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Introduction to E-commerce – Benefits, Risks and Legislation - Essay Example

Internet is a global connection of computer networks communicating with each other to exchange data and share information in range of forms. The internet is a system to connect easily through PC and local phone numbers. Internet allows users to exchange email between each other via Hotmail or other internet account.

Different technologies that is required for an e-commerce system:

Networking (e.g. TCP/IP)

1. TCP/IP: It is the network protocol used for connecting on computer to another. Also used for routing information across the internet.

2. POP3 and SMTP servers: These are used for exchanging emails. If your SMTP server is down then everyone who is sending you email will receive an error, declaring that your mail server is down and cannot receive incoming email. This error could leave bad impression on customers. If your POP3 server is down, you will be unable to retrieve email from your mailbox. Only external monitoring will prevent such a problem.

3. Internet connections: It is important to make sure that your connection achieves good performance for each user. Different users access your network from multiple backbones, depending on the company they use to connect to the Internet and their location. A remote monitoring service can ping your networks from multiple locations around the world, accordingly testing major routes to your web server or network.

4. DNS servers: DNS servers are used to translate your site name, for eg-www.myspace.com, to the numbers called “IP addresses” that computers understand. If DNS servers are not working properly, then end-users will not be able to find your site and will get an error. Usually only an external or remote monitoring service will detect such a problem.

1. Hardware ( e.g Web Servers): A web server with appropriate software is solution to successful e-commerce. The total storage space and electronic power required for the Web server depends on two things mainly, which are: the software that must run on the server and the volume of e-commerce transactions that must be processed. Hardware devices and how they support e-commerce business:

– Mobile devices: It gives the ability to manage commerce using a mobile device, such as a mobile phone, a Personal Digital Assistant (PDA) and a smartphone. Mobile devices have become a part of ecommerce since new applications have been introduced. For eg- Now, anyone can shop and order online via mobile as well. It allows you to open browser from a mobile device.

– Computers: Computers has the largest impact on ecommerce because when users want to shop online then they need a computer to view products. Computers support ecommerce business by giving the ability for users to shop online, moreover users can check the product they like if it is not available in store. You can make online payments and transactions via online. Also, banks such as HSBC, Barclays provide internet banking where users can check their balance online instead of having to go outside.

– Printers: Printers allow users to print images they like from the internet. It is also used to provide receipt for customers after transaction.

– Ipads: Ipads has all the facilities that the users need. Such as, they can shop online from ipads too as it has internet browser in it. They can use social websites and connect with everyone globally as well as it supports Skype and face time to make a video call. Ipads are lightweight therefore easy to carry around anywhere.

– QR Readers: QR Readers are a barcode scanner to scan barcodes on products, check prices via phone or ipads. Also QR codes can read URLS which can open the linked website on a browser.

This is an example of a QR scanner.

Software: Each e-commerce web server has software to carry out a number of fundamental services

including security and identication verification, retrieval and sending web pages and web page construction.

Web site development tools include different types of features such as: an HTML/visual web page editor, software development kits that include sample code. Code development instructions for languages such as Java or Visual basic and web page upload are together with the web server software depends on which web server software you choose.

Benefits of e commerce system

1. Ecommerce allows people to carry out businesses without any problem of time or distance. If someone wants to shop, they can log on to the Internet at any point of time, and purchase or sell anything one desire at a single click of the mouse.

2. It is the cheapest means of doing business.

3. Customers can easily select products from different providers without moving around physically.

4. Potential to Increase Company Profits: Online businesses do have a greater chance of increasing sales and profits by opening up an ecommerce store to sell the items they offer. More sales, more profits, bigger budgets, etc.

5. Allows for Easier Delivery of Information: An Online store and Web brochure are great ways to deliver and display information about your company and the products you sell. Not only does it benefit your customers, but it’s also usually easier for suppliers to update their site rather than break down in store display and put up another for the next event.

The importance of programming requirements, browser and platform compatibility:

1. By using CSS (Cascading Style Sheets) for your website’s layout, it will provide better performance on different technologies used for accessing the Internet.

2. One-size-fits-all technique of design and development – building every potential feature, even though most of the features are useless and will not apply to most industries.

3. Very little support and maintenance provided.

4. Better usability

5. Reaching Global Market: E-commerce allows the suppliers to range global market part. In It allows the suppliers to increase their sales meanwhile decrease the investment costs.

6. Reduce Labor Costs: The labor costs can be reduced with e-commerce because the sellers can automate their online store fronts.

7. Reduce Advertising Costs: E-commerce can reduce advertising costs because it is easier to update the advertisement using software technology.

The importance of multiple registration domain names for company’s e.g. .com. co.uk)

Most sites are referenced by at least two domain names. These set up to reference the index page on a site and produce the same results for anyone who wishes to find the website. This means the website provides better presence on search engine by providing more results. If you have a trademarks or brand names, it is a good idea to register the .net .org and your own region additional website for your domain names. This will increase traffic, improve brand identification and stops other people from stealing customer and infringing on your business by registering your domain name with a .net .org extension.

World Wide Web consortium is the main standards for World wide-web. It works with the global community to establish international commerce and communications on the internet. By using the Web standards created by the W3C, hardware manufacturers and software developers can guarantee their equipment and programs work with the up-to-date Web technologies.

