E-commerce and Networking Technologies

Content

 
Introduction

Through doing the e-commerce project, we expected to gain an understanding of e-commerce, and of the application of networking technologies to e-commerce.

This paper recordes what we have learned in doing the project. The first part of it presents our understanding of e-commerce, and the knowledge of networking technologies used in e-commerce. This knowledge and understanding provides the rationale for the virtual shopping mall we created. The second part of this paper describes what we did and how we did for the Web shopping mall.

By doing the project, we have gained:

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E-commerce

1. What is e-commerce?

"The new mantra is growth, globalization, cycle times, speed and competitiveness… e-business is not a technological change. It’s a fundamental change in the way business will be done…aided, abetted, supported and enabled by technology."

Lou Gerstner, Information Week 2/98

The buzzword, e-commerce or e-business, short for electronic commerce or electronic business, is about using networking technologies to transform the way key business processes are performed.

As businesses confront challenges from such forces as global competition, mergers, and acquisitions, time-tested management structures are putting a strain on corporate bottom lines. In response, companies are breaking down divisional walls and flattening top-heavy management pyramids to create new corporate structures that help them compete more effectively. The technology that is making much of this possible is networking.

Networking and other electronic technologies have not only changed the organizational structures, managerial styles, and corporate culture, but also transformed the ways in which business transactions are done. A confluence of computers and communication technologies has brought efficiency and effectiveness, as well as increased productivity to business processes. The technologies have helped establish a sound close relationship between business and customers. What is more, modern communication technologies have become more and more indispensable to businesses and even the daily life of ordinary people.

2. The advantages of e-commerce
The primary benefits of e-business are global accessibility and sales reach, the prospect of increased profits from new markets and electronic channels, improved customer service and loyalty, shorter time-to-market, and supply chain integration.

Global accessibility and sales reach refer to the ability of an e-business to receive orders from anywhere in the world. In fact, e-commerce does not only expand the market base of a company geographically, but also do so by opening the company’s critical information systems to new clients in the company’s local area who previously did not have time to access to the systems.

With e-commerce, firms reach more and different customers and gain exposure in new markets not covered by existing physical channels, meanwhile leverage their existing customer relationships to offer new products and services. E-commerce also enables companies to be open for business whenever a customer needs it. Interactive systems with a proper understanding of customer’s needs help maintain customer retention, increase customer loyalty and sustain a competitive edge.

Increasing sales is undoubtedly a way to increase profits, but e-commerce can also aid companies to increase profits by reducing costs and investments.

With some e-commerce systems, such as the Web, customers having questions about products can locate information themselves and solve their own problems, thereby reducing support headaches and costs.

Better yet, e-commerce enables fast and flexible execution and response to market opportunities. Through introducing new products on e-commerce systems, companies can get immediate customer feedback, refine and perfect the products and then launch them through traditional distribution and marketing channels. By so doing, huge investments in a physical distribution infrastructure or buying shelf space can be avoided.

By enabling full integration of a business, e-commerce systems can make the entire supply chain more efficient from the point of customer contact through physical distribution, warehousing, manufacturing, resource management, to raw material purchasing. The efficiencies reduce tremendous expenses, increase margins, facilitate flexible pricing strategies, and reduce costs by keeping inventories more in line with demand.

3. E-commerce strategy
E-commerce may have more advantages than the above listed, and than what we have observed and read. Nevertheless, it should be noted that instead of networking and other electronic communications technologies themselves, after all, it is the proper integration of communication technologies and business that provides different businesses or business processes with corresponding advantages. The proper integration requires a robust strategy, and such a strategy demands a good understanding of business requirements, technical limitations, and possible technological impact on the business.
3.1 Technical requirements for business information
The core of the transformation mentioned above is information. Business information can categorized into one of a small number of services: voice, data, image, and video. A measurement to all of these services is response time, which is the elapsed time between the end of transmission of an inquiry and the beginning of the receipt of a response. Businesses have different speed requirements for information on different occasions. For example, Web systems with a 3-second or better response time maintain a high level of user attention. With a response time of between 3 and 10 seconds, some user concentration is lost, and response times above 10 seconds discourage the user, who may simply abort the session.

