PRACTICAL – 1

Study of an E-Commerce Website

AIM: The practical consists of studying the applications of E-Commerce
and E-Business. Based on the same, the students are required to design an E-
Commerce website on paper. The website should be designed by taking
into consideration all the advantages of E-Commerce. The practical will
help the students to understand the forthcoming contents of the subject
in a better fashion.

The minimum contents to be taught in the lab prior to assigning students the
task of creating a website are as follow:

“Electronic Commerce is the buying and selling of products or services over

electronic systems such as the Internet and other computer networks.”

Electronic Commerce, commonly known as E-Commerce, is the cutting edge for

business today. The amount of trade conducted electronically has grown
dramatically since the world-wide introduction of the Internet. A wide variety of
commerce is conducted in this way, such as electronic funds transfer, supply
chain management, e-marketing, online marketing, online transaction
processing, electronic data interchange (EDI), etc.

Examples or Applications of E-Commerce

1) Online Shopping

Buying and selling goods on the Internet is one of the most popular examples
of e-commerce. Sellers create storefronts that are the online equivalents of
retail outlets. Buyers browse and purchase products with mouse clicks.
Though Amazon.com is not the pioneer of online shopping, it is arguably the
most famous online shopping destination.

2) Electronic Payments

When you are buying goods online, there needs to be a mechanism to pay
online too. That is where payment processors and payment gateways come into
the picture. Electronic payments reduce the inefficiency associated with writing
and mailing checks. It also does away with many of the safety issues that arise
due to payment made in currency notes. For example, online deduction from
savings account for payment of insurance or monthly bills etc.
3) Online Auctions

The Internet has made auctions accessible to a large number of buyers and
sellers. Online auctions are also an efficient mechanism for price discovery. An
example of online auction website is eBay.com.

4) Internet Banking

Today it is possible for you to perform the entire gamut of banking operations
without visiting a physical bank branch. Interfacing of websites with bank
accounts, i.e. viewing recent transactions, checking the current balance, etc., is
the biggest driver of E-commerce.

5) Online Ticketing

Air tickets, movie tickets, train tickets, play tickets, and just about any kind of
tickets can be booked online. Online ticketing does away with the need to
queue up at ticket counters.

6) Teleconferencing or Teleseminar

A teleconference or teleseminar is the live exchange of information among

several persons and machines remote (distant) from one another but linked by
a telecommunications system. For example, attending online lecture sessions
that include paying for the sessions.

7) Newsgroups

A newsgroup is a repository that shares messages posted from many users in

different locations. Certain newsgroups are accessible for free whereas; the
paid newsgroups refer to an application of e-commerce.

E-Business
Definition: “E-Business is conducting business processes online to deliver
additional values to customer.”

Examples or Applications of E-Business

1) Email marketing:

Email marketing to existing customers and prospects is an e-business activity,

as it electronically conducts a business process - in this case marketing.
2) Online Inventory Management System:

An online system that tracks inventory and triggers alerts at specific levels is
also e-business. Inventory management is a business process. When facilitated
electronically, it becomes part of e-business.

3) Content Management System:

A content management system that manages the work flow between content-
developer, editor, manager, and publisher is another example of e-business. In
the absence of an electronic work flow, the physical movement of paper files
would conduct this process. By electronically enabling it, we are now in the
realm of e-business.

4) Online Induction Programs:

An online induction program for new employees automates part or whole of its
offline counterpart.

E-commerce versus E-business

E-commerce necessarily involves monetary transactions electronically whereas E-
business uses Information Technology to enhance the business.

Advantages of E-commerce

1) Overcomes 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.

2) Gaining New Customers with Search Engine Visibility

Physical retail (i.e. physical selling) is driven by branding and relationships. In

addition to these two drivers, online retail is also driven by traffic from search
engines. Usually, the customers follow a link in search engine results, and land
up on an e-commerce website that they have never heard of. This additional
source of traffic can be a great benefit for some e-commerce businesses.

3) Lowered Costs

One of the most substantial advantages 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:

i. 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.

ii. Real Estate: An e-commerce merchant does not need a prominent

physical location.

4) Locating the Product Quicker

On an e-commerce website, customers easily navigate or use a search box to

immediately narrow down their product search. Some websites remember
customer preferences and shopping lists to facilitate repeat purchase.

5) Eliminates Travel Time and Cost

Customers generally have to travel long distances to reach their preferred

physical store. E-commerce allows them to visit the same store virtually, with a
few mouse clicks. For purchase of e-books or a music file, e-commerce is faster
than purchasing goods from a physical store.

6) Providing 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) Providing 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.

8) Creates 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. This, 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. In addition, Amazon.com may also email you about related
products.

9) Remains Open All the Time

Online store timings are 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.

10) Create Markets for Niche Products

Buyers and sellers of niche products (related 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.

Websites like Amazon, Dell, Flip kart, Nokia, etc. can be created. The
students are required to design a website based on their knowledge of E-
Commerce gained in class rooms and lab.
 PRACTICAL – 2

Designing Business Model for the Proposed Website

AIM: The practical intends to study e-commerce business model and
ultimately make the students design a business model of any website. For
the same purpose, the students should be taught the following basic
concepts of E-Commerce business model and should be asked to design
the model for the website they have proposed in the previous practical.

“A business model is a set of planned activities (sometimes referred to as

business processes) designed to result in a profit in a marketplace.”

An e-commerce business model aims to use and leverage the unique qualities
of the Internet and the World Wide Web.

