, and more
businesses will be shifting to this technology. As per their predictions within a
couple of years, the spending on cloud-based analytics will grow 4.5 times
faster.
Examples of Business Intelligence System used in Practice

Example 1
In an Online Transaction Processing (OLTP) system information that could be fed

into product database could be
• Add a product line

• Change a product price
Correspondingly, in a Business Intelligence system query that would beexecuted for

the product subject area could be did the addition of new product line or change in
product price increase revenues
In an advertising database of OLTP system query that could be executed
• Changed in advertisement options

• Increase radio budget

Correspondigly, in BI system query that could be executed would be how many new
clients added due to change in radio budget
In OLTP system dealing with customer demographic data bases data that could be
fed would be
• Increase customer credit limit

• Change in customer salary level
Correspondingly in the OLAP system query that could be executed would be can
customer profile changes support support higher product price
Example 2
A hotel owner uses BI analytical applications to gather statistical information
regarding average occupancy and room rate. It helps to find aggregate revenue
generated per room.
It also collects statistics on market share and data from customer surveys from each
hotel to decides its competitive position in various markets.
By analyzing these trends year by year, month by month and day by day helps
management to offer discounts on room rentals.
Ethics in e-commerce
Although the growth of e-commerce continues to provide businesses with more
opportunities, the e-commerce industry faces many of the same ethical issues as
traditional brick-and-mortar businesses. A key advantage of conducting e-business is
that it gives small businesses access to a broader consumer market so they can
compete with larger businesses. However, it’s up to the business owner to let
customers know that a site is a safe and secure place for them to shop.
1. Establish Core Values: As a major component of a company’s guiding
principles, core values help a small business set priorities and plan for the
future. These are the rules that govern how your company is run. Values give a
company direction while a company code of ethics defines the behavior you
expect your business to exemplify. Identifying a set of business values tells
your customers that you are committed to providing quality service and that
you take responsibility for the business decisions you make. Some companies
publish their business principles on their websites for visitors trafficking the
site to view.
2. Post Your Business Policies: Do you accept returns? Under what
conditions? Do you give cash returns or store credit? Are shipments insured?
Where are you physically located? Do you offer customer support and service?
24/7
Your business policies should be carefully laid out for all to see. There should
be a large link off your home page to a page or two of your company’s policies.
If you guarantee customer satisfaction, tell each customer. If there are
conditions on returns, lay them out clearly. Skip the 6-point text on the back
page (the fine print). Be straight with your customers right from the start.

3. Gain Consumer Trust: Customers are more likely to view your business as
legitimate if your website looks official. For instance, when customers see the
Better Business Bureau seal displayed on your website, they know your
business is making a commitment to meet their needs. A small business owner
looking for accreditation can use the BBB seal to convey the message to
consumers that the business is trustworthy. Consumers can identify if a
business is a member of the Better Business Bureau by looking for the online
BBB seal on the website.
4. Secure Customer Data: Security of information is a major concern even for
a small e-commerce website. It is the responsibility of e-commerce businesses
to protect sensitive consumer data such as addresses, customer account
numbers and bank and credit card information. Secure Socket Layer, more
commonly referred to as SSL, is a system that encrypts information that is
transmitted between the customer and Web server. Data encryption prevents
hackers from gaining access to a customer’s personal and billing information.
Business owners must purchase a SSL certificate for their website’s server.
5. Create Ethical Web Content: Pay special attention to the marketing
materials you include on your website. Avoid publishing misleading
statements that could give consumers the wrong idea about the products you
offer. For example, don’t exaggerate claims about the quality of a product. If
you fail to deliver what you promise, the Internet can work against you as
dissatisfied customers may spread the word to others via social networking
sites. Keep the content on your site current so you continue to offer consumers
reliable information. An additional factor to consider is that while search
engine optimization can bring more traffic to your website, it’s your
responsibility to supply useful and original content. According to SEO
Workers, a group of Internet marketing consultants, websites that fail to offer
valuable information are sometimes viewed as spam
e-commerce Security: Security is an essential part of any transaction that takes
place over the internet. Customers will lose his/her faith in e-business if its security
is compromised. Following are the essential requirements for safe e-
payments/transactions −
• Confidentiality: Information should not be accessible to an unauthorized
person. It should not be intercepted during the transmission.
• Integrity: Information should not be altered during its transmission over the
network.
• Availability: Information should be available wherever and whenever
required within a time limit specified.
• Authenticity: There should be a mechanism to authenticate a user before
giving him/her an access to the required information.
• Non-Repudiability: It is the protection against the denial of order or denial
of payment. Once a sender sends a message, the sender should not be able to
deny sending the message. Similarly, the recipient of message should not be
able to deny the receipt.
• Encryption: Information should be encrypted and decrypted only by an
authorized user.
• Auditability: Data should be recorded in such a way that it can be audited
for integrity requirements.