Response time is only one parameter among a great number of parameters needing consideration. The number of parameters needing consideration depends on the selection and organization of technologies, which, in turn, depend on the intent and effects a business wants to realize.

3.2 Efficiency and effectiveness
Efficiency refers to a good relationship between investment and return, and effectiveness refers to whether the expected goal has been met by the actions taken. Reducing costs and enhancing productivity and profits are goals of e-commerce strategies.

Efficiency and effectiveness are linked. This means when one is under consideration, the other should also be analyzed and examined. High capacity databases may offer great flexibility and functionality, but if the cost for training staff to gain sufficient familiarity is too high, the involvement of such databases may hardly be justified.

The linkage between efficiency and effectiveness can also mean another thing. Ideally, a sound e-commerce strategy is supposed to be both efficient and effective. However, in the real life, dilemma often occurs and compromises have to be made.

We have mentioned the parameter response time. Ideally, the shorter the response time, the better. However, there is a tradeoff between speed and cost. Computer processing power and competing requirements are the two sources of the cost. Therefore, correctly estimating the cost and return is a challenge for the establishment of a sound e-commerce strategy.

3.3 Security concern
A sound e-commerce system should be a safe one, and a safe system can bring users’ trust in the system and the business, and provide users with appropriate privacy. Security means the protection of hardware, software, and data (here data include voice, data, image and video).

A critical security concern is how secure is enough. Security is often considered as a double-edged knife. Too much security can be counterproductive, not only in terms of time, money, and effort, but also in terms of compromising the security itself. It is not a good sign to find a sticker on the monitor, on which passwords are listed so that the user can handle the tedious login procedures and mandate of long, random, and frequently changed passwords.

A good security principle may be that everyone should get what he/she is supposed to get, and that everyone should not get what he/she is not supposed to get. To realize this principle, careful analysis of users’ requirements and technical solutions is necessary.

3.4 A vision of the future
A robust strategy should take future into consideration. The consideration should not only be given to the advancement of the business itself, but also on the preparation for the possible change in technical environment.

Unquestionably, future is hardly predictable. Therefore, an open architecture is required. Systems should possess scalability, and a variety of upgrade paths. Key software components should be able to run on the same or different systems. Connectivity, compatibility and modularity are the major areas of concern. Industrial standards should be carefully followed in selecting and purchasing technical components from vendors, and in designing and implementing the systems. To fulfill all these, a keen technical knowledge is critical.

A good e-commerce system will always take business expansion into consideration. With the growth of business and the application of the e-commerce systems, businesses will produce more requirements. Thus, an open architecture is also justified.

4. Trends and opportunities of e-commerce

4.1 Trends

From the aspect of development of communications technologies, there are basically four trends of e-commerce development: The implication of the development of communications technologies allows more specified prediction. It was estimated that the number of worldwide business establishments with Internet access will grow to 10 million by the year 2002. A substantial portion of these businesses will have two or more categories of electronic connections: selling to customers over the Internet or to other businesses over a private networks, or both. A typical business may extend out to encompass its supply chain, with products and services moving towards end customers and payments moving toward suppliers. Thus, an e-commerce strategy that address both sides of the supply chain may be justified, because the total return of the company can be more easily maximized when its linkages with business partners are efficient and swift. The combination of business process automation and Internet-enabled communications helps the business to compete on a higher level.
4.2 Opportunities
There is a range of e-commerce opportunities that depend on the nature of the business and the customers it serves. Here are some opportunities for online business: This list is by no means complete. The increasing application of networking and electronic communications technologies may create more and more e-business opportunities, and more and more opportunities are waiting for us to explore.
5. Technological arsenal for e-commerce via the Internet and Web
There is virtually a variety of overlapping software and hardware products that can be used to establish a network, and there are various combination methods of these products to materialize an e-commerce. Our focus of the project is on the application and data communications of the Internet and the Web, and hence we will narrow our topic here and mainly discuss the technologies related to the Internet and the Web. We lay our focus on these technologies, because we have perceived the importance of the roles these technologies are playing in today’s business world, and because we have seen a trend of the increasing use of these technologies in tomorrow’s world. The trend has been discussed in the e-commerce trend section.
5.1 Centralized processing, distributed processing, and client-server architecture
Concerning the organization of a network, three architectures can be chosen from: centralized processing, distributed processing and client-server architecture.

