Hnd Computing And System Development

Published Date: 02 Nov 2017

Applying the skills of designing and evaluating E-Commerce application to a selected Bank.

Business Skills for E-Commerce

Name: Ahmed Arshad

Student ID: ICBT/C/53/14

Date of Submit: 05TH February 2013

HND computing and system development/

HND in software development

Table of Contents

International College of Business and Technology (ICBT)

Statement of originality of submitted work

I, Ahmed Arshad

Student ID Number: HND/C/53/14

Module name: System Analysis

Here by confirm that the work presented here in this report, and in all other associated material, is wholly my own work, and I agree to assessment for plagiarism

Signature……………………………………………

Date: 08 November 2012

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ACKNOWLEDGMENT

I would like to take this opportunity to thank the people who helped me to earn very good experience and valuable knowledge in my relative field.

I specially and sincerely thank to lecturer Ms. Ruwanthi Perera to his enormous contribution in showing the right direction and giving me the guidance through the advices which made this assignment success.

Also my sincere gratitude goes to all my friends who helped me by providing books and web address and all other details which helped me to submit this successful assignment.

Finally I owe my special appreciation to "my parents" for giving me both spiritual and moral support. And also I would like to dedicate my effort of completion of this assignment to family and especially my loving son & my lovely wife who are my inspiration to carry on with my studies even though I am living apart from them for the time being.

Ahmed Arshad

Student ID: HND/C/53/14

Executive Summary

This project is on behalf of the Business Skills for E-Commerce, which focuses on our theoretical knowledge of the application regarding this particular module. Therefore this project is reflecting our understanding on this module.

This assignment mainly deals with

PEST Analysis of the Bank that I have selected.

Evaluate the selected bank aims and objectives and how they relate to stakeholders.

Investigate the potential opportunities of implementing an e-commerce system to the organisation

Evaluate the e-commerce system which are in use by competitors of the selected Bank and explain the benefits acquired by the customers and the competitors.

Setting up an e-commerce application can be costly yet effective in long term. Discuss the financial implication of setting up and running an e-commerce application by any organisation.

Explain the design consideration to be made when designing an e-commerce application by the selected bank. Your designing considerations should be focused on the target markets, business process, payment option, security, reliability and the relevant legislations.

Analyse the impacts (risks, benefits) of introducing an e-commerce application the selected bank. Discuss the global impact of e-commerce on society.

I have done this assignment to the best of my knowledge which applying information systems to the particular functional areas.

TASK 1

Organisations use different methods to analyse its external environment. PEST is a framework of analysing the macro environmental factors of organisation. Conduct a PEST analysis to the selected Bank and identify the macro environmental factors which are useful to consider by the organisation. Asses how those factors can be used to run core business functions of the organisation effectively.

1.1 External Analysis

External analysis is undertaken to enable an understanding of how the external environment has or will change so that the opportunities and threats which may arise by these external changes can be assessed and appropriate action taken.

1.2 PEST Analysis

PEST is a mnemonic which stands for Political and Legal, Economic, Social and Technological factors. These are simply four key areas to be considered in deciding how current and future changes may affect the business. Strategies can then be developed which address any potential opportunities and threats identified.

Political factors include government spending, policies of different political parties, new laws likely to be passed, regulation (such as trains, telecoms, electricity production). Legal factors include areas such as health and safety, tax changes, tariffs and trade barriers, foreign laws when operating in different countries and employment law. Economic factors include areas such as interest rates, exchange rates, and position in economic cycle, inflation rates, strength of the stock market, and the strength of the global economy. Social factors include areas such as demographic changes, cultural attitudes and social trends.

Technological factors include areas such as new products being developed, new purchasing mechanisms (intranet, extranet), new production technology, new distribution mechanisms (internet) and new methods of working (e.g. mobile telecommunications).

1.3 PEST Analysis (Macro Environmental Auditing) for MIB

Macro environment also known as external environment is where the factors which cannot be controlled by the business are operating. Every business has to adapt to macro environment changes to successfully survive in the market. External environmental factors are subjected to rapid changes. The changes can provide opportunities as well as can create threats to the company. Therefore the business should cope with these factors because these factors are uncontrollable. Every business is surrounded by the external environment. This can be divided into 4;

Political and Legal environment.

Economic environment.

