Techniques and Tools used in online Transactions

The infrastructure for EC is a networked computing environment in business, home, and government.

It is based on the digital economy i.e. Internet or web economy.

This economy brings a global meaning to conducting business by the use of communication networks and information technologies.

It uses digital communication networks, including Internet, Intranets, computers, software, and a variety of supporting information technologies

1. Computer Networking

2. Internet Applications

3. The Internet Community

4. Internet Commerce Transactions Scenarios

Is a world wide system of computer networks or a networks of networks in which users at any one computer can with permission get information from any other computer

Is a public, cooperative, facility accessible to hundreds of millions of people world wide

Uses telecommunication networks specifically a set of protocols called TCP/IP (Transmission Control Protocols/Internet Protocol)

• initially government defense specialists scientists and researchers; young adult, wealthy, highly educated people

• now people of all ages in all professions including business from all countries (but still mostly the wealthy and educated)

The Internet supports applications in the following categories :- Discovery - involves browsing and information retrieval.

Provides users the ability to view documents and download whatever they need. Examples of such are the search engines like google.

Communication – provides fast and inexpensive communication channels. It also involves information transfer and processing such as e-mail, chat groups, newsgroups etc.

Collaboration – as a result of improved communication, electronic collaboration between individuals and/or groups is on the rise. Examples of such include teleconferencing.

Electronic Commerce – purchase of products & services

1.1 Distributed applications 1.2 Client Server

Applications 1.3 Computer Networks 1.4 Protocols

Distributed processing divides processing work between two or more computers. Participating computers can be all mainframe, all micros or a combination.

Examples of Distributed Applications World Wide Web (www) – information browsing

application Electronic messaging – store and forward transfer of a

message Network news – an electronic bulletin board that supports

newsgroups e.g. usenet

Client Server Applications are centralised and shared resources such as database servers, mail servers, application servers.

A Client/Server architecture divides networked computing into two major categories clients and servers all of which are connected by local area networks and possibly by a wide area network.

A client is a PC or a workstation attached to a network and is used to access shared network resources

A server is a machine that is attached to this same network and provides clients with these services

Examples of servers are :Database server that a provides a large

storage capacity

Communication server that provides connection to another network to commercial databases

Maximise the use of computer resources Provides a way for different computing devices

to work together, each doing the job for which it is best suited.

The clients which are usually inexpensive PCs, share more expensive devices, the servers.

Provides as many access points to data as there are PCs on the network.

Not only does this increase the processing power available, but it also uses that power more efficiently.

The client portion of the application is typically optimized for user interaction, whereas the server portion provides the centralized, multi-user functionality.

A computer network is defined as a interconnection of computers and computer related hard ware such as printers .

It enables 2 or more computers to communicate with each other.

There are several types of computer networks. Those classified according to the geographical area.e.g

local area networks, Wide Area Networks Those classified according by their shapes (topology)e.g

star network.

•Connections over a short distance.•Collection of interconnected computers that can share data, applications, and resources, such as printers •Computers in a LAN are separated by distances of up to a few kilometers and are typically used in offices or across university campuses.

Connections over a large distanceHigh-speed telephone lines Microwave (wireless)Satellite

• Is basically a bigger version of a LAN.• It can cover a group of nearby corporate

offices or a city .• A city wide network (MAN) is between

WAN and LAN.

a network constructed using internet based communications & application technologies that serves only the internal purposes of an enterprise.

An example would be connecting offices of the same company in different locations. e.g. Makerere Univ.

It may be a single LAN segment that uses TCP/IP protocol , it is typically a network connected to the Internet.

A network operated on or on behalf of an enterprise to support communications between the enterprise and a community of external users.

Can be viewed as an external extensions of the enterprise intranet.

Allow remote users to connect securely over the internet to enterprise internet for use. Example of such are distant sales people, online publishing personnel.

Offers limited accessibility to the intranets of the participating companies.

Enterprise Intranet

Remote User

Internet

Enterprise Extranet

•Set of rules and procedures that govern the transfer of information on the internet.

•It is the software that also helps in authentication, security, and privacy

•Major protocols used in EC payments are:

–Secure Socket Layer (SSL)

–Secure Electronic Transaction Protocol (SET)

The WWW Each hypermedia document sometimes

called a page has a unique identifier called Uniform Resource Locator (URL).