With a centralized data processing architecture, one or a cluster of large computers in a centralized data processing facility handle most of the data processing tasks. They are the center of the system. Data processing starts at the center with the results produced by the center. Terminals are linked to the center and basically don’t have much functionality. Such architecture is centralized in many senses: centralized computers, centralized processing, centralized data, centralized control and centralized support staff.

The advantages of a centralized architecture include the convenience for management, ease for establishing security policy, and economies of scale in purchasing and operating equipment and software. On some occasions, without a centralized system, it would be difficult to gather and use many different types of data that go into the customer analysis applications.

Nonetheless, centralized systems mentioned here have many limitations. First of all, such a centralized system requires a mainframe computer. To many businesses, the cost of such a computer or such a system cannot be justified. Secondly, with the drastic drop in the price of hardware and software, PCs and PC software applications are cheap and readily available. Using terminals with little functionality seems just a dummy idea and a waste of resources. On one hand, people hope to get more functions and freedom to manipulate applications for their own purposes at the terminal end. On the other hand, people having PCs hope to join their PCs in the system. They expect to give their small PCs a chance to play.

A distributed data processing facility is one in which computers, usually small computers, are dispersed throughout an organization. This architecture can achieve the maximum effectiveness based on operational, economic, and/or geographic considerations. A distributed data processing (DDP) strategy may depart in varying degrees from the centralized data processing. A DDP facility may include a central facility plus satellite facilities, or may act as a community of peer computing facilities (including workgroups). What is more, a DDP facility involves the distribution of computers, processing, and data.

A DDP architecture supports resource sharing, incremental growth, increased user involvement and control, enhanced end-user productivity, distance and location independence, vendor independence, availability, and responsiveness. It enjoys more flexibility. However, lacking central control, such a system is more difficult to test, manage, maintain and sub-optimized. Incompatible problems may occur among data and equipment. Also, since technical personnel in various units may individually develop similar applications or files, unnecessary cost on the duplication efforts may incur.

A client-server architecture is an attempt to provide the best aspects of both distributed and centralized computing. By sharing applications, data, device controllers, and control, a client-server architecture is more flexible than the traditional centralized architecture. Such an architecture can achieve economies of scale by centralizing support for specialized functions, support universal access to information by authorized users and maintain consistency and security of data. Physical architectures of the computers used can be arranged to support the specified service functions of the computers. These make up the weakness of a DDP architecture. Furthermore, functional services are not necessarily in a one-to-one relationship with physical computers, and this is especially good in providing database services. These benefits make the client-server architecture the mainstream in the application of networking technology.

In brief, applying a client-server architecture in the network for e-commerce is a better approach.

5.2 Distributed applications
Among the applications that can be distributed by DDP and client-server, three most important and widespread ones are electronic mail (email), electronic data interchange (EDI), and web-based applications. For all these applications, standards have been developed, and this is the reason that the use of the applications is growing so rapidly.

