Developments in information and communications technology (ICT) have created opportunities to build new business models and to better integrate organizations with customers and suppliers. Technology serves both as a driver of change, as well as an enabler supporting new business concepts. For example, there is a strong correlation between an increase in the penetration of domestic broadband access to the Internet and levels of online consumption by consumers. Similarly, the development of search software has enabled the growth of a number of profitable business models, driven by advertising revenues. However, changes in technology are rapid, with new hardware and software solutions emerging almost on a weekly basis. While some of them might well soon become commonly used, others may be rejected by businesses and users, or may be evidently premature.
A first and very obvious way of classifying IT technology in e-commerce is to distinguish between hardware and software. The second way is to look at technology maturity. Several business technologies and standards can already be perceived as well established, such as EDI, bar codes, material requirements planning (MRP), or the HTTP protocol. However, not all such technologies are able to fulfill current or emerging requirements. Over a decade ago the major existing technologies, such as electronic data interchange (EDI) and MRP, were already being criticized for their shortcomings, which included:
MRP Materials Requirements Planning -a software-based production planning and inventory control system.
HTTP HyperText Transfer Protocol—a standard governing the transfer of hypertext between servers and browsers.
Major shortcomings registered for the use of these technologies such as-
- lack of alignment between operational and functional buying requirements;
- lack of support for document flows;
- processing which included only structured data, such as price and quantity;
- concentration on internal automation, rather than extension of market possibilities;
- no support of group work; and
- insufficient support of business-to-business (B2B) communication
Since then, software providers and other organizations have been working to improve applications. As systems have developed, some of the weak points have been eliminated, others reduced. Some of the new kinds of web-based technologies include web services and service-oriented architecture (SOA). However, it is important to understand that technology is not static. Some of the apparently ‘final’ solutions can really only be considered to be at an early stage in their development and are likely to undergo further constant evolution. This presents problems for organizations seeking to invest in e- commerce technology. Some technology perceived as ‘leading’ can be turn out to be a dead end in terms of development, and so selecting the right tools and applications is critical for long-term profitable growth.
Major E-Commerce Technologies
Service-Oriented Architecture
According to the definition provided by Sun, service-oriented architecture (SOA) is:
It is an architectural style that emphasizes well-defined, loosely coupled, coarse-grained, business-centric, reusable shared services.’ Sun, 2004
SOA is a concept in software architecture. The term service-oriented computing (SOC) is also common. SOA uses open standards such as web services and XML. While the SOA concept is not new, web services provide an opportunity to bring the concept to greater maturity. The core idea of SOA is the development of a set of services which communicate with each other. Service is requested by a service consumer (requester) from a service provider. A SOA is built from components (modules) that can be used and reused as required, allowing fast response to changes in environment. Using SOA it is possible to design, model, assemble, integrate, deploy, and manage services that are application and platform neutral. SOA allows reusing existing application and modifying them in a flexible way. Services are associated with roles and a service can be an element of the process such as: customer search, inquiry handling, customer credit verification, and the product availability check. Services are accessed via the Internet using standard protocols. Major SOA fundamentals as follows:
- Loosely coupled interactions: The services are provided are independent of their technology and location.
- One-to-one communication: The communication is bidirectional i.e. synchronous information flow between the customer and provider.
- Consumer-based trigger: The service is provided as demanded by the client (service consumer).
- Synchronous: Replies are sent back to the consumer in a synchronous way.
The creation of the SOA may require the incorporation of other extended capabilities such as application-to-application (A2A) and B2B integration, workflow, and BPM, BAM, complex event processing, single customer view, and various other functionalities.
One idea which serves to extend the concept of SOA is that of cloud computing. Cloud computing assumes that not only will software be available as a service (SaaS: software as a service), but the whole infrastructure as well. So-called ‘hardware as a service’ (HaaS) is accessible via the Internet—and includes such elements as electronic storage space and data centers. Users pay the computing provider for access to and use of the software and infrastructure, instead of paying up front for their own internal IT system. Companies such as Microsoft, Google, Amazon, and SalesForce are actively promoting this concept.
Online Payment Technology
Payment is one of the most sensitive security-related technologies, especially in business-to-consumer (B2C) interactions where trust in security and privacy levels plays a key role in consumer confidence in online transactions. Online payment is of course not limited just to B2C transitions, as users (buyers and sellers) can be both individuals and organizations. Indeed, several parties are involved in Internet payment: the seller (sometimes also called the merchant), the buyer, often a third party (the issuer), who provided payment services, as well as banks. Issuers, can be banks or other financial institutions, and provide a technical means to complete the transaction, involving such processes as validation and authorization. However, not all the organizations which provide a means for online payments are banks; there are third party transaction providers such as PayPal. The transactions and e-payment framework designed by any organization must also reflect legal requirements.
Apart from the technology-related security issues, there are also social considerations which influence online payments, such as anonymity, privacy, and acceptance by sellers. From a technical point of view, there is a need to differentiate between online payments with small-value amounts (so-called micro-payments) and those larger than 10–15 USD/Euro), so-called macro-payments. As the values transferred are lower, different levels of security and privacy are used. Micro-payments can often be completed using mobile technologies. Payments via mobile phone by means of such intermediaries as PayPal, or via the existing credit card/debit card system, can be added to the monthly phone bill. For example, mobile phone top-up payments can be made using pre-authorized credit card details held in an encrypted form by firms themselves or by third-party payment services, such as PayPal or WorldPay. For example, payment for parking fees via mobile phone was introduced in many cities and towns. One system, used in over seventy locations in the UK, USA, Australia, and Canada is offered by Verrus. Among the cities which adopted the system are: San Francisco, Miami, Vancouver, Sydney, and Manchester. After setting up the account, online or by phone, the system allows users to pay their parking fee by sending a text message that includes the parking zone number and time of stay. Payment can be also used for taxi and tickets.
Smart cards can be also used for electronic payment. Such a solution was employed in London, where the Oyster contactless smart card can be used to pay for transportation. The maximum amount stored on the card is £90 and the card can be topped up online. Several standards exist that regulate online payments: examples include XMLPay, W3C Ecommerce/Micro payment, and E-wallet by CEN/ISSS.