Measures to ensure Security: Major security measures are following:
• Encryption: It is a very effective and practical way to safeguard the data

being transmitted over the network. Sender of the information encrypts the
data using a secret code and only the specified receiver can decrypt the data
using the same or a different secret code.
• Digital Signature: Digital signature ensures the authenticity of the
information. A digital signature is an e-signature authenticated through
encryption and password.
• Security Certificates: Security certificate is a unique digital id used to
verify the identity of an individual website or user.
Security Protocols in Internet

We will discuss here some of the popular protocols used over the internet to ensure
secured online transactions.
Secure Socket Layer (SSL)
It is the most commonly used protocol and is widely used across the industry. It
meets following security requirements:
• Authentication
• Encryption
• Integrity
• Non-reputability
“https://” is to be used for HTTP urls with SSL, where as “http:/” is to be used for
HTTP urls without SSL.
Secure Hypertext Transfer Protocol (SHTTP)
SHTTP extends the HTTP internet protocol with public key encryption,
authentication, and digital signature over the internet. Secure HTTP supports
multiple security mechanism, providing security to the end-users. SHTTP works by
negotiating encryption scheme types used between the client and the server.
Secure Electronic Transaction
It is a secure protocol developed by MasterCard and Visa in collaboration.
Theoretically, it is the best security protocol. It has the following components:
• Card Holder’s Digital Wallet Software: Digital Wallet allows the card
holder to make secure purchases online via point and click interface.
• Merchant Software: This software helps merchants to communicate with
potential customers and financial institutions in a secure manner.
• Payment Gateway Server Software: Payment gateway provides
automatic and standard payment process. It supports the process for
merchant’s certificate request.
• Certificate Authority Software: This software is used by financial
institutions to issue digital certificates to card holders and merchants, and to
enable them to register their account agreements for secure electronic
commerce.

E-Governance
Electronic governance or e-governance is the application of information and
communication technology (ICT) for delivering government services, exchange of
information, communication transactions, integration of various stand-alone
systems and services between government-to-citizen (G2C), government-to-business
(G2B), government-to-government (G2G), government-to-employees (G2E) as well
as back-office processes and interactions within the entire government framework.
Through e-governance, government services are made available to citizens in a
convenient, efficient, and transparent manner. The three main target groups that can
be distinguished in governance concepts are government, citizens, and
businesses/interest groups. In e-governance, there are no distinct boundaries.
Benefits of E-governance
• Reduced corruption
• High transparency
• Increased convenience
• Growth in GDP
• Direct participation of constituents
• Reduction in overall cost.
• Expanded reach of government
Through e-governance, the government plans to raise the coverage and quality of
information and services provided to the general public, by the use of ICT in an easy,
economical and effective manner. The process is extremely complicated which
requires, the proper arrangement of hardware, software, networking and indeed re-
engineering of all the processes to facilitate better delivery of services.
Types of Interactions in E-Governance

1. G2G (Government to Government)
When the exchange of information and services is within the periphery of the
government, is termed as G2G interaction. This can be both horizontal, i.e. among
various government entities and vertical, i.e. between national, state and local
government entities and within different levels of the entity.
2. G2C (Government to Citizen)
The interaction amidst the government and general public is G2C interaction. Here
an interface is set up between government and citizens, which enables citizens to get
access to wide variety of public services. The citizens has the freedom to share their
views and grievances on government policies anytime, anywhere.
3. G2B (Government to Business)
In this case, the e-governance helps the business class to interact with the
government seamlessly. It aims at eliminating red-tapism, saving time, cost and
establish transparency in the business environment, while interacting with
government.

4. G2E (Government to Employees)
The government of any country is the biggest employer and so it also deals with
employees on a regular basis, as other employers do. ICT helps in making the
interaction between government and employees fast and efficient, along with raising
their level of satisfaction by providing perquisites and add-on benefits.
E-governance can only be possible if the government is ready for it. It is not a one
day task, and so the government has to make plans and implement them before
switching to it. Some of the measures include Investment in telecommunication
infrastructure, budget resources, ensure security, monitor assessment, internet
connectivity speed, promote awareness among public regarding the importance,
support from all government departments and so forth
E-governance has a great role to play, that improves and supports all tasks
performed by the government department and agencies, because it simplifies the
task on the one hand and increases the quality of work on the other.

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What are the different types of e-commerce interactions?

What are the different types of e-commerce interactions?

What are some of the advantages of e-commerce?

What are some of the advantages of e-commerce?

E-Commerce

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e-commerce: Meaning, Characteristics, Advantages and Disadvantages

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Types of e-commerce Models:Electronic commerce can be classified into four

1. Business to Business:This is Business to Business transactions. Here the

2. Business to Consumer:Business to Consumer. Here the company will sell

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4. Consumer to Business:This is the reverse of B2C, it is a consumer to

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• Have a clear understanding of company’s overall growth objectives.

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3. Driving new users to the site

4. Getting existing users more engaged

• Continually optimize and fine-tune the product/pricing offering to match

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• Invest in customer CRMs as a central repository to track all client profile,

• The PC market is actually declining, while the mobile market is exploding—

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2. Shopping Cart and Checkout Process

4. Calls to Action (CTA)

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5. Images and Descriptions

Some sort of customer support needs to be available in case of any problems or

7. Security and Privacy

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Traditional Commerce E-Commerce

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• Advertising and marketing: Organic search engine traffic, pay-per-click,

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• Using e-commerce, organizations can expand their market to national and

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• It provides 24×7 support. Customers can enquire about a product or service

Uses of Technologies of E-Commerce

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Modern shopping habits involve a process of cross-channel research, consideration,

• Video Chat: Allows your business to interact face-to-face with customers

• Failing to provide a mobile-oriented shopping experience will lose your brand

• Chatbots: Chatbots are excellent conversational marketing tools, capable of

5. AI and chatbots for customer communications

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Mobile commerce is founded upon the increasing adoption of electronic commerce.

M-Commerce benefits for business

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2. Better customer experience

3. Direct connection to customers (push notifications)

Knowing your customers equals prosperity in business these days. Knowing

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