Email provides a means of exchanging unstructured messages, usually text messages. One of the most widely used protocols for the transmission of email is Simple Mail Transfer Protocol (SMTP), which assumes that the content of the message is a simple text block. It transfers mails between hosts in the TCP/IP suite. Another one, Multipurpose Internet Mail Extensions (MIME), expands SMTP to support transmission of multimedia information. Post Office Protocol 3 (POP3) is an Internet messaging protocol. It is based on the SMTP standard for Internet mail. The basic process of email starts with the response of a user agent program to user input. The response creates "mails," which are queued and transmitted by SMTP sender from port 25 via TCP connections to the port 25 at the proper destination. An SMTP receiver then accepts the arriving message and places it in the appropriate "mailbox."

EDI is the direct computer-to-computer exchange of data normally provided on standardized business documents. It is designed for doing transactions between companies. Different industries have different standards on EDI formats. A typical EDI system contains application, translation software, and network.

The World Wide Web is an Internet-based hypertext system. Hypertext Transfer Protocol (HTTP) is the protocol for the exchange of Web-based information between Web browsers and Web servers. Users access the Web by means of a Web browser program running on their system, and the browser connects to a Web server across the Internet. The server maintains a database of information in the form of linked pages. Each page contains information that is defined using the HyperText Makeup Language (HTML), and is identified by an address known as a Uniform Resource Locator (URL).

5.3 E-commerce on the web
The technologies mentioned above imply a possible establishment of a network, which is necessary for the realization of e-commerce. With distributed applications such as the Web and email and EDI, and with the client-server architecture, a business, no matter whether it is retailer or wholesaler, can start e-business with serving its customer through the web. It can obtain customer information from the Web, manipulate and organize the information at its information center the server, or distribute the information to the company’s other computers for manipulation, and then check its inventory to find the appropriate products for the customer. Supplies of raw material or products can be ordered through EDI with or simply by email to the suppliers. What is needed to complete the business transactions is a database to store the necessary information.

In the database market, there are various brands to choose. Database software programs generally fall into three models ? relational, hierarchical and networking. Relational databases, such as Oracle, DB2, FoxPro, and Access, are very popular and occupy a big share of the market. These relational databases differ in price, flexibility and capacity. The more expensive, the more capacity and the higher the technical requirements.

All these databases ? Oracle, DB2, FoxPro and Access ? can reside in a client or server and support web applications. A technique behind them, Microsoft Open Database Connectivity (ODBC) Application Program Interface (API), facilitates the connection between server and databases.

ODBC is a set of functions that provide access to client/server Relational Database Management Systems (RDBMS) and desktop database files through particular drivers. Simply speaking, ODBC is like a universal language translating the needs between relational databases and server. Without ODBC, different database languages have to be used to make the connection. Since these languages are proprietary, a connection like this would be highly technically demanding.

With ODBC, databases can be linked to a server, but to make the database fully functional, other techniques are indispensable. Several ways exist that can do the work.

The first one is using Common Gateway Interface (CGI) scripts manipulate the DBMS through ODBC to complete the data exchange between the Web client and database residing in the server. CGI is a server-side programming system for initiating software services. The programming can be written in many programming languages, such as C, PERL, Java, or Visual Basic.

Since CGI programs are executables, using CGI on the Internet means letting the world run the programs on your system. Thus, some security precautions are needed. In addition, each time when a CGI script is executed, a new process starts. This may affect the speed of the server.

Another way is using Internet Server Application Program Interface (ISAPI), which substitutes dynamic link libraries for CGI executables used by Web servers. ISAPI provides more efficient and faster execution of specialized functions, such as Internet Database Connector (IDC) database access, than CGI scripts and applications. However, working on ISAPI is more technically involved.

An increasingly popular solution is using Active Server Pages (ASP) and Internet Information Server (IIS). ASP is a "language-independent" technology, which makes it easy to access data from an ODBC-compliant database and put the data on a web page. The power and flexibility is a welcome sight to the Microsoft NT community. ASP codes are easily created and implemented using any programming language that supports ActiveX interface (or OLE, a family of Microsoft object technology serves as one of the foundations of Microsoft’s Internet products), including Jscript, VBScript and PERLScript. Since ASP is native to the Microsoft NT operation system, it is readily available to all clients with Web sites hosted on the server, and does not require much intervention from the administrator to access its resources.

