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E-commerce applications Luisa Calcagno Course of Software Engineering 2 May 29th 2002 Plan of the talk Introduction to e-commerce and e-commerce applications Issues in developing e-commerce applications Architecture of e-commerce applications Bookstore example Perspectives for e-commerce

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E commerce applications l.jpg

E-commerce applications

Luisa Calcagno

Course of Software Engineering 2

May 29th 2002


Plan of the talk l.jpg
Plan of the talk

  • Introduction to e-commerce and e-commerce applications

  • Issues in developing e-commerce applications

  • Architecture of e-commerce applications

  • Bookstore example

  • Perspectives for e-commerce

  • References


A definition for e commerce l.jpg
A definition for e-commerce

  • A universally accepted definition does not exist

  • Anything that uses electronic technology in order to do business can be intended as e-business

  • We can look at e-commerce as to a subset of e-business concerning commerce

  • Commerce is intended as the activity of exchanging goods and services with some kind of payment


The eu definition for e commerce l.jpg
The EU definition for e-commerce

  • “e-commerce is based on the electronic processing and transmission of data. It encompasses many diverse activities including electronic trading of goods and services, on-line delivery of digital content, electronic fund transfer, electronic share trading, public procurement.” (EU(97)/157)


Origins of e commerce applications l.jpg
Origins of e-commerce applications

  • E-commerce applications existed long before Internet

    • EDI (Electronic Data Interchange)

    • EFT (Electronic Funds Transfer)

  • Internet offered the general public the opportunity to conduct businesses online


Taxonomy of e commerce applications l.jpg
Taxonomy of e-commerce applications

  • Three main categories:

    • Business to consumer (B2C)

    • Business to business (B2B)

    • Consumer to consumer (C2C)

  • Other categories:

    • Business to government (B2G)

    • Mobile Commerce


B2c applications l.jpg
B2C applications

  • Offer directly to the customer an interface of activity

    • Typical examples:

      • Online book store (e.g. amazon.com)

      • Online car purchasing (e.g. automall.com)

      • Booking and purchase of airline tickets (e.g. ryanair.com)

  • Correspond to retail sale

  • Growth of B2C applications thanks to Internet

  • A new kind of B2C applications are the Cybermalls


B2c applications advantages and disadvantages l.jpg
B2C applications:advantages and disadvantages

  • Advantages:

    • Allow company to extend existing services to customers

    • Allow company to increase its customers

    • Offer a wider choice and allow cheaper prices

    • May give to the company a worldwide visibility

    • Online shops are accessible 24h a day

  • Disadvantages:

    • Low order conversion rates

    • High risk (see Cyberphobia)


B2b applications l.jpg
B2B applications

  • Realize transactions needed to perform financial or commercial activities by companies over the Internet

  • Some typical applications:

    • E-procurement

    • E-Marketplace

  • The turnover is much greater than that dealed with B2C applications


B2b applications advantages and disadvantages l.jpg
B2B applications:advantages and disadvantages

  • Advantages:

    • Help to automate communications between companies making them easier and quicker

    • Allow to cut prices drastically

    • Help in reducing mistakes

  • Disadvantages:

    • Often need legacy integration


C2c applications l.jpg
C2C applications

  • Concern the consumers who run negotations with other consumers sometimes utilizing as intermediary a company

    • Examples:

      • Ebay

      • Autotrader.com


C2c applications advantages and disadvantages l.jpg
C2C applications:advantages and disadvantages

  • Advantages

    • Allow consumers to interact directly among them

    • Give to the consumers a new way of purchasing and selling services and goods

  • Disadvantages

    • Little earning capacity


B2g applications l.jpg
B2G applications

  • Correspond to all kind of transactions between company and public administrator

  • Utilized mostly in the USA


Mobile commerce applications l.jpg
Mobile commerce applications

  • Concern doing businesses by means of mobile wireless devices

  • Can be both B2B and B2C

  • Have a growing importance in the future of e-commerce applications

  • Will introduce completely new forms of electronic commerce

    • E.g. E-tickets

  • The development of such applications faces some of the greatest challenges in the security area to secure the trust of consumers


Plan of the talk15 l.jpg
Plan of the talk

  • Introduction to e-commerce and e-commerce applications

  • Issues in developing e-commerce applications

  • Architecture of e-commerce applications

  • Bookstore example

  • Perspectives for e-commerce

  • References


Issues in developing e commerce applications 1 2 l.jpg
Issues in developing e-commerce applications (1/2)

  • Many of the following issues:

    • Security

    • Flexibility

    • Scalability

    • Fault tolerance

    • Integration

    • Interfaces (graphical and not)

    • Time-to-market

      are common to many applications, but they are all critical in the case of e-commerce because of its nature


Issues in developing e commerce applications 2 2 l.jpg
Issues in developing e-commerce applications (2/2)

  • A state-of-the-art application always fail if people do not utilize it

    • A constant attention must be payed to the users over the whole development process

  • A close integration with every business aspect is needed:

    • For an online buyer security and easy access to the informations are the primal needs

    • A manager will need a flexible application to adapt the business to the new trends in a faster way