Social and Cultural environment.

Technological environment.

1.3.1 Political factors

The alteration of political and legal factors directly affect for the all types of businesses. These factors include government regulations and legal issues and define both formal and informal rules under which the firm must operate. Some examples include:

Tax policy

Employment laws

Environmental regulations

Trade restrictions and tariffs

Political stability and pressure groups.

All these factors will influence and limit different organization and individuals. So, all most all the marketing activities are subject to a wide range of lows and regulation. Those legislation would cover:

Protect companies from each other.

Protect consumer from unfair trade practices.

Protect the society.

Protect the employees.

1.3.2 Economic Factors

Economic factors affect the purchasing power of potential customers and the firm's cost of capital. Markets involve buying strength as well as people’s demand. The following are examples of factors in the macro economy in MIB.

Economic growth

Interest rates

Exchange rates

Inflation rate

Living standards of the people.

These economic factors are things that cannot force to change by will or by management. Our business product depends on import goods and for a time being due to economic crisis that we can’t do anything to exchange rate and interested rate. Due to this issue, the supply of goods gets lower because the rate of dollars gets high. Or we can’t stop natural deserters.

1.3.3 Social Factors

Social factors include the demographic and cultural aspects of the external macro environment. These factors affect customer needs and the size of potential markets. The following are examples

Health consciousness

Population growth rate

Age distribution

Career attitudes

Emphasis on safety

Social factors include the cultural aspects and include health consciousness, population growth rate, age distribution, career attitudes and emphasis on safety. Trends in social factors affect the demand for a MIB services and how that bank operates.

1.3.4 Technological Factors

Technological factors can lower barriers to entry, reduce minimum efficient production levels, and influence outsourcing decisions. Some technological factors

R&D activity

Automation

Technology incentives

Rate of technological change

Technological factors forces to create new technologies and market opportunities. However, every new technology replaces an older technology. Marketers should observe the technological environment closely. Technology can change the total production that an economy can produce.

Having latest the technologies such as latest machines, latest production techniques…etc. will assistance MIB to increase their production efficiently and effectively than the competitors. And also it will help them to increase their profit as well as customer attraction.

Task 2

Every organisation needs to have aims and objectives to measure its own success. The objectives defined should meet the needs of the stakeholders of the organisation. Stakeholders are internal or external parties that have an interest about the organisation. Evaluate the selected bank aims and objectives and how they relate to stakeholders.

2.1 The business Aim

To serve as a trusted provider of Islamic financial products and services.

2.2 The business Goal

To be recognized as the leader and preferred partner in Shariah banking and an active player in the promotion and development of Islamic banking in Maldives.

2.3 The business objectives

Organizational objectives are long-range objectives. They serve as the goals for management in achieving the organizational mission.  Organizational objectives play a key role in the organizations. Mainly there are three types of objectives.

Corporate objectives,

Business level objectives ( refer Appendix)

Functional objectives. ( refer Appendix)

2.3.1 Corporate objectives

Corporate objectives of MIB are to implement the aim and goal of the organization by providing a clear focus in decision making to achieve what we want in the future. Our aim is to run the business satisfying our customers by beating the competition. Corporate objectives of bank are:

To give a good customer care and obtain 20% market share by 2015.

This goal would achieve by giving our full support and loyalty.

All the stakeholders will give their full potential in achieving the objective.

Objectives should be relevant to the people responsible for achieving them.

To achieve a customer satisfaction and broaden our business by the end of 2015.

2.4 Stakeholders Analysis

Stakeholder is a person, group or an organization that is effected or can be effected by an organization’s action. Person, group, or organization that has direct or indirect stake in an organization. Because it can affect or be affected by the organization’s action, objectives, and policies. Key stakeholders in a business organization include customers, directors, employees, government (and its agencies), owners (shareholders), etc. Although stake-holding is usually self-legitimizing all stakeholders are not equal and different stakeholders are entitled to different considerations. For example, firm’s customers are entitled to fair trading practices but they are not entitled to the same consideration as the firm's employees. See also corporate governance. Stakeholders are very important in MIB.