Internet Information Server (IIS) is a Microsoft Web server bundled with Windows NT 4.0. This bundling is certainly accelerating the adoption of Windows NT and IIS as the most popular Internet server platform. Supported by ASP and other Microsoft Internet-related products, Windows NT system becomes more and more popular.

6. Business process revisit
At the beginning of the last section (5.3), through analyzing some technologies, we have noted that technologies, even as few as they are mentioned in this paper, can be combined to accomplish traditional business transactions. When thinking from the view of the combinations of these technologies, we found that even these combinations can do more than facilitating traditional trading processes. Technologies are transforming agents. They do not only bring technological changes with them, but also cause fundamental changes in the way business will be done, and more deeply, they are transforming the society in latent ways.

Take one popular business institution, the shopping mall, as an example. On most occasions, people who want to buy what they need have to, first, physically go to the mall, and then choose the shops, look for items interested, choose the products they want, make payment, take the products and leave. Shopping malls must have a physical location, where different products are displayed and stored. To start, management of a shopping mall has to seriously consider the rent, transportation, parking places, and many other factors in order to find a good location. The housing, like other physical stuff, has to be maintained. However carefully maintained, with time passing by, physical things are doomed to depreciate. A big portion of profits has thus lost. We have not even mentioned the labor cost and other costs yet.

Let’s make an e-commerce shopping mall with the technologies mentioned in this paper. We will need a server with a database, Oracle or Access, residing in it, linked to the Internet. Customers order products from others by checking our Web pages. Their orders are sent through the Web pages to the database in the server. Via EDI, customer information can be sent to a credit institution for credit check. After the server receives the credit feedback, the order data are then organized and sent to manufacturers through EDI or email. Manufacturers then organize production and deliver the products to the customers. Our shopping mall does not even need a warehouse to house inventories, because it does not even have any inventory. In this case, what the technologies enable is a virtual shopping mall.

What technologies enables us to do in business or other disciplines is a topic worth deeper thinking. The transforming effects and capability of technologies await us to explore.

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The Project

1. Group goals
Our group was formed on the mandatory premise of "you can hide, but you cannot run." Since every group member knew he/she was doomed to do a project, each one tried his/her best to cooperate with each other. At the very start, we were at a lost in choosing a topic. The project, mandatory as it is, offers us some flexibility in choosing topics, but the flexibility sometimes may become a trouble. Therefore, we decided to set up a guideline for the group project. We reached our agreement on what we were supposed to gain from doing the project. This agreement, then, became the objectives of our group.

The group goals are:

To combine the knowledge about data communications with what we got from other classes.
2. A virtual shopping mall:
We decided to design a web-based application ? a virtual shopping mall. The rationality for the shopping mall has been presented in the previous sections.

To make our project comparatively smaller, we decided to have only three stores in our mall ? a bakery selling cakes, a toy store selling dolls, and a greenhouse selling flowers. Customers are expected to order the products through their web pages. The mall receives the order information via the Internet and stores it in a database.

For such a shopping mall, credit checking can be done with data transfer from the mall (the database server) to credit institutions. This means the involvement of a third party. Since our mall is only a mock-up, we realized that this part could not be done for the project.

Another part we don’t have enough knowledge to deal with is with what method the mall is supposed to send order information to manufacturers (bakeries, greenhouses, and toy factories). We knew that this transfer could be done via emails or EDI, but we were not sure what methods in the real business environment are used to handle this. Meanwhile, we also wanted to limit the scope of the project so that the project can be accomplished in this term. Therefore, we skipped this part.

3. Analysis and design
Through analyzing communications technologies employed in e-commerce, we had had a general idea of what were going to do. Therefore, the analysis phase was simplified. The simplification allowed us to deal directly with the details of technologies.