A business model must effectively addresses the eight key elements listed as
follows:

Table 1: KEY ELEMENTS OF A BUSINESS MODEL

COMPONENTS KEY QUESTIONS

Value proposition Why should the customer buy from you?

Revenue model How will you earn money?
What marketspace do you intend to serve, and what is
Market opportunity
its size?
Competitive
Who else occupies your intended marketspace?
environment
Competitive What special advantages does your firm bring to the
advantage marketspace?
How do you plan to promote your products or services
Market strategy
to attract your target audience?
Organizational What types of organizational structures within the firm
development are necessary to carry out the business plan?
What kinds of experiences and background are
Management team
important for the company’s leaders to have?

A detailed explanation of each of the above stated key elements is as follows:

1) Value Proposition

To develop and/or analyze a firm’s value proposition, it is required to

understand why customers will choose to do business with the firm instead of
another company and what the firm provides that other firms do not and
cannot. From the consumer point of view, successful e-commerce value
propositions include: reduction of product search costs, better offers, reduction
of price discovery costs, and facilitation of transactions by managing product
delivery, etc.

Before Amazon existed, most customers personally traveled to book retailers to

place an order. In some cases, the desired book might not be available and the
customer would have to wait several days or weeks, and then return to the
bookstore to pick it up. Amazon makes it possible for book lovers to shop for
virtually any book in print from the comfort of their home or office, 24 hours a
day, and to know immediately whether a book is in stock. Amazon’s primary
value propositions are unparalleled selection and convenience.

2) Revenue Model

A firm’s revenue model describes how the firm will earn revenue, generate
profits, and produce a superior return on invested capital. The terms revenue
model and financial model can be used interchangeably. The function of
business organizations is both to generate profits and to produce returns on
invested capital that exceed alternative investments.

The profits from the business constitute the return on invested capital, and
these returns must be greater than the merchant could obtain elsewhere, say,
by investing in real estate or just putting the money into a savings account.

3) Market opportunity

The term market opportunity refers to the company’s intended marketspace

and the overall potential financial opportunities available to the firm in that
marketspace.

Marketspace refers to the area of actual or potential commercial value in which

a company intends to operate.

4) Competitive Environment

A firm’s competitive environment refers to the other companies selling

similar products and operating in the same marketspace. It also refers to the
presence of substitute products and potential new entrants to the market.
Firms typically have both direct and indirect competitors. Direct competitors
are those companies that sell products and services that are very similar and
into the same market segment. For example, Kingfisher Airlines and SpiceJet,
both of whom sell discount airline tickets online, are direct competitors
because both companies sell identical products—cheap tickets. Indirect
competitors are companies that may be in different industries but still compete
indirectly because their products can substitute for one another. For instance,
automobile manufacturers and airline companies operate in different
industries, but they still compete indirectly because they offer consumers
alternative means of transportation.

The existence of a large number of competitors in any one segment may be a

sign that the market is saturated and that it may be difficult to become
profitable. On the other hand, a lack of competitors could either signal a
market that has already been tried without success because there is no money
to be made.

5) Competitive Advantage

Firms achieve a competitive advantage when they can produce a superior

product and/or bring the product to market at a lower price than most, or all,
of their competitors.

Maybe the firm has a patent on a product that others cannot imitate, or a
brand name and popular image that other firms cannot duplicate.

One rather unique competitive advantage derives from being first mover. A first-
mover advantage is a competitive market advantage for a firm that results
from being the first into a marketplace with a serviceable product or service. If
first movers develop a loyal following or a unique interface that is difficult to
imitate, they can sustain their first-mover advantage for long periods. Amazon
provides a good example. However, most first movers lack the complimentary
resources needed to sustain their advantages, and often follower firms reap the
largest rewards.

Companies that are slow followers gain knowledge from failure of pioneering
firms and enter into the market late but still earn good marketspace and
revenue.
6) Market Strategy

Everything you do to promote your company’s products and services to

potential customers is known as marketing. Market strategy is the plan you
put together that details exactly how you intend to enter a new market and
attract new customers.

7) Organizational Development

Companies that hope to grow and thrive need to have a plan for organizational
development that describes how the company will organize the work that
needs to be accomplished. Typically, work is divided into functional
departments, such as production, shipping, marketing, customer support, and
finance.

Typically, in the beginning, generalists who can perform multiple tasks are
hired. As the company grows, recruiting becomes more specialized. For
instance, at the outset, a business may have one marketing manager. But after
two or three years of steady growth, that one marketing position may be
broken down into seven separate jobs done by seven individuals.

8) Management Team

A strong management team may not be able to salvage a weak business model,
but the team should be able to change the model and redefine the business as
it becomes necessary. The challenge is to find people who have both the
experience and the ability to apply that experience to new situations.

The students are required to answer the key questions of all the
components of the business model.

PRACTICAL – 3

Survey on Internet 2

AIM: The practical aims at understanding the concept of Semantic Web

and its impact on E-Commerce. The students are required to read the
papers on Internet2 attached herewith and prepare a summary and review
on the paper.
 PRACTICAL – 4

Case Study: Amazon.com

AIM: The aim of the practical is to make the students understand the
issues that might occur with E-Commerce website owners. The students
should be asked to make an in-depth study of the case given below and
answer the questions based on the contents of the case.