2.5 How aims and objectives are relate to Stakeholders.

2.5.1 Internal Stakeholders

2.5.1.1 Manager

Managers are the decision makers of the organization. They work towards the objectives of the organization and they will influence all the other stakeholders towards this objective. They manages, conducts, trains, manipulates, directs, deals, supervises, organizes and controls resources, expenditures, an organization, an institution, a team, a household, etc. Manager clears difficulties out of path of subordinate. Manager co-ordinates own group's work with that of the group in which he is a subordinate. MIB managers are a person who take all decisions and informed every information’s to their employees. Managers have knowledge to motivate their employees.

2.5.1.2 Employees

We believe in the dignity of every employee and in taking employee interests seriously. We therefore have a responsibility to:

Provide jobs and compensation that improve workers’ living conditions;

Provide working conditions that respect each employee’s health and dignity;

Be honest in communications with employees and open in sharing information, limited only by legal and competitive restraints;

Listen to and, where possible, act on employee suggestions, ideas, requests, and complaints;

Engage in good faith negotiations when conflict arises;

Avoid discriminatory practices and guarantee equal treatment and opportunity in areas such as gender, age, race and religion;

Promote in the business itself the employment of differently able people in places of work where they can be genuinely useful;

Protect employees from avoidable injury and illness in the workplace;

Encourage and assist employees in developing relevant and transferable skills and knowledge; and

Be sensitive to serious unemployment problems frequently associated with business decisions, and work with governments, employee groups, other agencies and each other in addressing these dislocations.

2.5.1.3 Owners/Investors

We believe in honouring the trust our investors place in us. We therefore have a responsibility to:

Apply professional and diligent management in order to secure a fair and competitive return on our owners’ investment;

Disclose relevant information to owners/investors subject only to legal requirements and competitive constraints;

Conserve, protect, and increase the owners/investors’ assets; and

Respect owners/investors’ requests, suggestions, complaints, and formal resolutions.

2.5.2 External Stakeholders

2.5.2.1 Customers

We believe in treating all customers with dignity, irrespective of whether they purchase our products and services directly from us or otherwise acquire them in the market. We therefore have a responsibility to:

Provide our customers with the quality services consistent with their requirements.

Treat our customers fairly in all aspects of our business transactions, including a high level of service and remedies for their dissatisfaction.

Assure respect for human dignity in services offered, marketing, and advertising.

Respect the integrity of the culture of our customers.

2.5.2.2 Governments

Governments in different regional offices of are also very important stakeholder in 3 Brothers Electronic Company. Because since 3 Brothers Electronic Company service is diversified into different countries need to follow the rules and regulations of the county, so before a giving service need 3 Brothers Electronic Company to know whether the counties law allows giving services it.

2.5.2.3 Shareholder

One who owns shares of stock in a corporation or mutual fund. For corporations, along with the ownership come a right to declared dividends and the right to vote on certain company matters, including the board of directors.

2.5.2.4 Competitors

We believe that fair economic competition is one of the basic requirements for increasing the wealth of nations and, ultimately, for making possible the just distribution of goods & services. We therefore have a responsibility to:

Promote competitive behaviour that is socially and environmentally beneficial and demonstrates mutual respect among competitors;

Refrain from either seeking or participating in questionable payments or favors to secure competitive advantages;

Respect both tangible and intellectual property rights; and

TASK 3

By considering the selected bank and the market which it operates, investigate the potential opportunities of implementing an e-commerce system to the organisation.

3.1 What is ecommerce?

It is a term for any type of business, or commercial transaction that includes the transmission of information through the Internet. It covers a variety of different types of businesses from consumer based trade sites, through public sale or music sites, to business exchanges trading goods and services between companies. It is currently one of the most important features of the Internet to arise.

E-commerce allow customer to electronically exchange goods and services without no limitations time or distance. E-commerce has been famous between past five years and is expected to continue at this rate or even accelerate. In the near upcoming the limits between "conventional" and "electronic" commerce will become gradually unclear as more and more businesses move sections of their operations onto the Internet.

The common use of internet has led to many business entities to venture into E-commerce. E- Commerce referrers to buying and selling goods and services over the internet. That happens in four different ways:

Customer to customer,

Customer to business,

Business to business,

Business to customer.

3.3 potential opportunities of implementing an e-commerce system to the organisation

That will give the opportunity to customers for online shopping. So they can purchase the product and get all the details of the products 24/7 through the web site.

Will give the organization the opportunity of operating their business even without a business premises.

