E-Commerce is a process of buying and selling products electronically by consumers and from companies to companies with computers as an intermediary for business transactions.
E-Commerce or commonly referred to as Ecom or Emmerce or EC is a routine business exchange using the transmission of Electronic Data Interchange (EDI), e-mail, electronic bulletin boards, facsimile machines, and Electronic Funds Transfers relating to shopping transactions on Internet shopping, online stock and bonds, download and sale of software, documents, graphics, music, etc., as well as Business to Business (B2B) transactions.
While the definition of E-Commerce according to David Baum (1999, pp. 36-34), namely: E-Commerce is a dynamic set of technologies, applications, and business processes that link enterprises, consumers and transactions through electronic transactions. goods, services and information.
Translated by Onno. W. Purbo: E-Commerce is a dynamic set of technologies, applications, and business processes that connect companies, consumers, and certain communities through electronic transactions and trade in goods, pelavanan, and information carried out electronically.
The definition of E-Commerce according to Kalakota and Whinston (1997) can be reviewed in the following 3 perspectives:
- From a communication perspective, E-Commerce is the delivery of goods, services, information, or payments through computer networks or through other electronic equipment.
- From a business process perspective, E-Commerce is an application of technology
The Purpose of Using E-Commerce in the Business World
The purpose of a company using an E-Commerce system is by using E-Commerce, the company can be more efficient and effective in increasing its profits.
Benefits of Using E-Commerce in the Business World
The benefits of using E-Commerce in a company as a transaction system are:
a. Can increase market exposure.
Online transactions that make it possible for all people around the world to order and buy products that are sold only through computer media and are not limited in distance and time.
b. Reducing operational costs (operating cost).
E-Commerce Transactions are transactions that are largely operational programmed on a computer so that costs such as showrooms, excessive salary burdens, and others do not need to happen
c. Widespread global reach.
Online transactions that can be accessed by all people in the world are not limited to time and place because everyone can access them only by using an intermediary media computer.
d. Improve customer loyalty.
This is because the E-Commerce transaction system provides complete information and information can be accessed at any time other than that in terms of purchases can also be done at any time even consumers can choose their own product that they want.
e. Increase supply management.
E-Commerce Transactions cause efficiency in operating costs for companies, especially on the number of employees and the amount of stock available so that to further improve the cost efficiency, a good supply management system must be improved.
f. Shorten production time.
In a company consisting of various divisions or a distributor where ordering raw materials or products that will be sold if they run out of goods can order it at any time because it is on-line and will be faster and organized because everything is directly programmed in the computer.
The statements of Onno W. Purbo above are also supported by Laura Mannisto’s statement (International Telecommunication Union, Asia and the Future of the World Economic System, 18 March 1999, London), namely:
a. Availability of more and more accessible information Availability of production information and prices can be accessed by buyers, sellers, producers and distributors.
b. Globalization Consumer production, distribution and service: relatively shorter distances and times, so companies can connect with business partners in other countries and serve consumers faster. Producers can choose places to produce and serve consumers not depending on where the consumer is located. Companies in low-income countries can access information and make business contacts without having to pay high fees.
c. Reduce transaction costs with an online and automatic order, payment and logistics system.
Threats of Using E-Commerce (Threats)
Threats are possibilities for occurrence of events that can endanger valuable assets.
There are several forms of threats that might occur:
• System Penetration
People who have no right to access the computer system can and are allowed to do everything according to their wishes.
• Authorization Violation
Violation or abuse of legal authority owned by someone who has the right to access a system.
Incorporating something into a system that is considered legal but not necessarily legal in the future.
• Monitoring Communications
One can monitor all confidential information by monitoring simple communication in a place on the communication network.
• Communications Tampering
Anything that endangers the confidentiality of someone’s information without penetrating, such as changing information about a transaction in the middle of the road or making a fake server system that can deceive many people to voluntarily provide their confidential information.
• Denial of service
Blocking someone from accessing information, resources, and other facilities.
Rejection of a transaction activity or a communication either intentionally or unintentionally.
Types of E-Commerce E-Commerce activities include many things, to distinguish them E-Commerce can be divided into 2 based on their characteristics:
- Business to Business, its characteristics:
• Trading partners who have known each other and between them have established relationships that last a long time.
• Data exchange is done repeatedly and periodically with agreed upon data formats.
• One of the actors does not have to wait for their other colleagues to send data.
• The commonly used model is peer to peer, where processing intelligence can be distributed in both businesses.
- Business to Consumer, characteristics:
• Open to the public, where information is shared publicly.
• The service used is also general in nature, so that it can be used by many people.
• Services used on request.
• A client-server approach system is often done. (Onno W. Purbo & Aang Arif. W; Getting to Know E-Commerce, pg. 4-5)
Here are some of the advantages of e-commerce:
- Do not recognize the existence of boundaries because transactions can occur even though consumers and sellers are in a different place
- make time efficient because it knows no boundaries or every e-commerce transaction can be carried out for 24 hours.
- Fewer employees are needed to conduct transactions so that they can erode the expenditure budget of the seller’s company.
Weaknesses of E-commerce
Berkut is a disadvantage of implementing e-commerce:
- Frequent frauds such as fictional credit cards, or sometimes seller fraud towards customers because the laws governing e-commerce are still not very developed.
- Consumers cannot see directly the condition of the goods to be purchased
- Narrowing jobs because the e-commerce industry does not require many employees to service transactions.
E-commerce Support Application
- E-mail and Messaging
- Content Management Systems
- Documents, spreadsheets, databases
- Accounting and financial systems
- Shipping and ordering information
- Reporting information from clients and enterprise
- Domestic and international payment systems
- On-line Shopping
- Online Banking