Electronic Commerce and Architecture - Essay Example

Outline Outline 2 Introduction 3 The Early Years 4 The Emergence of E-Commerce 5 Pioneers of E-Commerce 5 E-Commerce Today 6 E-Commerce in Future 7 Summary of the E-Commerce Timeline 7 The Interview 8 Conclusion 11 References 12 Electronic commerce and architecture Introduction According to Sellitontheweb (2011) electronic commerce or commonly known as e-commerce refers to the process of buying and selling of commodities online. On the other hand e-commerce could be described as electronic data exchange (EDI) involving the querying of inventories and transmission of purchase of orders involving two or more companies (Appan and Browne, 2010). The term could also be defined as the making of business transactions through electronic channels in relation to internet based relationships actively involving vendors and consumers. Shopping over the internet has suddenly become one of the most popular online activities thus a popular past time. This trend can be attributed to the fact that online shopping is efficient in terms of saving time and an opportunity to virtually draw meaningful comparisons on the various online shops available (Yue, DeSilva, Kim, Aktepe, Nagle, Boerger, Jain & Verma, 2009). Perhaps consumers are attracted by the fact that one can shop anywhere, anytime at leisure and pleasure even in the comfort of pajamas. Consumers have an easy time to search through various databases for goods and services. It is very easy to compare prices at the click of the mouse thus making purchases at best prices possible. Online vendors on the other hand have an easy time to interact with their clients thus a reduced need for intense advertisement. The history of e-commerce from which an interesting timeline can be generated, dates back to the emergence of the notion of selling and buying, computers, modems, cables, electricity and the internet (Slaughter, Levine, Ramesh, Pries-Heje, & Baskerville, 2006). It follows that e-commerce was introduced into the society with the timely emergence of the internet. Surprisingly, e-commerce and its related technology have been there for close to forty years. Today, it is very apparent how thousands of business establishments have continued to embrace websites. This paper seeks to highlight on the history of e-commerce and architecture from the time of its conception followed by its rapid development. Furthermore, the present and the future situation of e-commerce will also be discussed. The Early Years Yue et al (2009) assert that the original definition of e-commerce was the process of making business transactions electronically from Electronic Fund Transfer (EFT) Electronic Data Interchange (EDI) in relation to the existing technologies. These technologies were first reported in the late 1970’s. They enhanced information exchange and execution of business transactions mainly in the form of electronic invoices and purchase orders. Business pundits recognize these technologies (EFT and EDI) as enabling technologies that paved way for e-commerce. They worked to lay a solid foundation on which the e-commerce infrastructure was to be developed. This enhanced electronic exchange of commercial documentation. Historically, the famous Boston Computer Exchange begun in the year 1982. It was a rich market for used computer equipment thus one of the first e-commerce examples. The 1980’s saw the emergence of ATM machines, credit cards and telephone banking. This was a significant milestone in relation to the rapid evolution of e-commerce. The early 1990’s saw the introduction of the Enterprise Resource Planning (ERP), data mining and data warehousing into the rapid growing business industry. Security issues posed serious challenges to electronic business transactions in 1994. It is for this reason that relevant security protocols and high speed internet connections (DSL) were introduced. The HTTP is an example of a security protocol that was developed at the time. These initiatives enhanced transaction capabilities and connection speeds. It was at this time that business experts foresaw rapid growth in the e-commerce sector. It is also important to note that even small business establishments stand a good chance to reach out for customers in the global market. The Emergence of E-Commerce According to Appan and Browne (2010) many businesses in the United States and Western Europe developed their first websites in the period between 1998 and 2000. This move corresponded to opinions of industry experts. Soon e-commerce was re-defined. The traditional and conservative brick and mortar businesses were forced to reach out to their global clients electronically. In 2000, online business transactions became very popular. This period saw the collapse of the common ‘dot com’ era. Business establishment discovered how they could efficiently use the internet to build their business empires. A typical example of the dot com failure is the Webvan (Wei, Van Der Ende & Lin, 2009). Many other e-commerce companies also disappeared. Its failure led to the emergence of successful online grocery delivery businesses like Safeway and Albertsons (Sellitontheweb, 2011). The two had the largest chains of supermarkets in the country. The two companies employed a model commonly referred to as a business to business model. Sellitontheweb (2011) reveals that a