Security issues l.jpg
Security Issues

  • Security is a crucial feature

    • Most transactions take place in a fully automated way

    • Restricted data are transmitted through a public network

  • Users must be sure that their money will not be lost or stolen


Flexibility issues l.jpg
Flexibility Issues

  • E-commerce systems are subject to frequent structural changes because of mutations of:

    • Products and services provided by the firm

    • Commercial partnerships


Scalability l.jpg
Scalability

  • Capability to support a certain number of users (thousands, even millions) without compromising performances

  • It is important because a slow application often means to lose customers (especially in B2C) since they have very small patience


Fault tolerance l.jpg
Fault tolerance

  • A less fault-tolerant application will be less available to the user

  • Every minute that a site is not available costs 1400$ to the company (survey on 400 major companies by Oracle)

  • It is easy to lose customers forever

  • It is necessary to redirect the users without they perceive it


Integration l.jpg
Integration

  • Always needed since no application offering every commercial functionality can be realized

  • Critical because the commercial funcionalities are often realized by many different legacy and third-party applications

    • Examples:

      • ERP systems

      • Legacy systems


User interfaces l.jpg
User Interfaces

  • Must be intuitive,easily comprehensible and of simple utilization

  • In the case of B2C must support profiling in order to anticipate the customer requests

  • They also need to be customizable


Multi channel interfaces l.jpg
Multi-channel interfaces

  • Application interfaces must support several kinds of connections:

    • Web browsers

    • Web TV

    • Cellular phones (via WAP)

    • PDA


Time to market l.jpg
Time-to-market

  • Has greater importance than elsewhere

  • Emphasis on COTS and reuse


Plan of the talk26 l.jpg
Plan of the talk

  • Introduction to e-commerce and e-commerce applications

  • Issues in developing e-commerce applications

  • Architecture of e-commerce applications

  • Bookstore example

  • Perspectives for e-commerce

  • References


Two tier architecture client server l.jpg
Two-tier Architecture (client server)

  • Data reside on a server

  • Business logic and user interfaces reside on clients

  • Drawbacks :

    • Clients sustain the main load and consequently result to be monolithic and heavyweight

    • Excessive overhead

    • Simple but unsuitable for e-commerce applications


Three tier architecture l.jpg
Three-tier architecture

  • Separates the business logic of the application from user interfaces and from data access

  • Middle tier can be furtherly divided

  • In this case we call it multi-tierarchitecture:

    • Easier to modify one component

    • Lower cost to deploy and maintain



Application server l.jpg
Application server

  • Software that runs on the middle tier of a three-tier environment

  • In multi-tier environments it is often a distributed and complex software

  • Commercial implementations exist:

    • Microsoft Commerce Server 2000

    • Sun iPlanet

    • IBM WebSphere Application Server


Application server based e commerce platform architecture l.jpg
Application Server-basede-commerce platform architecture

E-commerce platform

ERP

Presentation

Layer

Business

Logic Layer

Data & Legacy

Access Layer

Legacy

systems

Transactions

Security

Session

Resource

Pooling

Load

balancing

Database

Horizontal Services

Application Server

Client tier

Server tier

Data tier



Plan of the talk33 l.jpg
Plan of the talk

  • Introduction to e-commerce and e-commerce applications

  • Issues in developing e-commerce applications

  • Architecture of e-commerce applications

  • Bookstore example

  • Perspectives for e-commerce

  • References




Plan of the talk36 l.jpg
Plan of the talk

  • Introduction to e-commerce and e-commerce applications

  • Issues in developing e-commerce applications

  • Architecture of e-commerce applications

  • Bookstore example

  • Perspectives for e-commerce

  • References


Future perspectives 1 2 l.jpg
Future Perspectives (1/2)

  • “Electronic commerce is going to reduce a lot of overhead in the economy”

  • “It will allow a purchase order to go from being about a $75 cost to about $10”

  • “if you had to pick who's the big winner in all of this, you'd definitely have to pick consumers”

  • “It lets you go out to the Internet and look at products and services of every kind, that never would have been available through traditional distribution channels”

  • (Bill Gates at the White House Conference on the New Economy, April 2000)


Future perspectives 2 2 l.jpg
Future Perspectives (2/2)

  • In spite of Bill’s words, people still lack trust in e-commerce

  • However, in Europe there is a strong tendency towards the acceptance of Mobile Commerce

  • EITO (European Information Technology Observatory) 2002 highlights the growing importance of Mobile Commerce (see next page)





Plan of the talk42 l.jpg
Plan of the talk finance

  • Introduction to e-commerce and e-commerce applications

  • Issues in developing e-commerce applications

  • Architecture of e-commerce applications

  • Bookstore example

  • References


References 1 4 l.jpg
References (1/4) finance

  • Introduction to e-commerce and the development of e-commerce applications:

    • Professional Java E-Commerce, M.Kerzner et al., Wrox Press, 2001

  • EU definition for e-commerce:

    • “A European Initiative in Electronic Commerce – Communication to the European Parliament, the Council, the Economic and Social Committee and the Committee of the Regions” (COM(97)/157)