When a transaction took place, by recording it in a data base the organizations can come up with clear financial statements with no errors.

By using e mails and fax, they can maintain a superior communication ship with the dealers and other relevant parties.

The organization can contract with their suppliers online and it will save time and also it will enhance the efficiency and the effectiveness in all the transactions.

Using an application to manage the stock of the organization will reduce the misplacements of stock and the related documents.

A Credit card payment system will give the opportunity to the consumers to do their payments online through their credit cards etc.

TASK 4

Evaluate the e-commerce system which are in use by competitors of the selected Bank and explain the benefits acquired by the customers and the competitors.

MIB have an important reason to follow the conduct of business on-line. If they fail to respond to the opportunities modelled by the Internet, they could be entrusted to a largely secondary role as commerce shifts to electronics over time. In that event, they would process payments for buyers and sellers engaged in e-commerce, but they would have little chance to involve individually with buyers and sellers or to proposal their own products in the electronic marketplace. By contrast, if banks do establish a presence on the Internet they should be in a position both to market traditional banking products more efficiently and to develop and sell new products required by e-commerce members. Along with this E-Commerce have many advantages and disadvantages to both customers and competitors accordingly.

3.2 Advantages and Disadvantages of E-Commerce

3.2.1 Lower Cost

Doing e-business is cost effective; it decreases logistical problems and puts a small business on a par with giants. Every financial transaction ultimately turns into an electronic process. The sooner it makes the alteration, the more cost-effective the transaction becomes.

3.2.2 Economy

In e-commerce there is no physical space needed to setup business, insurance, or infrastructure investment. All you need is an idea, a unique product, and a well-designed web storefront to reach your customers, plus a partner to do completion. This makes e-commerce a lot more economical.

3.2.3 Higher Margins

E-commerce means higher margins. Laterally with higher margins, businesses can improvement more control and flexibility and are able to save time when manual transactions are done electronically.

3.2.4 Better Customer Service

E-commerce means better and quicker customer service. Instead of calling your company on the phone, the web merchant gives customers direct to their personal account online. This saves time and money. For companies that do business with other companies, adding customer service online is a competitive advantage. The overnight package delivery service, where tracking numbers allow customers to check the whereabouts of a package online, is one good example.

3.2.5 Quick Comparison Shopping

E-commerce helps consumers to comparison shop. Automated online shopping assistants called hopbots scour online stores and find deals on everything from apples ro printer ribbons.

3.2.8 Information Sharing, Convenience, And Control

Electronic marketplaces improve information sharing between merchants and customers and promote quick, just–in–time deliveries. Convenience for the consumer is a major driver for changes in various industries. Customers and merchants save money; are online 24 hours a day, 7 days a week; experience no traffic jams, no crowds, and do not have to carry heavy shopping bags

3.3 Disadvantages and Disadvantages of E-Commerce

3.3.1 Security

Security endures to be a tricky for online businesses. Customers have to feel confident about the honesty of the payment process before they obligate to the purchase.

3.3.2 System and Data Integrity

Data shield and the integrity of the system that switches the data are serious concerns. Computer viruses are rampant, with new viruses discovered every day. Viruses cause unnecessary delays, file backups, storage problems, and other similar difficulties. The danger of hackers opening files and corrupting accounts adds more stress to an already complex operation.

3.3.3 System Scalability

A business develops a communicating interface with customers via a website. After a while, statistical analysis regulates whether visitors to the site are one–time or recurring customers. If the company expects 2 million customers and 6 million shows up, website performance is bound to experience degradation, slowdown, and eventually loss of customers. To stop this problem from happening, a website must be scalable, or upgradable on a regular basis.

3.3.4 E–commerce is not free

So far, success stories in e-commerce have forced large business with deep pockets and good funding. Brand loyalty is related to this issue, which is supposed to be less important for online firms. Brands are expected to lower search costs, build trust, and communicate quality.

3.3.5 Consumer Search is not efficient or Cost–effective

On the surface, the electronic marketplace seems to be a perfect market, where worldwide sellers and buyers share and trade without arbitrators. However, a closer look indicates that new types of intermediaries are essential to e-commerce. They include electronic malls that guarantee legitimacy of transactions. All these intermediaries add to transaction costs.

3.3.6 Customer Relations Problems

Not many businesses realise that even e-business cannot survive over the long term without loyal customers.