URL identifies application layer protocol required to access a document, the server on which the target is held, and the particular on that server.

E-Commerce and the WWW -Web has proven an ideal application for :- Vendors to disseminate details of their goods & services Buyers to browse the market place; consider product features,

availability and price & select a vendor Buyers and vendors to execute sales agreements Vendors to provide post sale customer services Providers of online services such as home banking Web applications supported by HTTP Web applications commonly used languages are HTML and Extensible

Markup Language (XML).

E-Messaging Allows user to send/receive messages Messages can be text, graphics, images,

sound etc

Service Providers Internet Standards Internet Name Assignment Internet Security Mobile Wireless Internet Access

Service Providers – users access the internet via Internet Service Providers (ISPs). Examples of such are infocom, DICTS, africa online etc.Services provided can be generally classified as follows :- Access Services- these services give users connectivity to an

internet backbone (one major WANs that tie the internet together). For internet access, full time connections are required. Costs for full time internet access e.g for infocom are $50 per month. Other costs such as telephone charges.

Value Added Service – these include e-mail, website hosting and application support. Extensive user support such as web page design may be provided.

Organizations that provide an Internet connection.The company that owns and operates that particular network to which you are going to connect your computer.

Charge can be hourly or monthly and depends on the bandwidth (data rate) you need

American/International examples include America Online and Microsoft Network (MSN)

Ugandan examples include Infocom, Spacenet, UTL (which provides a connection).

Internet Standards - Internet heavily depends on a set of well specified and widely adopted technical and procedural standards. IAB - Internet Activities Board – responsible for coordinating

Internet design, engineering and management. IETF – Internet Engineering Task Force – responsible for developing

Internet standards and specification. Internet Standards evolve through steps

Proposed standards – a specification enters the standard track Draft standard – at least 2 implementations have been

developed for which adequate operational experience has been obtained.

Standard : specification characterised by a high degree of maturity

Internet Name Assignment

Assignment of names to networks or organisations (called Internet Domains) is a thorny problem. Each domain name needs to be registered along with a corresponding IP address, in the Domain Name Server (DNS).

ICANN – Internet Corporation for Assigned Names and Numbers was formed in 1998 to serve as the global consensus for coordinating Internet Naming.

maintenance of internet security is considered a community responsibility.Document addressing respective responsibilities of users, service providers and product vendors. Users – understand and respect security policies Users – employ available security mechanisms to protect their own data Computer and Network providers – maintain security of systems they

operate. Vendors and system developers – responsible for providing sound

systems with adequate security controls Users, service providers, hardware and software vendors-

responsible for cooperating to provide security Technical improvements – in internet security protocols should be

sought on a continued basis.

Mobile Wireless Internet Access

wireless e-commerce and other applications that involve access to internet resources from mobile devices such as digital phones, pagers etc.

Wireless Internet access is not challenging since it fits in the lower levels of the internet protocols though the wire less environment introduces some security risks not inherent in the wired world.

Business-to-Consumer (B2C): applications that provide an interface from businesses directly to the consumer.

Business-to-Business (B2B): facilitates transactions between businesses.

Consumer-to- Consumer (C2C): consumer sells directly to consumers.

Consumer-to- Business (C2B): individuals sell to products and services to organizations.

Intrabusiness transactions - business to its employers Nonbusiness EC. Peer to peer (P2P) – individuals exchanges products &

services as well. Mobile EC - wireless environment e.g cell phones to access

the internet

Items being bought and sold appeal to individual consumers.Examples- Auctioning Cars – Auto dealers (autobytel.com)autobytel.com) have a

websites where consumers are able to see the pictures of cars they are interested in. Cost of the cars and transportation costs are quoted online.

- Art auctions – art work is sold online at various sites such as onlineart.com

- Airlines – several airlines auction tickets on their websites. Examples American airlines (aa.com)

Individuals using the internet to conduct business or to collaborate with other individuals.

Most popular C2C commerce activity is Auctions.Examples- Classifieds – Individuals sell items by advertising in the

classified section of the newspaper, now are using the internet for this purpose. Some of the classified services are offered free (classifieds2000.com)

- Personal services e.g tutoring, astrology- Peer to Peer and bartering – individuals exchange products

and services as well.

business using the internet to conduct business or to collaborate with another business.