References 2 4 l.jpg
References (2/4) finance

  • Electronic Data Interchange:

    • Intodruction to EDI, vv.aa. ,DevEdge online

  • Cyberphobia and trends in e-commerce:

    • http://www.webmergers.com

  • Application Servers:

    • Introduction to iPlanet Application Server Architecture, Robert Schulteis, Sun Microsystems, 2002

    • http://www.sun.com/developers/evangcentral


References 3 4 l.jpg
References (3/4) finance

  • Platforms for e-commerce:

    • Building Applications in the Net Economy, Netscape Communications Corporation White paper, 1997

  • Architectures for e-commerce:

    • Architetture, tecnologie e modelli funzionali nell’e-commerce, Castrogiovanni, Magliano, Sciarappa, Notiziario tecnico Telecom Italia, December 2001

  • Statement of Bill Gates

    • The White House Conference on the New Economy April 5, 2000


References 4 4 l.jpg
References (4/4) finance

  • E-procurement and e-marketplaces:

    • E-procurement white paper, Digital Union 2001 (http://www.digitalunion.com)

  • European Information Technology Observatory (EITO):

    • http://www.eito.com

  • The Bookstore example:

    • UML for E-Commerce, Doug Rosenberg

    • http://www.iconixsw.com


The end l.jpg

The End finance


Electronic data interchange edi l.jpg

Electronic exchange of finance

Business documents

Business data

In a standard format (ANSI X12,EDIFACT)

Established between 1968 and 1975 in the transportation industries (U.S.)

Application-to-application communication without human intervention

Electronic Data Interchange (EDI)


Electronic funds transfer eft l.jpg
Electronic Funds Transfer (EFT) finance

  • The banking equivalent of EDI

  • Denotes the transfer of :

    • Electronic checks

    • Customer accounts

    • Payment informations

      in automated way


Order conversion rates l.jpg
Order conversion rates finance

  • Defined as:

    • # of orders / # of contacts

    • By month or year, four-month periods, etc.

  • Measure the capability of a certain B2C application to convert an user into a buyer

  • A survey carried out in August 2000 showed that order conversion rates in USA were of 1.9% (Boston Consulting Group and Shop.org)


E procurement applications 1 3 l.jpg
E-procurement applications (1/3) finance

  • Automate enterprise purchasing processes, i.e. perform all of the activities related to generating an order on the buyer’s side

  • Purchased goods can be :

    • Direct goods (critical items in the supply chain)

    • Indirect goods (MRO –Maintenance Repair and Operations - such as office items)


E procurement applications 2 3 l.jpg
E-procurement applications (2/3) finance

  • Automating procurement of indirect goods can dramatically reduce costs since:

    • Lessens maverick buying

    • Reduces supplier response time


E procurement applications 3 3 l.jpg
E-procurement applications(3/3) finance

4. Purchase order is electronically placed

3. Order approvation compliant to company standards and procedures

2. Purchase request is performed by employees via a Web interface

5. Order is fulfilled by the supplier

Indirect goods e-procurement

1. Product selection from available catalogues

6. Product delivery

8. Payment request

electronically forwarded

7. Product receipt


E marketplace l.jpg
E-marketplace finance

  • An environment that brings buyers and sellers together in a virtual space for e-commerce, enabling them to reach new customers and reduce transaction costs

  • E-marketplaces are becoming more fashionable


Cybermalls l.jpg
Cybermalls finance

  • Include more virtual shops

  • Appear as web portals with links to single e-shops grouped by different product categories (e.g. music or books)

  • Advantages for smaller businesses:

    • Reduced initial investment

    • Easily traceability through the mall’s brand


Presentation layer l.jpg
Presentation Layer finance

  • Its purpose is to provide a user interface to the end user of the application

  • Controls the look-and-feel of the application and responds to user events

  • Serves actually as the front-end of the application


Business logic layer l.jpg
Business Logic Layer finance

  • The heart of the application itself

  • Contains the business rules and /or processes

  • Its components link between presentation and data/legacy layers


Data legacy access layer l.jpg
Data & Legacy access Layer finance

  • Its purpose is to give to the business logic components access to backend data sources such as:

    • Databases

    • ERP systems

    • Other custom systems


Horizontal services l.jpg
Horizontal services finance

  • Services provided by the application server by means of an underlying technology (CORBA, EJB, COM,etc.)

  • Typical services:

    • Transactions

    • Security

    • Session Management

    • Resource pooling

    • Load balancing and fail over


Session management l.jpg
Session Management finance

  • Mantains the correlation among requests generated by the same user


Resource pooling l.jpg
Resource Pooling finance

  • Caching the instances of used resources (e.g. database connections) improves performances


Load balancing and fail over l.jpg
Load Balancing and financeFail Over

  • Make possible to distribute incoming requests

  • Handle clients reconnection in the case of system crash


Cyberphobia and the com crash l.jpg
Cyberphobia and the .com crash finance

“Cyberphobia” is the market’s irrational fear of the Internet due to the several bankruptcies occured in the past years

B2C represent 75% of bankruptcies

Internet shutdowns

2000 2001 2002

Jan-Apr 6 220 66

Source:Webmergers.com