3.3.7 High Risk of Internet Start–up

Many stories unfolded in 1999 about successful executives in established firms leaving for Internet start–ups, only to find out that their get–rich dream with a dot.com was just that – a dream.

According to these benefits and drawbacks of the customers and competitors, we can come to understand that having an e-commerce system that is comparatively better than the competitors in many aspects will not only increase sales and customer base but it will gain the trust of the customers.

TASK 5

Setting up an e-commerce application can be costly yet effective in long term. Discuss the financial implication of setting up and running an e-commerce application by any organisation.

5.1 Setting up an e-commerce application

Before implementing an e commerce website organization, we should understand that it will be much expensive but will help the organization in the manner of much more profits in the near future. Those financial situations should consider the following

Target market place and customers

Domain Name that they are going to register

Type of the website

Payment gate ways

Customer services that they are going to provide

If the domain name depends on the organization target market palace and the environment, for example, organizations located in Sri Lanka targeting Sri Lankan customers it’s better to go for .lk domain name. There two types of E-commerce websites.

Catalogue website: it provides all product information without shopping card facility

Shopping card websites: that provides both catalogue and shopping card with payment gate ways if the company needs to add local banks as their payment gateway they have to pay 40000 For additionally to the specific bank,

There are few steps needed when implementing a website

Review the proposal and make negotiations further if necessary

Making advance payment 40% when the project is approved than the developing company move in to designing face, in most cases client supply most of the contents.

Final payment 60% done in the testing face, web developing company finalize the project and upload to the web once the final payment is made.

TESTING

Testing the development through the sub domain and side will be handed to the customer.

TIME FRAME

To implement a website it takes around one month (it depends according to the project), after developing a website every developing company provides 3 months free change management facilities. After 3 months to do the modifications clients have to pay the following

Modified existing page content, 500 per page

Adding new page+ adding text content , 1000 per page

Adding new page + adding text and image content, 1500 per page

Adding new page + copy writing + Adding text and images, 3000 per page

Actual cost

Description

Cost

Domain Name for 1 year .com, for free

free

Web hosting for 1 year,

1GB business class is free

Web development and designing

100000

Email Accounts up to 5 email accounts

free

Total

100000

Upgrade cost

Description

Cost

Annual renewal including domain, hosting and side maintenance

5500.00

Additional e-mail account

250 per e-mail

For.lk domain

3500 per year

Search engine optimization

free

Total

100000

Apart from these expenditures, advertising comes under an additional expeditor in applying e-commerce application to the organization.

The company shouldn’t only pay the attention to apply this new application but also they have to check whether their working force has the enough knowledge and experience in working with these e-commerce applications. If not they have to hire new workers to manage these systems so that will add another additional cost to the list of expenditures in applying a new e-commerce application.

TASK 6

Explain the design consideration to be made when designing an e-commerce application by the selected bank. Your designing considerations should be focused on the target markets, business process, payment option, security, reliability and the relevant legislations.

6.1 The targeted Market

A target market is the population to which you propose to provide services and opportunities. An object is resolute by the possibilities and opportunities. MIB main aim is to provide good services and provide great opportunities to fulfil customers’ needs in future based manner.

Target market can be defined as; it is set of activities of an organization that lead specific end. Mainly business process meets need of customers and delivering goods or a service that full fill customer needs. In many cases activity is the in fact a collection of related process operating in a logical order to achieve the ultimate goal.

6.2 Business process

Businesses can blow into online trade by joining e-commerce features like inventory management, credit card transaction support, and shopping carts into the websites.

6.3 Payment Option

When implementing e commerce system payment method system is very important. Coolest way to start and e commerce system is star by using the pay pal payment system. Offer pay pal has it up and down. Most people has pay pal or they like to charge on their credit cards via pay pal. How every first thing is a possibility of not losing customers without offering alternative payment system? Pay pal system offer ‘ALL IN ONE’ methods of accepting payments by internet and relatively low loads for. They provide a secure account gateway, merchant and also have the opportunity to buyers to prove.

6.4 Security

Security is very important when implementing an e-commerce system. Websites handle online transactions using credit cards, debit cards, pay pal. Have more submission issues are with an improved risk of the target of another sites and there are more serious concerns in case of loss or dishonesty of data. Banking services are highly regulated but even the smallest e-trailer influenced by the Payment Card Industry Data Security Standard More lately, this became more popular because of improved publicity and execution in response to last year work to explain and add requirements.