In 1994, a 29-year-old financial analyst and fund manager named Jeff Bezos
became intrigued by the rapid growth of the Internet. Looking for a way to
capitalize on this hot new marketing tool, he made a list of 20 products that
might sell well on the Internet. After some intense analysis, he determined that
books were at the top of that list. Although Bezos liked the name Abracadabra,
he decided to call his online bookshop Amazon.com. Today, Amazon.com has
more than 40 million customers and sells billions of dollars worth of all types
of merchandise.

When he started, Bezos had no experience in the book-selling business, but he

realized that books had an ideal shipping profile for online sales. He believed
that many customers would be willing to buy books without inspecting them in
person and that books could be impulse purchase items if properly promoted
on a Web site. By accepting orders on its Web site, Bezos believed that
Amazon.com could reduce transaction costs in the sale to the customer.

More than 4 million book titles are in print at any one time throughout the
world, and more than 1 million of those are in English. However, the largest
physical bookstore cannot stock more than 200,000 books and carries even
fewer titles because bookstores stock more than one copy of each title. Having
a wide selection was important because Bezos believed it would help create a
network economic effect. People would visit Amazon.com whenever they wanted
to buy a book because it would be the most likely store (physical or online) to
have a particular title. After becoming satisfied customers, people would return
to Amazon.com to buy more books and would eventually stop looking
elsewhere.

The structure of the supply side of the book business was equally important to
Amazon.com’s success. Music CDs, which were second on Bezos’ list, were
produced by a few major recording companies who could easily control
Amazon.com’s supply. In contrast, there were a large number of book
publishers, none of which held a dominant position in the book-selling
marketplace. Thus, it was unlikely that a single supplier could restrict Bezos’
supply of books or enter his market as a competitor. He decided to locate his
firm in Seattle, close to a large pool of programming talent and near one of the
largest book distribution warehouses in the world. These supply factors were
important because Bezos wanted to develop efficiencies that would allow
Amazon.com to reduce transaction costs for its purchases as well as its sales
transactions.

Bezos encouraged early customers to submit reviews of books, which he posted

with the publisher’s information about the book and with reviews written by
Amazon.com employees. This customer participation served as a substitute for
the corner bookshop staff’s friendly advice and recommendations. Bezos saw
the power of the Internet in reaching small, highly focused market segments,
but he realized that his comprehensive bookstore could not be all things to all
people. Therefore, he created a sales associate program in which Web sites
devoted to a particular topic, such as model railroading, could provide links to
Amazon.com books that related to that topic. In return, Amazon.com remits a
percentage of the referred sales to the owner of the referring site.

Although Bezos’ original vision was to create an online bookstore with the
world’s best selection, Amazon has moved into other product lines where
opportunities for network economic effects and transaction cost reductions
looked promising. In 1998, Amazon.com began selling music CDs and
videotapes. The Web site’s software can track a customer’s purchases and
recommend similar book, CD, or video titles. In fact, the site can recommend
related products in a variety of product categories now sold on Amazon.com.
These product categories include consumer electronics, computers, toys,
clothing, art, tools, hardware, housewares, furniture, and car parts.

By paying attention to every process involved in buying, promoting, selling, and

shipping consumer goods, and by working to improve each process continually
Bezos and Amazon.com have become one of the first highly visible success
stories in electronic commerce. In fact, Amazon.com now generates significant
revenue by supplying other sellers of consumer goods with the technology to
sell those goods online. One of its first partnerships was with Toys R Us, a
company that had experienced difficulties in selling online and making
deliveries on time in the 1999 holiday shopping season. Toys R Us signed an
agreement with Amazon.com in 2000 that placed Toys R Us products on the
Amazon.com Web site. Amazon.com would accept the orders on its Web site
and would ship products to customers for Toys R Us in exchange for a
percentage of each sale. Amazon.com also agreed not to sell toys itself or on
behalf of other partners for whom it might provide online sales services in the
future. For example, when Amazon agreed to sell Target products online, it
could not sell Target’s toy lines on its Web site. (Target is the third largest toy
retailer in the world, behind Wal-Mart and Toys R Us.)

In addition to the online sales services Amazon.com provides to Toys R Us,

Target, Borders, CDNow, and other large companies, it provides similar
services to many smaller companies with its zShops offering. In zShops, small
retailers become members of an online shopping mall on Amazon’s site.

Toys R Us sells more than $300 million worth of toys each year through the
Amazon.com site. Both Toys R Us and Amazon.com benefit from the network
economics effect they obtain by having toys available for sale on Amazon.com’s
well-known electronic commerce site. Many small retailers in the zShops
program who sell toys also benefit because shoppers visit the Amazon.com site
looking for toys. When a site visitor searches for a toy, the zShops retailers’
offerings are presented on the search results page along with results from Toys
R Us, Amazon.com, and other companies for which Amazon.com provides
online sales services.

Required:

1. In 2004, Toys R Us sued Amazon.com for violating terms of the agreement

between the companies (specifically, Toys R Us objected to Amazon.com’s
permitting toys to be sold on its zShops Web pages). Amazon.com responded by
filing a countersuit. Prepare a report of about 200 words in which you
summarize the current state of the litigation.

2. Outline the advantages and disadvantages that Amazon.com would have

considered before it made the agreement with Toys R Us to limit competing toy
sales. In about 200 words, summarize these advantages and disadvantages,
and then evaluate Amazon.com’s decision to enter such an agreement.

