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 ECis a routine business exchange using the transmission of Electronic DataInterchange (EDI), e-mail, electronic bulletin boards, facsimile machines, andElectronic Funds Transfers relating to shopping transactions on Internetshopping, 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 DavidBaum (1999, pp. 36-34), namely: E-Commerce is a dynamic set of technologies,applications, and business processes that link enterprises, consumers andtransactions 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, services, and information carried out electronically.
The definition of E-Commerce according to Kalakota andWhinston (1997) can be reviewed in the following 3 perspectives:
1. From a communication perspective, E-Commerce is thedelivery of goods, services, information, or payments through computer networksor through other electronic equipment.
2. From a business process perspective, E-Commerce is anapplication of technology
towards automation of business transactions and work flow.
3. From a service perspective, E-Commerce is a tool thatfulfills the wishes of companies, consumers, and management to cut servicecosts when improving the quality of goods and increase the speed of shippingservices.
4. From an online perspective, E-Commerce provides theability to buy and sell goods or information through the internet and otheronline facilities.
The Purpose of Using E-Commerce in the Business World
The purpose of a company using an E-Commerce system is byusing E-Commerce, the company can be more efficient and effective in increasingits profits.
Benefits of Using E-Commerce in the Business World
The benefits of using E-Commerce in a company as atransaction system are:
a. Can increase market exposure.
Online transactions that make it possible for all peoplearound the world to order and buy products that are sold only through computermedia and are not limited in distance and time.
b. Reducing operational costs (operating cost).
E-Commerce Transactions are transactions that are largelyoperational programmed on a computer so that costs such as showrooms, excessivesalary burdens, and others do not need to happen
c. Widespread global reach.
Online transactions that can be accessed by all people inthe world are not limited to time and place because everyone can access themonly by using an intermediary media computer.
d. Improve customer loyalty.
This is because the E-Commerce transaction system providescomplete information and information can be accessed at any time other thanthat in terms of purchases can also be done at any time even consumers canchoose their own product that they want.
e. Increase supply management.
E-Commerce Transactions cause efficiency in operating costsfor companies, especially on the number of employees and the amount of stockavailable so that to further improve the cost efficiency, a good supplymanagement system must be improved.
f. Shorten production time.
In a company consisting of various divisions or a distributorwhere ordering raw materials or products that will be sold if they run out ofgoods can order it at any time because it is on-line and will be faster andorganized because everything is directly programmed in the computer.
The statements of Onno W. Purbo above are also supported byLaura Mannisto’s statement (International Telecommunication Union, Asia and theFuture of the World Economic System, 18 March 1999, London), namely:
a. Availability of more and more accessible informationAvailability of production information and prices can be accessed by buyers,sellers, producers and distributors.
b. Globalization Consumer production, distribution andservice: relatively shorter distances and times, so companies can connect withbusiness partners in other countries and serve consumers faster. Producers canchoose places to produce and serve consumers not depending on where theconsumer is located. Companies in low-income countries can access informationand make business contacts without having to pay high fees.
c. Reduce transaction costs with an online and automaticorder, payment and logistics system.
Threats of Using E-Commerce (Threats)
Threats are possibilities for occurrence of events that canendanger valuable assets.
There are several forms of threats that might occur:
• System Penetration
People who have no right to access the computer system canand are allowed to do everything according to their wishes.
• Authorization Violation
Violation or abuse of legal authority owned by someone whohas the right to access a system.
Incorporating something into a system that is consideredlegal but not necessarily legal in the future.
• Monitoring Communications
One can monitor all confidential information by monitoringsimple communication in a place on the communication network.
• Communications Tampering
Anything that endangers the confidentiality of someone’sinformation without penetrating, such as changing information about atransaction in the middle of the road or making a fake server system that candeceive many people to voluntarily provide their confidential information.
• Denial of service
Blocking someone from accessing information, resources, andother facilities.
Rejection of a transaction activity or a communicationeither intentionally or unintentionally.
Types of E-Commerce E-Commerce activities include manythings, to distinguish them E-Commerce can be divided into 2 based on theircharacteristics:
1. Business to Business, its characteristics:
• Trading partners who have known each other and betweenthem have established relationships that last a long time.
• Data exchange is done repeatedly and periodically withagreed upon data formats.
• One of the actors does not have to wait for their othercolleagues to send data.
• The commonly used model is peer to peer, where processingintelligence can be distributed in both businesses.
2. Business to Consumer, characteristics:
• Open to the public, where information is shared publicly.
• The service used is also general in nature, so that it canbe 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:
1. Do not recognize the existence of boundaries becausetransactions can occur even though consumers and sellers are in a differentplace
2. make time efficient because it knows no boundaries orevery e-commerce transaction can be carried out for 24 hours.
3. Fewer employees are needed to conduct transactions sothat they can erode the expenditure budget of the seller’s company.
Weaknesses of E-commerce
Berkut is a disadvantage of implementing e-commerce:
1. Frequent frauds such as fictional credit cards, orsometimes seller fraud towards customers because the laws governing e-commerceare still not very developed.
2. Consumers cannot see directly the condition of the goodsto be purchased
3. Narrowing jobs because the e-commerce industry does notrequire many employees to service transactions.
E-commerce Support Application
1. E-mail and Messaging
2. Content Management Systems
3. Documents, spreadsheets, databases
4. Accounting and financial systems
5. Shipping and ordering information
6. Reporting information from clients and enterprise
7. Domestic and international payment systems
9. On-line Shopping
11. Online Banking