The first step of the analysis phase was resources check. By doing so, we figured out what technologies and software programs we would need to accomplish the project. The resources needed are:

The selection of Windows NT 4.0 was because it was the only server resources available, but using it did have many additional benefits. ASP and ODBC were members of the Microsoft technology family, and since they are native to NT operation systems, data transfer can be accomplished seamlessly. Selecting Microsoft Access is not only because it was a comparatively cheap database software program, but also because it belongs to the Microsoft product family.

Although security was not the focus of this project, the technologies selected for this project have very good security capabilities. NT server has class C security capability, and Access also has strong security competence. Since these products came from the same family, there is no conflict in dealing with security issues.

The second step was analyzing IPO of the business processes. Customers should provide the mall with their names, addresses, email addresses, credit card numbers. They should be given product information so that they could choose their products. Some of the product information, such as product number, may be totally transparent to customers, and this information will be automatically sent to the mall when customers click certain controls.

The third step was drawing entity-relation diagrams (ERD) and forming a data dictionary. The outputs of this step would be used to design the database and web pages.

The fourth step was user interface analysis. Since we were going to use shopping mall as the major metaphor, everything in the "mall" should simulate the environments of shopping malls in the real life. Customers would expect to use a "shopping cart" and make payment when "checking out."

The design phase was composed of two activities. One was the database design and the other the Web page or user interface design. These activities were basically the continuation of the analysis phases. They were done following corresponding outputs of the analysis. The ERD became the base of the database, IPO became the foundations of input boxes and controls on the Web forms, and the "mall" metaphor determined the "floor plans" of the Web pages. Surely, as to the Web pages, aesthetics is also important. Also, a Web page is supposed to be attractive and have some fun.

4. Implementation and testing
The implementation and testing phases consisted of the following activities:
After the above activities were done, we used computers in public labs to access the Web pages we created, and pretended to order the products in the mall (cakes, dolls and flowers). Through repeated testing, analyzing and debugging, we eventually reached our goals. The cycle ? testing, analyzing, and debugging ? took us a great amount of time.

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Conclusion

ASP is a most recent technology that can be used to create Web pages capable of sending data to Web databases. It is "language independent," and some knowledge of Visual Basic for Applications, Jscript, VBScript and HTML is good enough to create simple ASP pages. Using ASP for Web publishing is a very efficient way. It provides e-business a quick startup. Grasping some knowledge of this technology is undoubtedly one of the biggest gains of ours through doing this project.

Another gain is from working with ODBC. Although the configuration is very simple, the concept of ODBC is very important. We feel very sure that in the future, this concept will provide us with further help.

Through doing this project, we also had a chance to review the techniques about Windows NT server. Doing this project offered us a chance to combine the knowledge gained in other classes with that gained in this class. We tried to follow principles of systems development life cycle and user interface design, and found obeying these principles could save us time and energy.

In addition, through reading relevant literature, we gained some knowledge of e-commerce and the application of communications technologies to e-commerce. E-commerce is gaining popularity, but its future will be brighter. It awaits us to explore.
 
 

Selected References

Richard Downey, Sean Boland, Philip Walsh (1998). Communications technology guide for business. Norwood, MA: Artech House, Inc.

Dan Haught, Jim Ferguson (1997). Microsoft Jet database engine programmer’s guide. Redmond, WA: Microsoft Press

(1997) New perspectives on Microsoft Windows NT Sever 4.0. Cambridge, MA: Course Technology

Fahri Karakaya, Erdener Kaynak (eds) (1995). How to utilize new information technology in the global marketplace: A basic guide. New York, International Business Press

William Stallings, Richard Van Slyke (1998). Business data communications. Upper Saddle River, NJ: Prentice-Hall, Inc.

Active Server Pages ? The ASP Toolbox. URL: http://www.tcp-ip.com/pages/54.asp

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