3. In about 200 words, outline specific recommendations to Amazon.com for

negotiating a settlement with Toys R Us that would benefit both companies.
 PRACTICAL – 5

Case Study: Nissan Motors and Nissan Computers

AIM: The practical aims to make the students understand the legal and
ethical environment of E-Commerce. Based on the case given below, they
are required to answer the questions given after the passage.

The Nissan Motor Company of Japan had sold its cars in the United States
under the brand name Datsun for many years. In the late 1980s, the company
changed its branding policy and began selling cars in the U.S. market with the
name of Nissan. However, the company did not realize that the Web would
become an important marketing tool and did not register the name nissan.com
as soon as it became available.

Nissan was not the only auto company to miss an opportunity to register its
brand’s domain name early. General Motors had registered the domain gm.com
in 1992, but it had not registered generalmotors.com. The company had to
purchase that name from Gil Vanorder, who had registered it in
1997.Vanorder’s site featured a cigar-smoking, uniform-wearing cartoon
character named “General John C. Motors.” Volkswagen (which had registered
vw.com when it first became available) successfully sued Virtual Works (an
ISP) to obtain the domain name vw.net.

Other auto companies have purchased or sued (with mixed results) to obtain
domain names that included their product brand names. DaimlerChrysler was
able to purchase dodge.com in 2001 from the London financial software
company that had registered it originally. Ford had to sue National A-1
advertising to obtain the right to use lincoln.com. However, Ford was
unsuccessful in its attempts to obtain mercury.com. That name is still used by
the New York City information technology services company, Mercury
Technologies that first registered the name.

In 1991, Uzi Nissan formed a company named Nissan Computer Corp. in North
Carolina to sell computer hardware and provide related repair and consulting
services. Nissan’s company also offered networking hardware for sale, along
with related services. In 1994, the company registered the name nissan.com. In
1996, the company registered the domain name nissan.net and began offering
ISP services to individuals and companies at that Web site.

In 1995, he received a letter from a lawyer representing Nissan Motor

Company. The letter requested information about how Nissan was planning to
use the domain name nissan.com. Since he was operating a computer
company and Nissan was an auto company, Nissan decided there would be no
potential confusion in customers’ minds about the relationship (or lack
thereof) between Nissan Computer and Nissan Motors. Nissan did not respond
to the letter. The lawyer did not follow up with any other contact, so Nissan
considered the issue closed.

In 2000, Nissan Motors sued Nissan Computer under the U.S. Anti-cyber-
squatting Consumer Protection Act for $10 million and the exclusive right to
use the names nissan.com and nissan.net. Uzi Nissan argued in court that he
was just using his family name (which is a common name in the Middle East)
to which he had a basic right, that he had no intent to profit from the name (he
was unwilling to sell it to Nissan Motors at any price), and that there was little
likelihood that his computer store would be confused in the minds of the
consumers with the international auto company of the same name. Nissan
Motors argued that its brand name was so well known that any alternative use
of the name would be confusing to consumers.

In 2002, opinions issued by the California Superior Court and the U.S. Ninth
Circuit District Court held that Nissan Computer had not acted in bad faith
when it acquired the disputed domain names. However, the court ruled that
Nissan Computer could no longer use the domain names for commercial
purposes because of the potential confusion it could create in the minds of
consumers. Nissan Computer would have to find a different domain name for
its business. The court also ordered that Nissan could not place any
advertising on his Web sites at nissan.com or nissan.net and prohibited him
from placing disparaging remarks or negative commentary about Nissan
Motors (or links to such remarks or commentary) on the two sites. The court
did not, however, order the transfer of the two domain names to Nissan Motor.

The Online Companion includes links to the Web sites operated today by
Nissan Computer and Nissan Motors.

Required:

1. U.S. courts sometimes appoint advisors (often called Special Masters) to

help them decide cases that involve complex business or technical issues.
Assume you are a business advisor to a court that is hearing an appeal of
the Nissan Motor Co. v. Nissan Computer Corp case. In about 200 words,
explain why Nissan Motors is so concerned about the use of these two
domain names and how a monetary damages judgment of $10 million could
 be justified (if you do not believe that the monetary damages are justified,
explain why).
2. In about 200 words, provide an outline of the ethics of the position taken by
Uzi Nissan in this dispute.
3. In about 200 words, provide an outline of the ethics of the position taken by
Nissan Motors in this dispute.
4. If you believe that the courts’ decisions in this case are fair to the parties
and the general public, explain why in about 200 words. If you believe that
the courts’ decisions are not fair, outline a decision (in about 200 words)
that you believe would be fair.

PRACTICAL – 6

Survey on Semantic Web

AIM: The practical aims at understanding the concept of Semantic Web

and its impact on E-Commerce. The students are required to read the
papers on Semantic Web attached herewith and prepare a summary and
review on the paper.
 PRACTICAL – 7

Case Study: Second Hand Car Mart

You are an e-commerce consultant and have been approached by a local
publishing business. They currently publish a magazine called Second Hand
Car Mart that offers second hand cars for sale. The cars are advertised by both
individuals and companies looking to sell them. The magazine is published
monthly and has a selling price of Rs. 200. It currently sells around 3,000
copies per issue.

Due to the economic downturn the sales of new cars have dropped
significantly. This has resulted in an increased demand for second hand cars
and the publishers are keen to exploit this. They would like to launch an e-
business site that advertises second hand cars for sale on the Internet. The
intention is that prospective buyers will contact the car sellers and make their
own arrangements to evaluate and purchase the cars. The site will not be
involved in the actual purchasing process, but will simply act as a marketplace
through which buyers and sellers can meet.