6.5 Reliability

Reliability of an e commerce system is foundation security system in e commerce. Referring to the safe operation of electronic trading system free against malicious attacks. If the system does not work well without external lateral attacks. E-commerce security is not worth mentioning. The security problem and the problem of the reliability of the system itself can be divided into different categories.

6.6 Legislation

For relevant legislation E-commerce sales of goods through the Internet is subject to laws and regulations that normally can be difficult and changes. Transactions and other electronic marketing such as promotional e-mails or online newsletters are synchronized.

TASK 07

Evaluate the suitability of implementing an e-commerce solution to the selected Bank.

Banks are planning and installing a range of new e-commerce products. Basically it means operating all the business transactions with the support of the internet. Hence banks may increasingly function as organizers of on-line commerce and see a decline in their established character as financial intermediaries.

The products described below prove the suitability of implementing an e-commerce solution to the MIB.

7.1 Establishing Internet Portals.

MIB is planning to participate in special Internet portals, "supersites" where many sellers will display their product offerings and huge numbers of buyers will visit. Some of these portals will feature a wide range of financial and non-financial product offerings; others will limit their offerings to financial services.

7.2 Verifying Identities.

MIB is also planning to offer a product that would defend e-commerce members against scheme arising from the misrepresentation of identities.

Using encryption technology, MIB would certify the identities of its own account holders and serve as the in-between through which its account holders could verify the identities of account holders at other banks. In this way, both sides of an e-commerce transaction would have some declaration that they were not dealing with an impostor.

7.3 Assisting Small-Business Entries into E-Commerce

Additional effort being undertaken by MIB involves helping smaller firms set up the structure interactive web site and payment abilities for engaging in e-commerce. In addition, a few banks are offering small businesses electronic obtaining services, including the co-operation of volume discounts from sellers (Wilder 1999; Dalton 1999).

7.4 Electronic Billing

Electronic bill presentment and collection services are being developed as an improvement to the current cash management and remittance-processing services offered by MIB to large companies that send out extensive volumes of frequent bills. In this effort, MIB will combine the e-mail capability of the Internet to send out bills with their own ability to process payments electronically through the interbank payment networks.

So there is an immense suitability in implementing e-commerce to a MIB. It will basically help the bank to carry on their market and develop their operations.

TASK 8

Risk is a potential of particular situation/action ends up with an undesirable outcome. Introducing an e-commerce application to an organisation can involve a certain amount of risk. Analyse the impacts (risks, benefits) of introducing an e-commerce application the selected bank.

Main risks related with e-commerce concern hackers, viruses, and interception of credit card numbers travelling over telecommunication lines. We can classify risks in three primary areas. That is information risks, technology risks, and business risks. These 3 types are directly connected to the banks as well.

8.1 Information risks

It is the information distributed and contained in web sites and associated with the conduct of e-commerce. Bordering to information risks are risks associated with misuse of information. Information risks that may face on MIB are:

1. Content on web page revealing web publisher to libel, insult of character, slander

2. Copyright infringement and invasion of privacy suits stemming from posted textual content

4. Copyright, patent, or trade secret violations by material used by web site developers

5. After unauthorized access to a web site, online information about employees or customers is stolen, damaged or unrestricted without authorization

6. Electronic bulletin boards containing insulting statements resulting in liability or embarrassment

7. Credit card information intercepted in transit is disclosed or used for fraudulent purposes

8. Information that has been changed or inserted in transmission is processed leading to erroneous results

9. Flight of intellectual property due to employees moving to competitors.

8.2 Technology risks

It includes risks containing hardware, software, telecommunications and databases. These risks include the penalties resulting from the misuse of technology or the use of inappropriate technologies required to address business needs. Technology risks that may face on MIB are:

1.        Unauthorized admittance to a web site,

2.        Contaminating a web site with computer viruses

3.        Internet service provider (ISP) server crashes

4.        Software error and omission risks producing unauthorized access

6.        Capturing and copying or changing non-credit card information during transmission

7.     Out-dated hardware or hardware lacking the capacity to process required traffic

8.     ISP phone numbers being busy

9.     Risk of unsuitably integrating e-commerce system with internal databases

10.     Incapability of customer or supplier computers to handle graphical downloads

8.3 Business risks

It concern customer and supplier relationships, and risks related with products and services marketed and distributed over the Internet. They also include risks related with managerial characteristics of the business including personnel and pledged relations. Business risks that may face on MIB are:

1.        Risks connected to payment to web site developers and arguments between developers and clients

2.        Lack of maintenance on current web pages

3.        Alterations in customer relationships re: data access, data ownership, distribution strategy, and marketing tactics

4.     Unnecessary dependence on ISP to support firm's business strategy

5.     Incapability to manage cycle time for developing, presenting, and processing web-based products

TASK 9

E-Commerce has impacted the society in different ways. Discuss the global impact of e-commerce on society.

E-commerce gives every business the competitive edge against large multinational organizations in the global market. Current electronic commerce has become an essential part of everyday business; we now must take a look at how the emergence of e-commerce has affected the global marketplace and how has e-commerce changed the regular and quality of living. It would also be important to discuss some of the drawbacks or poor effects that e-commerce has had on society. Electronic commerce has had a deep effect on global trade in services. World trade involving computer software, entertainment products, information services, technical information, product licenses, financial and professional services has grown quickly in the past decade.

E-commerce allows consumers to have more suppliers, sometimes including foreign suppliers and investors. Consumers can now search online to find the lowly price. E-commerce has made the global marketplace larger which makes the marketplace become more aggressive. The increase in competition is beneficial to consumers. The improved competition lowers prices for consumers and other businesses.

Further, the increase in information and choice available can help increase the competence of the supply and demand equilibrium the boost in competition also forces companies to become more efficient. As e-commerce grows, other countries are increasing their contribution in the global digital economy. Companies now have to introduce new technologies or methods to decrease overhead costs and increase productivity which is also brings lower prices to consumers. The leading products in both the business-to-business and business-to-consumer markets are electronically delivered products such as software, travel services, entertainment, and finance and other department of the organization.

In fact to the nature of such products, business is increased globally. Business-to business markets are growing quickly because e-commerce has a significant impact on overhead cost decrease and business effectiveness.

Businesses that use the Internet to buy, sell, distribute and maintain products and services are realizing important cost savings and increased sales opportunities and the benefits only increase as the network of businesses conducting electronic commerce grows There have been some negative effects on the economy due to the appearance of e-commerce. It is assumed that the availability of goods online should increase competition but this does not always occur. Of good reputation companies who have majority control over their industry can sometimes keep up high prices.

Further, the Internet allows companies to obtain pricing information from their competitors companies simply and allows them to react immediately to external changes. Company monitoring can also work against consumers. Since other companies can rapidly change their price, the original company would not make any extra revenue from increased. There is also the issue of product differentiation. Increased competition due to ecommerce allows companies to better create products especially for a positive target audience. This makes it difficult for consumers to compare products and lessens the competition and keep prices high.

Electronic commerce expands it has a superior social impact. The social impact of e-commerce is characterized by the globalization of markets, the shift towards an economy based on knowledge and information, and the growing prominence of technology in everyday life. E-commerce expands; there becomes a greater need to improve education about the business and technical side of e-commerce. Traditional educational institutions will have to incorporate e-commerce market and information technology into the set of courses to prepare new graduates for the new marketplace. The health sector is also being affected by the development of e-commerce. In some cases the use of these e-commerce sites can be help the system work more efficiently in turn be more cost effective.

By reducing costs using these methods more money can be made available to other areas of the health sector another aspect of society that is affected by electronic commerce is the intellect of community. Consumers can now belong to a more global community by being able to buy goods from around the world. However this has its own societal effects. There is a loss of direct physical interaction between individuals. There is also less consumer loyalty due to the global aspect and the lack of physical interaction of e-commerce. Companies now enclose to deal with an entire global market and many face difficulties in catering to specific customers to solidify their reliability.

For traditional businesses that do not conduct business online, they may begin to suffer electronic commerce continues to grow. As well, e-commerce helps to increase the use and improve computer technology that can be used by society. As more people begin to use e-commerce, more companies begin to create new technology to increase productivity. With the invention of new technology, there can be a better communications and easier access to the Internet in order to encourage an even larger market.