Major Benefits of B2B auctions- Generating revenue – increase in customer base, venue

where obsolete, returned products can easily be sold- Increase in page views – users spend more time on

auction sites , companies are willing to advertise on such sites

- Acquiring and retaining members – All bidding transactions result in additional registered members which increases the value of the company.

Categories of B2B auctions- Independent auctions – use of 3rd party auctioneer to

create the site and sell goods- Commodity auctions – many buyers and sellers come

together to a third party website to buy and sell commodities . E.g. band-x.com we have energy access, utilities and telecommunications being sold.

- Private Auctions – take place by invitation only such as the sale of old equipment to a company’s regular customers

- Auctions at the company website. Companies that are able build an auction capability on their own websites.

Productivity Advances – represents shareholder value expectations, attracts new investment capital, overcomes competitive onslaughts

Expanded and Better focused markets – e-commerce can expand market reach dramatically.

Cost reduction – costs of performing traditional business tasks can be slashed

Quality gains – reduction in transaction times and error rates, resulting from elimination of manual steps such as telephone operator, transaction entry

Improved Customer appeal – e-commerce empowers the customer by putting information and control of transactions in the customer’s hands.

Improved employee satisfaction – employee communication processes and hands-on access to benefits systems provide new opportunities to increase retention rates of most valued employees.

Direct financial loss resulting from fraud – external hacker or fraudelent insider might for example order goods but charge payment to someone else or non existent account.

Exposure of “crown jewels” – proprietary information such as marketing competitive pricing information that is crucial to business might be unwittingly exposed competitors or others.

Damage to relations with customers or business partners – relationships might be severely damaged due to disclosure of confidential information.

Unforeseen costs – Legal or public relations costs might be incurred in recovering a security compromise

Public relations damage – damage to corporate image or credibility might result from an outsider masquerading as corporate spokespersons.

Examples of documented reports of attacks on networks include :

Alteration of content on commercial or government websites.

Falsification of news bulletins Penetration of a major bank’s cash management

system Systematic sniffing of passwords on a scale of

millionsPublicity of such attacks may be so damaging to a company in terms of loss of customer confidence or competitive advantage.

Lack of universally acceptable standards for quality, security and reliability

Insufficient Telecommunications bandwidth Still evolving software development tools Difficulties in integrating the internet and EC

software with some existing applications and databases

The added cost of special web servers in addition to network servers

Expensive and / or inconvenient accessibility to the internet for some.

Many legal issues are yet unresolved including the issue of taxation. E-commerce is largely carried out on open, interconnected and unregulated networks.

Global trade – this can provide problems with different laws in different countries. National and international government regulations and standards are not developed for some circumstances.

Political issues – economic, national security, law, privacy, peoples’ rights.

Difficulty of measuring some web advertisements Many sellers and buyers are waiting for EC to stabilise

before they can take part. Perception that EC is expensive and unsecured. People do not yet trust paperless, faceless transactions.

There are fundamental, practical and legal differences between the two forms of commerce.

Paper based commerce has inherently security – signatures, letterheads, watermarks, time stamps. Alterations can be detected.

Biometric of signatures (uniqueness of pressure, shape, pen direction).

Digital is easy to copy and modify. Needs cryptography and digital signature techniques to make secure. More on these critical security techniques later

Overall both types need different techniques to make secure. Without the application of specialised external security mechanisms, computer based records can be modified freely and without detection.

Obviousness of modifications, interlineations and deletions

Questions

What is electronic commerce ? How does e-commerce over the internet differ from traditional

commerce. What are the benefits of using e-commerce ? What are the possible risks of using e-commerce ? What are the advantages of the electronic job market for job

seekers and employers Site 3 examples of EC in the service industry. Explain the following terms : Internet, Intranet, Extranet ,Client/Server architecture, What are ISPs, B2B, C2C, Internet Standards, What does internet community refer to? What are protocols ?

Highlight key features on the following websitesBusiness to Consumer websites

- www.autobytel.com - www.flysaa.com

Business to Business Website- www.band-x.com

Visit the site www.business2.com/b2/web/articles/0,17863,528103,00.html

Title : Domain Name Hog Doesn’t take Chances, and read about the Scandinavian company and highlight key issues that caused them to buy the 3,080 domain names