The publishers have asked you to assist them in developing the initial plan for
the site. They would like you to focus upon a number of critical elements as far
as the new e-commerce site is concerned.

As part of the practical, you have been asked to undertake the following
activities:

1. Explain various revenue models for selling over the web. Provide a short
report that will summarize your thoughts on the most suitable revenue
model that should be adopted by the e-commerce site, together with your
reasons for making this decision.
2. Develop an outline marketing plan that will help to ensure that the usage of
the site is high and generates the required levels of revenue.
3. Identify three potential domain names for the new site.
4. Produce a list of the key security concerns associated with the use of the e-
commerce site and the appropriate countermeasures that can be adopted.
5. Explain how websites can provide techniques to protect the user's privacy?
 PRACTICAL – 8
A Survey on Enterprise Resource Planning(ERP)

AIM: To study ERP. The students should be asked to survey on ERP and
prepare a report of the same.

 ERP is an integrated computer-based system.

 It is used to manage internal and external resources including assets,
financial resources, materials, and human resources.
 It is a software architecture whose purpose is to facilitate the flow of
information between all business functions inside the boundaries of the
organization and manage the connections to outside stakeholders.
 Built on a centralized database and normally utilizing a common computing
platform.
 ERP systems consolidate all business operations into a uniform and
enterprise wide system environment.

Commercial Application of ERP

1) Manufacturing
2) Supply chain management
3) Financials
4) Project management
5) Human resources
6) Customer relationship management
7) Data services
8) Access control

Advantages of ERP
 Uses single database & common software structure.
 Communication with supply chain members.
 Helps to reduce supply chain members.
 Standardizes processes & eleminates redundant resources while insreasing
productivity.
 Tracks employees' time & performance.
 Integrates finnancial , Production , supply & customer information.
 Disadvantages of ERP
 Much capital investment is needed to implement ERP system.
 There are different softwares and different need of a firm , so firm have to
change software according to their need .

ERP Modules
ERP consists of many modules that are linked together to access & share
the common database.

Most ERP software provides design their products to be compatible with

their competitors' products. The most common ERP modules are:

1) Production Planning Module

In the process of evolution of manufacturing requirements planning into ERP,

while vendors have developed more robust software for production planning,
consulting firms have accumulated vast knowledge of implementing
production planning module. Production planning optimizes the utilization of
manufacturing capacity, parts, components and material resources using
historical production data and sales forecasting.

2) Purchasing Module

Purchase module streamlines procurement of required raw materials. It

automates the processes of identifying potential suppliers, negotiating price,
awarding purchase order to the supplier, and billing processes. Purchase
module is tightly integrated with the inventory control and production planning
modules. Purchasing module is often integrated with supply chain
management software.

3) Inventory Control Module

Inventory module facilitates processes of maintaining the appropriate level of

stock in a warehouse. The activities of inventory control involves in identifying
inventory requirements, setting targets, providing replenishment techniques
and options, monitoring item usages, reconciling the inventory balances, and
reporting inventory status. Integration of inventory control module with sales,
purchase, finance modules allows ERP systems to generate vigilant executive
level reports.
4) Sales Module

Revenues from sales are live blood for commercial organizations. Sales module
implements functions of order placement, order scheduling, shipping and
invoicing. Sales module is closely integrated with organizations' ecommerce
websites. Many ERP vendors offer online storefront as part of the sales module.

5) Marketing Module

ERP marketing module supports lead generation, direct mailing campaign and
more.

6) Financial Module

Both for-profit organizations and non-profit organizations benefit from the

implementation of ERP financial module. The financial module is the core of
many ERP software systems. It can gather financial data from various
functional departments, and generates valuable financial reports such balance
sheet, general ledger, trail balance, and quarterly financial statements.

7) HR Module

HR (Human Resources) is another widely implemented ERP module. HR

module streamlines the management of human resources and human capitals.
HR modules routinely maintain a complete employee database including
contact information, salary details, attendance, performance evaluation and
promotion of all employees. Advanced HR module is integrated with
knowledge management systems to optimally utilize the expertise of all
employees.
 PRACTICAL – 9

Comparison of Proposed Website with Similar Existing Website

AIM: The practical consists of comparing the website prepared by
students against some similar website that already exists on the web. The
students are required to make a comparison on the several points listed
below.

For example, if a student has designed/proposed a website of selling clothes

online, his target website, with which he can compare, may be myntra.com. If
the proposed website is for online booking of tours, etc., the website to be used
for comparison can be makemytrip.com.

Comparison can be on the basis of:

1) Payment method used

2) How products are categorized?
3) Is the website product-based or customer-based?
4) Limitations of both the websites
5) Method of answering user queries
6) Shipping methods used
7) Marketing method used
8) Offers, etc.
 PRACTICAL – 10

E-Commerce and E-Business Softwares

AIM: The aim of the practical is to study the existing E-Commerce and E-
Business Softwares. Few of them are described below.

