1. technology and computing
2. internet technology
3. ecommerce

E-commerce applications
Luisa Calcagno
Course of Software Engineering 2
May 29th 2002
Plan of the talk
• Introduction to e-commerce and ecommerce applications
• Issues in developing e-commerce
applications
• Architecture of e-commerce applications
• Bookstore example
• Perspectives for e-commerce
• References
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 ebusiness
• 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
• “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
• 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
• 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
• 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
• 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
• 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
• 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
• Concern the consumers who run
negotations with other consumers
sometimes utilizing as intermediary a
company
– Examples:
• Ebay
• Autotrader.com
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
• Correspond to all kind of transactions
between company and public
administrator
• Utilized mostly in the USA
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 ecommerce 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 talk
• Introduction to e-commerce and ecommerce 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)
• 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)
• 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
• 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
• E-commerce systems are subject to
frequent structural changes because of
mutations of:
– Products and services provided by the firm
– Commercial partnerships
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
• 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
• 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
• 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
• Application interfaces must support
several kinds of connections:
– Web browsers
– Web TV
– Cellular phones (via WAP)
– PDA
Time-to-market
• Has greater importance than elsewhere
• Emphasis on COTS and reuse
Plan of the talk
• Introduction to e-commerce and ecommerce applications
• Issues in developing e-commerce
applications
• Architecture of e-commerce applications
• Bookstore example
• Perspectives for e-commerce
• References
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
• 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-tier
architecture:
– Easier to modify one component
– Lower cost to deploy and maintain
Three-tier architecture
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
E-commerce platform
ERP
Presentation
Layer
Transactions
Business
Logic Layer
Security
Session
Data & Legacy
Access Layer
Legacy
systems
Resource
Load
Pooling balancing
Horizontal Services
Database
Application Server
Client tier
Server tier
Data tier
Example: iPlanet architecture
Plan of the talk
• Introduction to e-commerce and ecommerce applications
• Issues in developing e-commerce
applications
• Architecture of e-commerce applications
• Bookstore example
• Perspectives for e-commerce
• References
Domain Model
Use Case Model
Plan of the talk
• Introduction to e-commerce and ecommerce applications
• Issues in developing e-commerce
applications
• Architecture of e-commerce applications
• Bookstore example
• Perspectives for e-commerce
• References
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)
• 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)
Trends in Mobile Commerce for the
EU Markets: entertainment
Trends in Mobile Commerce for the
EU Markets: banking and finance
Worldwide TLC markets by region
Plan of the talk
• Introduction to e-commerce and ecommerce applications
• Issues in developing e-commerce
applications
• Architecture of e-commerce applications
• Bookstore example
• References
References (1/4)
• 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)
• 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)
• 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’ecommerce, 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)
• 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
Electronic Data Interchange (EDI)
• Electronic exchange of
– 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 Funds Transfer (EFT)
• The banking equivalent of EDI
• Denotes the transfer of :
– Electronic checks
– Customer accounts
– Payment informations
in automated way
Order conversion rates
• 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)
• 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)
• Automating procurement of indirect
goods can dramatically reduce costs
since:
– Lessens maverick buying
– Reduces supplier response time
E-procurement applications(3/3)
3. Order approvation
compliant to company
standards and procedures
2. Purchase request is
performed by employees
via a Web interface
Indirect goods e-procurement
4. Purchase order is
electronically placed
5. Order is fulfilled by
the supplier
1. Product selection
from available
catalogues
6. Product delivery
8. Payment request
electronically forwarded
7. Product receipt
E-marketplace
• An environment that brings buyers and
sellers together in a virtual space for ecommerce, enabling them to reach new
customers and reduce transaction costs
• E-marketplaces are becoming more
fashionable
Cybermalls
• 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
• 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
• 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
• 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
• 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
• Mantains the correlation among
requests generated by the same user
Resource Pooling
• Caching the instances of used
resources (e.g. database connections)
improves performances
Load Balancing and
Fail Over
• Make possible to distribute incoming
requests
• Handle clients reconnection in the case
of system crash
Cyberphobia and the .com crash
•“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
Jan-Apr
6
2001
2002
220
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Source:Webmergers.com