The next example is probably the one that you expected me to introduce first: that of selling goods over the internet. However, I deliberately introduced supply chain management first since it is an area where companies are making huge savings in their investment in internet technology. The investments in retailing using the internet (e-tailing) are only gradually being realised.
The archetypal e-tailing application Amazon is renowned for the fact that it only sells books over the internet and doesn't even take telephone orders. It has one of the best organised websites and is continually referred to by journalists as an e-commerce success story.
Customers of Amazon interact with its website and carry out a number of functions including:
browsing readers’ reviews of books;
reading feature articles about books and authors similar to those found in magazines and newspapers;
searching for details of a book based on information such as the author's name or the title of the book;
browsing the books which are the Amazon bestsellers;
ordering books using credit cards or some other similar payment method;
tracking the progress of an order.
Behind the scenes of the Amazon site are a number of conventional functions which are found in all retailing applications, these include:
stock management: keeping track of what books are in stock and ordering titles when stocks become low;
payment management: paying suppliers of books for those that have been delivered;
customer payment management: keeping track of payments made by customers and of payments made by credit card companies and banks which correspond to the customer payments;
delivery: the process of sending books to customers;
market analysis: the process of analysing sales in order to determine what books to order and which to discount in the future. This analysis occurs at both the customer level and at a temporal level in that customer preferences are processed and the times and dates when they express these preferences are analysed; for example, in order to answer questions such as what books sell well at Christmas or at Easter?
Most of these functions would be associated with any bookseller, irrespective of whether they use the internet or not.
Another myth about e-commerce
One of the myths about e-commerce is that the development of e-commerce systems is radically different from other commercial systems. I would say that it is somewhat different in that you have to worry about many of the problems that occur with distributing processing in a network; however, many of the functions required in the majority of e-commerce systems can be found in their conventional counterparts. Indeed, many e-commerce systems which are fronted by web servers still contain computers which were common ten years ago and are programmed in languages such as COBOL and C – languages which are not automatically associated with internet software development. Much of the analyses required for an e-commerce system are the same that you would carry out for a conventional system and also quite a lot of the design; however, they do differ in that the design of such systems is a lot trickier, for example to guarantee response times from a collection of computers communicating over the internet is a tough task.