Supply Chain Management Software

Supply chain management (SCM) software helps companies to coordinate
planning and operations with their partners in the industry supply chains of
which they are members. SCM software performs two general types of
functions: planning and execution. Most companies that sell SCM software
offer products that include both components, but the functions are quite
different. SCM planning software helps companies develop coordinated
demand forecasts using information from each participant in the supply chain.
SCM execution software helps with tasks such as warehouse and
transportation management. The two major firms offering SCM software are i2
Technologies and Manugistics. The i2 Technologies product, RHYTHM, includes
components that manage demand planning, supply planning, and demand
fulfillment. The demand planning module includes proprietary algorithms
customized for specific industry markets that examine customers’ buying
patterns and generate continually updated forecasts. The supply planning
module coordinates distribution logistics, inventory-level forecasting,
collaborative procurement, and supply allocations. The demand fulfillment
module handles the execution elements, including order management,
customer verification, backlog control, and order fulfillment.

The Manugistics SCM product includes a constraint-based master planning

module that controls the other elements of the system. These other elements
include modules for transportation management, replenishment management,
manufacturing planning, scheduling, purchase planning, and materials
control. The cost of SCM software implementations varies tremendously
depending on how many locations (retail stores, wholesale warehouses,
distribution centers, and manufacturing plants) are in the supply chain. For
example, a retailer with 500 stores might pay between $4 million and $10
million for an SCM package that includes both planning and execution
functions, but a wholesaler with only three or four distribution centers might
be able to install a good SCM product for $1 million.
 Content Management Software
Most electronic commerce software comes with wizards and other automated
helpers that create template-driven pages, such as home pages, about pages,
and contact pages. But most businesses want to customize Web pages with
company and product pictures and text. Content management software should
be tested before committing to it. The testing should ensure that company
employees find the software’s procedures for performing regular maintenance
(for example, adding new categories of products and new items to existing
product pages) to be straightforward. The software should also facilitate typical
content creation tasks, such as adding sale-item specials.

Large companies are finding new ways to use the Web to share information
among their employees, customers, suppliers, and partners. Content
management software helps companies control the large amounts of text,
graphics, and media files that have become a key part of doing business. With
the rise of wireless devices, such as mobile phones, handheld computers, and
personal digital assistants (PDAs), content management has become even more
important.

Companies that need many different ways to access corporate information—

for example, product specifications, drawings, photographs, or lab test results
— often choose to manage the information and access to that information using
content management software. The three leading companies that provide these
tools are Documentum, Vignette, and webMethods. Content management
software generally costs between $200,000 and $500,000, but it can cost three
or four times that much to customize, configure, and implement.

Knowledge Management Software

An increasing number of large companies have achieved cost savings by using
content management software. Most content management software is designed
to help companies manage information that, until recently, was stored in paper
reports, schedules, analyses, and memos. Although the cost reductions that
can be obtained by moving mountains of paper into an electronic format are
significant, some companies have begun to understand that the true value of
those documents is in the information contained in them. Thus, they began the
search for systems that would help them manage the knowledge itself, rather
than the documentary representations of that knowledge. The software that
has been developed to meet that goal is called knowledge management (KM)
software.
KM software helps companies do four main things: collect and organize
information, share the information among users, enhance the ability of users to
collaborate, and preserve the knowledge gained through the use of information
so that future users can benefit from the learning of current users. KM
software includes tools that read electronic documents (in formats such as
Microsoft Word or Adobe PDF), scanned paper documents, e-mail messages,
and Web pages. KM software often includes powerful search tools that use
proprietary semantic and statistical algorithms to help users find the content,
human experts, and other resources that can aid them in their research and
decision making tasks.

Most early KM software required companies to build a centralized knowledge

repository before the software could provide users any real benefits. The
building of these repositories required major investments of time and money,
and often disrupted the regular flow of work. More recently developed KM
systems are less obtrusive and allow the collection of knowledge elements to
flow as a natural by-product of the normal interactions users have with
information.

The major software vendors have KM software offerings, including IBM Lotus
Discovery Server and Microsoft SharePoint Technologies. Smaller companies
have also entered the market with innovative KM software and technologies.
Two of the more interesting products are Entopia Quantum and Mirror Worlds
Technologies Scopeware. Total costs for a KM software implementation,
including hardware, software licenses, and consultant fees, typically range
from $50,000 to $1 million or more.
 PRACTICAL – 11

A Survey on Online Payment Methods

AIM: The aim of the practical is to make students identify different
methods of online payment and includes surveying them in-depth.
Further, the students have to survey some popular website like Amazon,
etc. and check out the payment methods and all the included details of
online payment for a minimum of 3 websites.

Payment Cards
Payment card is a general term to describe all types of plastic cards that
consumers (and some businesses) use to make purchases. The main categories
of payment cards are credit cards, debit cards, and charge cards.

 Credit Cards

A credit card, such as a Visa or a MasterCard, has a spending limit based on

the user’s credit history; a user can pay off the entire credit card balance or
pay a minimum amount each billing period. Credit card issuers charge interest
on any unpaid balance.

Consumer is protected by an automatic 30-day period in which he or she can

dispute an online credit card purchase.

Merchants that already accept credit cards in an offline store can accept them
immediately for online payment because they already have established a
mechanism for accepting credit card payments. Online purchases using Credit
Cards are often called card not present transactions and require an extra
degree of security.

 Debit Cards

A debit card looks like a credit card, but it works quite differently. Instead of
charging purchases against a credit line, a debit card removes the amount of
the sale from the cardholder’s bank account and transfers it to the seller’s
bank account.

Debit cards are issued by the cardholder’s bank and usually carry the name of
a major credit card issuer, such as Visa or MasterCard, by agreement between
the issuing bank and the credit card issuer.
Charge Cards

A charge card carries no spending limit, and the entire amount charged to the
card is due at the end of the billing period. Charge cards do not involve lines of
credit and do not accumulate interest charges.