New technology also leads to more resources of the Internet easier to attain to more people in society. Again, as companies appear better methods to expand their online-businesses new technologies may be developed. These new technologies may not only help e-commerce, but may be useful in other parts of society as well and adverse effect of e-commerce is the manner is which consumers are now shopping.

It is argued that the Internet and the availability of e-commerce increases society's propensity to impulse buy. Desire buy is usually seen as short term, but with the introduction of e-commerce, the tendency to desire buy is becoming more long-term due to the accessibility and the convenience of online shopping. On-line shoppers are more impulsive than non-shoppers, seek more selection, and are less risk averse and less brand and price mindful, characteristics that have shown to be consistent with urge-driven impulsive purchasing behavior that ignores long term consequences. Impulse buying is considered short-term but consumers can become chronic compulsive buyers by shifting their enjoyment from specific purchases to the overall shopping experience.

Unfettered on-line buying could become a major social problem as e-commerce grows. The growing compulsive buying tendencies of consumers coupled with their similarity for the Internet, causes special concern.

It is speculated that there will be social costs from reduced productivity, personal bankruptcies, disrupted families and insolvent lives due continued unregulated buying from consumers. Today’s consumers benefits from a selection of products and services that has been unmatched in traditional channels in the past Without leaving the comforts of home and with a click of a button, consumers can access thousands of web sites and obtain any type of information or purchase any product they desire. The net economic growth due to the digital revolt will also benefit society by creation of highly skilled jobs. It is important that the current labor force and few workers be well educated and trained in order to qualify for such jobs. E-commerce will be the largest and most assorted way of doing business in the future since it has the ability to reach almost every market, every person, and every business and do so simultaneously and instantaneously.

Electronic commerce provides an exclusive way of doing business that comes with its own set of benefits and consequences. The size of the global market has increased which provides businesses with more customers and offers customers more choices. Through e-commerce, it is easier for consumers to individualize products and services to their specification. E commerce also limits the amount of links between the retailer and the consumer.

Products can now be shipped in a straight line from the manufacturer to the customer, which in turns makes online transactions cheaper than long-established transactions. Though there are many benefits to both consumers and business, the use of electronic commerce comes with its share of economic, social and legal issues. Consumers are doubtful to use online business because they often have limited guarantees about the isolation of their information. If the privacy issues can be addressed, electronic commerce has the probable to play a constructive role in helping improve the world of business. E-commerce systems could help further businesses set up personal relationships with customers, target specific niche markets, facilitate trust and leverage a range of other social and other stakeholders.

Conclusion

Finally after completing my assignment I have understood about some business skills for E-Commerce and how we conduct external and internal environment analysis for any type of business. PEST is a frame work of analysing External environment. PEST stands for Political, Economic, Social and Technological factors forcing any business.

According to the given scenario, I have chosen Maldivian Islamic Bank (MIB) for analysing all the tasks given in the project. So while doing this project I have taken a very close look in the bank. And research their day to day activities accordingly.

In this project, I have discussed MIB Aims and Objectives and how aim and objectives relate to the stakeholders. Father more, Advantages and disadvantages of ecommerce in MIB are mentioned with the potential opportunities that they can have.

In addition, I have clarify setting up an ecommerce website by providing proper financial statements. Design considerations are much more important perspective. However, I have focused in this document, target market, business process, payment option, security, reliability and legislation.

Finally, I have discussed the suitability of implementing ecommerce solution to the MIB with mentioning information, business and technological risk factors.

Reference

E, Kurt., 2012. Managing Risks in Electronic Commerce, [online] (23 September 2012) Available

at:< http://www.muhlenberg.edu/depts/abe/business/miller/ecrisks.html> [Accessed 29 january 2013]

S,Manjeet 2012. Advantages and Disadvantages of ecommerce, [Blog] Available

at:< http://www.manjeetss.com/articles/advantagesdisadvantagesecommerce.html> [Accessed 15 December 2012]

PFG, 2012. The Impact of electronic commerce in today’s society , [Blog] Available

at :< http://johnbaldwin.articlealley.com/the-impact-of-electronic-commerce-in-todays-society-1871086.html> [Accessed 01 January 2013]

Long, L. and Long, N. eds., 2005. Information technology in perspective. 12th Ed. New Jersey: Pearson Education