total of 700 billion US dollars was realized from the online transactions. E-commerce sale continued to soar in the successive years. A total of 3.4 percent of total sales comprised of e-commerce sale by the end of 2007. Pioneers of E-Commerce Amazon and eBay were the pioneers of e-commerce. The two companies were launched in 1994, a time when e-commerce was rapidly growing in most parts of the world. They quickly established very prominent brands of e-commerce. Among the items that are in the online market include books, music, electronics, computers and office supplies. Of the two, Amazon.com was the original pioneer. This can be attributed to its comparatively wider recognition by consumers in many parts of the world. The initial investment of Amazon.com was very costly in relation to delivery and fulfillment capability and warehousing. The cost effectiveness of this initiative was however realized after ten years when huge annual profits were realized. Amazon.com now boasts of selling software, electronics, DVD’s, CD’s, clothing, shoes, beauty products, software, household goods and videos games as compared to how it started as an online bookstore (Burstein, Cowie, Zaslavsky, & Pedro, 2008). Apart from Amazon, the other most famous e-commerce companies are Hewlett Packard, Dell, Office Depot and Staples. The evolution of e-commerce is based on a new, virtual world which is ever changing to suit the needs of the consumer. E-Commerce Today Today, e-commerce stands out as a remarkable experience. The traditional manner of shopping has been completely transformed. This is evident by the huge following of e-commerce lovers. People are now able to shop anytime, anywhere. The technology behind e-commerce is also growing rapidly. The consumer can now enjoy three dimensional displays of desired products. Wei, Van Der Ende and Lin (2009) reveal that at the click of the mouse, a consumer is able to make an order, choose an appropriate method of shipping, select a fleet and wait for the commodity to be delivered at his or her door step. The future of e-commerce promises to replace the conventional brick and mortar stores with e-commerce (Burstein, 2008). The community finds e-commerce very adventurous and luxurious. E-Commerce in Future Business pundits have revealed that e-commerce has a very bright future especially in the 21st century. It will therefore continue to be a vital tool of sale (Wei et al, 2009). As online shopping is increasingly becoming natural and popular, it is predicted that the web will become inseparable with successful e-commerce. Increased competition from rival companies will emerge. This will be to the advantage of the consumers as the various companies will be struggling to meet the needs and wants of the consumer in the best way possible (Connolly, 2007). It is for this reason that service providers will improve service delivery and the variety of products alike. Summary of the E-Commerce Timeline Yue et al (2009) reveals that the following summary of e-commerce history gives further details of occurrences that might have been left out in the above discussion. 1979: Online shopping invented by Michael Aldrich 1981: Thomson Holidays established as the first UK based business to business online shopping enterprise 1982: France Telecom introduces Minitel in France for online ordering 1984: Mrs. Snowball was the first online shopper from her home through Gateshead SIS/Tesco 1985: Cars were sold by Nissan UK online 1987: Swreg sells its shareware and software via an electronic merchant account 1990: Worldwide Web (WWW) was written as the first web browser by Tim Berners-Lee 1992: Using RoboBOARD/FX the first Bulletin Board system (completely graphical and could be navigated using icons) was launched by Terry Brownell. The advent of the system enhanced online shopping significantly 1994: Mozilla as an alternative web browser was released by Netscape. Mozilla’s web page was used to order for pizza by Pizza Hut. Other developments included magazine subscriptions, flower delivery, first online banking and adult literature. The same company also introduced SSL encryption for security reasons 1995: Amazon.com was launched by Jeff Bezos, the founder. Other developments in the year included online radio, active online commercial transactions by Cisco and Dell. EBay was also launched as AuctionWeb by Pierre Omidyar 1998: Printable electronic postage stamps were introduced 1999: The year witnessed the launching of Napster, ATG Stores and the acquisition of Business.com by eCompanies for 7.5 million US dollars. 2000: Collapse of the dot.com era 2001: Massive profits recorded by Alibaba.com 2002: Acquisition of Paypal by eBay. NetShops and Wayfair retail stores were also established in the same year 2003: After close to a decade since its establishment, Amazon.com recorded a significant annual profit margin 2004: China formed its first online business to business online store, DHgate.com 2007: R.H Donnelley purchased Business.com 2009: The year saw two major acquisitions. Amazon.com was acquired by Zappos.com and RueLaLa by GSI Commerce. 