Note: Many consumers have concerns about providing their payment card
numbers to vendors online, especially when the vendor is unknown to them. To
address this concern, several payment card companies now offer cards with
disposable numbers. These cards, sometimes called single-use cards, give
consumers a unique card number that is valid for one transaction only.

 Advantages of Payment Cards

1) Fraud Protection:

For merchants, payment cards provide fraud protection. When a merchant

accepts payment cards for online payment, the merchant can authenticate and
authorize purchases using a payment card processing network.

For consumers of some countries, payment cards are advantageous because

the Consumer Credit Protection Act in some countries limits the cardholder’s
liability to only a certain amount if the card is used fraudulently. Once the
cardholder notifies the card’s issuer of the card theft, the cardholder’s liability
ends.

2) Worldwide acceptance

Payment cards can be used anywhere in the world, and the currency
conversion, if needed, is handled by the card issuer.

3) Consumers do not need to have dedicate hardware or software

For online transactions, payment cards are particularly advantageous. When a

consumer reaches the electronic checkout, he or she enters the payment card
number and his or her shipping and billing information in the appropriate
fields to complete the transaction. The consumer does not need any special
hardware or software to complete the transaction.
4) Security

Payment cards provide built-in security for merchants because merchants have
a higher assurance that they will be paid through the companies that issue
payment cards than through the sometimes slow direct invoicing process.

 Disadvantages of Payment Cards:

Payment cards have one significant disadvantage for merchants when
compared to cash.

1) Processing Fees

Payment card service companies charge merchants per-transaction fees and

monthly processing fees.
Most consumers also pay an annual fee for credit cards and charge cards. This
annual fee is much less common on debit cards.

2) Loss of customers to those who do not use payment cards

Any merchant that does not accept payment cards for purchases risks losing a
significant portion of sales to other merchants that do accept payment cards.

3) High prices when paying through credit cards

The consumer pays no direct transaction-based fees for using payment cards,
but the prices of goods and services are slightly higher than they would be in
an environment free of payment cards.

E-Cash
Electronic cash (also called e-cash or digital cash) is a general term that
describes any value storage and exchange system created by a private
(nongovernmental) entity that does not use paper documents or coins and that
can serve as a substitute for government-issued physical currency.

 How Electronic-Cash Works

To begin using electronic cash, the following steps are to be taken:

1) A consumer opens an account with an electronic cash issuer (such as a

bank that issues electronic cash or a private vendor of electronic cash, such
as PayPal) and presents proof of identity.
2) The consumer can then withdraw electronic cash by accessing the issuer’s
Web site and presenting proof of identity, such as a digital certificate issued
by a certification authority, or a combination of a credit card number and a
verifiable bank account number.
3) After the issuer verifies the consumer’s identity, it gives the consumer a
specific amount of electronic cash and deducts the same amount from the
consumer’s account.
4) In addition, the issuer might charge a small processing fee.
5) The consumer can store the electronic cash in an electronic wallet
(described later in this chapter) on his or her computer, or on a stored-value
card.

 Target Audience for E-Cash:

Small purchases are not profitable for merchants that accept only credit cards
for payment. There is a market for small purchases on the Internet. This is one
potentially significant market for electronic cash.

Electronic cash has another factor in its favor: Most of the world’s populations
do not have credit cards. Many adults cannot obtain credit cards due to
minimum income requirements or past debt problems. Children and teens—
eager purchasers representing a significant percentage of online buyers—are
ineligible, simply because they are too young.

People living in most countries other than the United States hold few credit
cards because they have traditionally made their purchases in cash. For all of
these people, electronic cash provides the solution to paying for online
purchases.

Note: Internet payments for items costing from a few cents to approximately a
dollar are called micropayments. All payments of less than $10 are called
small payments.

 Holding Electronic Cash: Online and Offline Cash

Two widely accepted approaches to holding cash exist today: online storage
and offline storage.

Online cash storage means that the consumer does not personally possess
electronic cash. Instead, a trusted third party—an online bank—is involved in
all transfers of electronic cash and holds the consumers’ cash accounts. Online
systems work by requiring merchants to contact the consumer’s bank to
receive payment for a consumer purchase, which helps prevent fraud by
confirming that the consumer’s cash is valid.

Offline cash storage is the virtual equivalent of money kept in a wallet. The
customer holds it, and no third party is involved in the transaction.

 Double-spending
Double-Spending is spending a particular piece of electronic cash twice by
submitting the same electronic currency to two different vendors. By the time
the same electronic currency clears the bank for a second time, it is too late to
prevent the fraudulent act.

Stored-Value Cards
Today, most people carry a number of plastic cards—credit cards, debit cards,
charge cards, driver’s license, health insurance card, employee or student
identification card, and others.

One solution that could reduce all those cards to a single plastic card is called
a stored-value card.

A stored-value card is a smart card with a microchip or a plastic card with a

magnetic strip that records the currency balance. The main difference is that a
smart card can store larger amounts of information and includes a processor
chip on the card.

 Magnetic Strip Cards

Most magnetic strip cards hold value that can be recharged by inserting them
into the appropriate machines, inserting currency into the machine, and
withdrawing the card; the card’s strip stores the increased cash value.

Magnetic strip cards are passive; that is, they cannot send or receive
information, nor can they increment or decrement the value of cash stored on
the card. The processing must be done on a device into which the card is
inserted.