Internet society is a non-governmental international organization which is a guide and principles for the workings of the internet. The society’s individual and organizational members maintain its feasibility and global scaling of the internet. They include the companies, government agencies and foundations that have created the internet and its technologies as well advanced new business organizations contributing to maintain that dynamic.

Task 2

P2 – You need to discuss the impact of security and legislation on e-commerce businesses. Also, mention the impact of initially setting up the e-commerce site (i.e., hardware/software infrastructure, hiring staff to maintain site, etc.).

Impacts of e-commerce system:

E-commerce has made a huge impact on society. People can now shop online in the privacy of their own homes without ever having to leave. This can require mortar retailers to open an online division too. In some cases, it can also force smaller businesses to change to being completely online. It also changes the way people come across at making purchases and spending money. E-commerce has changed the image of retail, services, and other things that make our economy work. Certainly, it will continue to influence how companies sell and market their products, as well as how people choose to make purchases for many years to come. The following are the impact of e-commerce on the global economy.

1. Product promotion: E-commerce develops promotion of products and services through direct, information-rich, and interactive contact with customers.

2. Customer service Customer service can be improved by enabling customers to discover detailed information online. Also, intelligent agents can answer standard e-mail questions in seconds and human experts’ services can be expedited using help-desk software.

3. Advertisement With direct marketing and customization appears as one-to-one or direct advertisement, which is much more effective than mass advertisement. This creates a essential change in the way in which advertisement is accomplished not only for online trades but also for products and services that are ordered in traditional ways.

4. Ordering System Taking orders from customers can significantly be improved if it is done online. When taken electronically, orders can be quickly routed to the correct order-processing site. This saves time and eases expenses. So sales -people have more time to sell. Also, customers can work out the cost of their orders, saving time for all parties involved.

5. New product capabilities E-commerce allows for new products to be produced and existing products to be personalized in original ways. Such changes may redefine organizations’ missions and the manner in which they operate. E-Commerce also allows suppliers to gather personalized data on customers. Building customer profiles as well as collecting data on certain groups of customers, can be used as a source of information for improving products or designing new ones.

6. Customization E-commerce provides for customization of products and services, in contrast to buying in a store or ordering from a television, which is usually limited to standard products. Dell Computers Inc. is a success story of customization. Today, we can configure not only computers but also cars, jewellery, gifts, and hundreds of other products and services. If properly done, one can achieve mass customization. It provides a competitive advantage as well as increases the overall demand for certain products and services.

Security and legislation on e-commerce businesses

Data protection Act

Data protection Act is created to protect every individual with their data. This means personal data cannot be disturbed to other sources unless authorised. You must register under the Data Protection Act to collect information about your customers, employees or potential customers. This information includes names, addresses, telephone numbers and email address.

When a customer registers on an online website, they provide their name address and bank details. These details are kept securely and disclosed safely under “Data Protection Act”. It would be an offence if a company misuses their customers or employees information. Customers who register online must make sure that all information is held securely or deleted on request from the subjects of the information.

Consumer Protection Regulations

Consumer protection Regulations is a law and organizations intended to ensure the rights of consumers along with the fair trade competition. It is applied to many ecommerce websites. The purpose of this regulation is to ensure that customers are shopping online properly and their product is accurate and truthful. While shopping online, customers will not have an assistance to ask about a product therefore it is necessary to provide a clear explanation to customers and also a simple website which is easy to navigate.

The law states that customers must be provided with clear information about your products and services before purchase. Customers must be clear about postage and packing costs including VAT or any other tax displayed on the website. If the company wishes to make any changes with their customer orders or cancel it then they must inform the customers with no loss other than return postage and packing,

Ecommerce Directive

The purpose of the E-Commerce Directive is to certify the free movement of “information society services” across the European. It is responsible for the establishment of service suppliers, advertising communications, electronic contracts, the liability of intermediaries, codes of conduct, court actions and cooperation between Member States.

1. A company must clearly display their site’s terms and conditions and give clear information on price, tax and delivery to buyers.

2. Company must clearly identify the sender of all electronic communication

3. Company must clearly define any promotional offers and the qualifying conditions regarding these offers.

BAD IMPACTS! WRITE

P3 – You also need to consider risks associated with lack of human contact, delivery issues, international legislation, and product description problems.

Risk of e-commerce

1. Data threats: threats posted to files, databases etc. by viruses or Trojans.

2. Human errors by clicking on unknown links via email which could be malicious and harmful or accidently deleting data by an employee.

3. Credit card and payment fraud

4. Website destruction: virus attacks can lead to commercial humiliation and damage to the way business is viewed publicly.

5. When transaction information is sent without proper security and encryption then hackers can intercept the transmissions to obtain customer’s personal information and bank details.

6. Hardware and software can also cause disruption at any time. Processor speed and data storage might also pose as a problem for degradation of the system’s performance.

For each risk listed in part 1, grade its level of danger to the organisation on a scale of 1 – 5 (where 1 is high risk and 5 is low risk)

1. Data threats

2. Human Errors

3. Credit card and payment fraud

4. Website destruction

5. Poor security

6. Hardware/software failure