2010: A bid by Google was rejected by Groupon (Sellitontheweb, 2011) 2011: As compared to 2010 the volume of online retail sales is predicted to grow by 12percent. Amazon acquired Diapers.com while eBay acquired GSI Commerce (Sellitontheweb, 2011). The Interview The following is an interview between the author and an Electronic Resource Planning (ERP) system developer in relation to the knowledge level and skills sets needed to operate and manage 21st century e-commerce systems. What are the options of integrated information systems from which an organization can choose from? Developer: The two main types of integrated systems are Best of Breed (BoB) system and the common Enterprise Resource Planning (ERP) system. What is an ERP? Developer: It is a comprehensive consolidated software package which combines all the functional components of a business in to a common database (Dempsey and Griffin, 2007, December). The various components might include production, sales, finance, marketing, human resource among others. What determines the choice of a system? Developer: The choice of a particular system depends on a number of factors including the required functionality of the organization in question; the desired type of relationship with vendors; the related costs and finally the origin of decision making within the organization. In other words, the organization should be well aware of its unique needs that are to be addressed by any particular integrated system. The organization should also take time to draw a clear comparison between the available software systems prior to implementation. The comparison should be in terms of merits and demerits. What type of knowledge is required by an organization or business establishment in order to manage the 21st Century e-commerce systems? Developer: It important to appreciate the role which technological advancement and globalization has played in the business environment. Organizations have to be sensitive to these two factors since they determine how effective a business will be in relation to reaching out to its customers online (Dempsey and Griffin, 2007, December). It follows that it is mandatory for an organization to adapt to the dynamics of this industry. In addition to knowledge, what are the skills required to manage e-commerce systems in the 21st century? Developer: The industry has become very competitive; it is therefore important for one to be well equipped in a number of skill areas. One has to have innovation and learning skills; critical thinking and problem solving skills; information, media and technology skills; career and life skills; creativity and innovation skills; leadership and responsibility skills, general communication skills and finally ICT and literacy skills. According to Dempsey and Griffin (2007, December) all the above mentioned skills are necessary for effective management of e-commerce systems. In conclusion, an ERP stands out as the preferred choice of integrated software system (Appan and Browne, 2010). This can be attributed to the fact that it interlinks information from the different departments within the organization thus enhancing faster decision making. Furthermore, integration ensures efficiency, accuracy and cost effectiveness within the organization. Conclusion It is important to note that social, economic and technological trends are rapidly transforming the business environment. E-Commerce is a very dynamic industry. It is therefore up to the various organizations or business establishments to keep up with its dynamic nature in order to remain relevant in the global market. It therefore requires one to have the necessary skills, knowledge sets and mentality in order to meet the needs of clients around the world. . References Appan, R., Browne, G. J. (2010). Investigating retrieval-induced forgetting during information requirements determination.Journal of the Association for Information Systems,11 (5), 250-275. http://proxy1.ncu.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=buh&AN=51974640&site=ehost-live. Burstein, F., Cowie, J., Zaslavsky, A., & Pedro, J. (2008). Support for real-time decision making in mobile financial applications. Information Systems and eBusiness Management,6 (3), 257-278. http://search.proquest.com.proxy1.ncu.edu/docview/232430850?accountid=28180. Connolly, R. (2007).E-commerce trust beliefs: The influence of national culture.http://www.iseing.org/emcis/EMCIS2007/emcis07cd/EMCIS07-PDFs/623.pdf. Dempsey, S., & Griffin, J. (2007, December). Integrated information systems: Choosing the best system for your organization. Accountancy Ireland, 39 (6), 64-66. http://search.proquest.com.proxy1.ncu.edu/docview/223178393?accountid=28180. Sellitontheweb. (2011). History of E-Commerce. Retrieved 20th Oct, 2011 from http://sellitontheweb.com/blog/history-of-e-commerce/. Slaughter, S. A., Levine, L., Ramesh, B., Pries-Heje, J., Baskerville, R. (2006). Aligning software processes with strategy. MIS Quarterly,30 (4), 891-918. http://proxy1.ncu.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=buh&AN=23113073&site=ehost-live. Wei, J., Van Der Ende, L., & Lin, B. (2009).Customer-focused e-business model for the oil industry.The Journal of Computer Information Systems,49 (3), 11-21. http://search.proquest.com.proxy1.ncu.edu/docview/232583953?accountid=28180. Yue, K., DeSilva, D., Kim, D., Aktepe, M., Nagle, S., Boerger, C., Jain, A., &Verma, S. (2009). Building real world domain-specific social network websites as a capstone project.Journal of Information Systems Education,20 (1), 67-76. http://search.proquest.com.proxy1.ncu.edu/docview/200157462?accountid=28180. Read More