 Smart Cards

A smart card is a stored-value card that is a plastic card with an embedded

microchip that can store information.
Credit, debit, and charge cards currently store limited information on a
magnetic strip. A smart card can store about 100 times the amount of
information that a magnetic strip plastic card can store.

A smart card can hold private user data, such as financial facts, encryption
keys, account information, credit card numbers, health insurance information,
medical records, and so on.

Smart cards are safer than conventional credit cards because the information
stored on a smart card is encrypted. For example, conventional credit cards
show your account number on the face of the card and your signature on the
back. The card number and a forged signature are all that a thief needs to
purchase items and charge them against your card.

With a smart card, credit theft is much more difficult because the key to
unlock the encrypted information is a PIN; there is no visible number on the
card that a thief can identify, nor is there a physical signature on the card that
a thief can see and use as an example for a forgery.

Electronic Wallets

An electronic wallet (sometimes called an e-wallet), serving a function similar

to a physical wallet, holds credit card numbers, electronic cash, owner
identification, and owner contact information and provides that information at
an electronic commerce site’s checkout counter.

Electronic wallets give consumers the benefit of entering their information just
once, instead of having to enter their information at every site with which they
want to do business.

Electronic wallets make shopping more efficient. When consumers select items
to purchase, they can simply click their electronic wallet to order the items
quickly. E-Wallets also allow tracking purchases and maintaining receipts for
those purchases.

Electronic wallets fall into two categories based on where they are stored.

1) Server-side E-Wallets

A server-side electronic wallet stores a customer’s information on a remote

server belonging to a particular merchant or wallet publisher. The main
weakness of server-side electronic wallets is that a security breach could reveal
thousands of users’ personal information—including credit card numbers—to
unauthorized parties.

Typically, server-side electronic wallets employ strong security measures that

minimize the possibility of unauthorized disclosure.

2) Client-side E-Wallets

A client-side electronic wallet stores a consumer’s information on his or her

own computer. Some client-side wallets require users to download the wallet
software. A disadvantage of client-side wallets is that they are not portable.
There is a need to download software onto every computer used to make
purchases is a chief disadvantage of client-side wallets. For example, a client-
side wallet is not available when a purchase is made from a computer other
than the computer on which the wallet resides.

Server-side wallets, on the other hand, remain on a server and thus require no
download time or installation on a user’s computer.

 Storing on E-Wallets
Before a consumer can use a server-side wallet on a particular merchant’s site,
the merchant must enable that specific wallet. Each wallet vendor must
convince a large number of merchants to enable its wallet before it will be
accepted by consumers. Thus, only a few server-side wallet vendors will be
able to succeed in the market.

In a client-side electronic wallet, the sensitive information (such as credit card

numbers) is stored on the user’s computer instead of the wallet provider’s
central server. This removes the risk that an attack on a client-side electronic
wallet vendor’s server could reveal the sensitive information. However, an
attack on the user’s computer could yield that information. Most security
analysts agree that storing sensitive information on client computers is safer
than storing that information on the vendor server because it requires
attackers to launch many attacks on user computers, which are more difficult
to identify (even though the user computers are less likely than a vendor server
to have strong security features installed).

It also prevents the easily identified servers of the wallet vendors from being
attractive targets for such attacks.
 PRACTICAL 12
Internet Banking
AIM: The aim of the practical is to make students understand Internet
Banking and identify the phishing attacks possible with EC & EB. The
students should also prepare a list of counter-measures against the
phishing attacks possible.

Specific concerns one might have when considering an

online bank.
1) Security

When the matter comes about money the first thing that comes to our mind is
security. As it is online banking there is many chances of misusage or theft of
money hence online banking must assure their customers about security
matters & take major responsibilities on them.

2) Easy understanding

As it is said the more simple it looks, more people would prefer it. So it the GUI
is simple and easy customer can easily access it with little knowledge of the
computer field.

3) Pay high interest on customer deposits.

Customers should be given more interest on their deposits as much as

possible. If online bank provides more interest than customer would prefer
online bank instead of physical bank.

4) FAQ Features

This feature plays important role in online banking. It reduces customer

inquires dramatically.

5) Check images online and offer statements

Online bank should provide this facility that check images are available online
the day after the check is cleared.

6) Stay in touch

Bank should keep on updating recent facilities or new interest rate to

customers through mail, calls, advertisements and post.
7) Transaction should be easy and Acknowledgment should be received
on time.

Transaction should take place in few steps. So no ambiguity arises.

8) At least one physical bank should be there

9) Bank’s survival assurance

Customers have fear about bank getting sold or closed all of a sudden, so
online bankers need to provide their survival assurance.

10) Less transactions fees/ No fees

The Bank should either be charging nominal fees per transaction or should not
be charging anything.

Phishing Threats
 Phishing means the attacker sends email message to a large no. of
recipients stating that his account access is restricted.
 Email that include link which appears like login page and however customer
leads to phishers.
 Personal info of customers may be misused.
 Link shown of different website and when opened, some other website
opens.
 Funds can be withdrawn under his/her name.
 Attackers in order to hide URL they include pop-up windows which exactly
looks like a browser address bar.

Counter Measures against Phishing

 Find source of email
 Assure your own customers that your bank does not send such phishing
mails.
 Frequent pop-ups in your website should alert users.
 Online bankers should find solution by watching other phishing exploits.
 Anti-phishing working groups
 Educate website users and warn your customers.