Electronic Trading System "E-commerce"

Understanding of Electronic Commerce (E-Commerce)
Electronic commerce, commonly called e-commerce, is the use of communication and computer networks to carry out business processes. Some people define electronic commerce (e-commerce) narrowly, ie transactions that cross only company boundaries that can be classified as e-commerce. If a transaction stays within the boundaries of the company, these people will call it an electronic business transaction. Most people consider electronic business and electronic commerce as one thing in common.
Broadly defined, that e-commerce can facilitate internal and external operations of the company. With this view, the terms electronic business and electronic commerce are the same. In broad definition, will use network access, computer-based systems, and the interface of a WEB browser will meet the requirements as an electronic trading.
E-commerce refers to all forms of commercial transactions involving organizations and individuals based on the processing and transmission of digitized data, including text, sound and images. Trade through electronic networks as the use of computers to facilitate all operations of the company. Many operations are internal; conducted within the company by the functional areas of finance, manufacturing, marketing, human resources and information services. Several other operations include firm relationships with the eight environmental elements.

Eight environmental elements

The goal of e-commerce is to create a new commercial environment in all its forms in the electronics century. Where some of the stages that are commonly found among sellers and buyers in commercial transactions can be integrated at once and automatically electronically.So can minimize transaction costs.In outline, e- commerce is currently being implemented to implement business-to-business, and business-to-consumer activities.
Electronic commerce is divided into 2 types of e-commerce:
§ Business-to-Cunsumer (B2C)
Trading through electronic networks relating to transactions between a company and the end user of the product. Business to Customer (B2C) Strategy via Electronic Network:

• Digital Products, Products and certain services can be sent to consumers directly via the internet. Examples of digital products such as songs, movies, software. Products and services can be consumed immediately after download.
• Physical Products, certain Products and services that can not be consumed directly via the internet, but must be delivered to the consumer. Sales and payment orders are acceptable through the internet, after which a shipment is made to the buyer.
• Virtual counter Hybrid Sales, Virtual Sellers are sales made by companies that do not have a physical storefront. Hybrid sellers are sales by companies that have physical stores and also have web pages to make sales.

§ Business-to-Business (B2B)
Trade through electronic networks relating to transactions between companies that do not involve end users.

• Involves relatively few people
• The people involved are highly trained in the use of information systems and familiar with business processes
  E-Commerce Models in Indonesia

1. Classified Ads, is one form of e-commerce is quite simple, can be regarded as an evolution of the classified ads that are usually found in newspapers into the online world. Sellers who use social media or forums to advertise, usually can not directly complete the transaction on the website concerned. But sellers and buyers must communicate directly to transact. Examples of classified ads: Tokobagus, Berniaga, and FJB-Kaskus.

2. Retail, is a type of e-commerce where all the buying and selling process is done through a system that has been applied by the retail site in question. Therefore, buying and selling activities in the retail is relatively safe, but usually the choice of available products is not too much, or just focus on one or two product categories. Retail example: Berrybenzka, Zalora, and Lazada.

3. Marketplace, can be considered as an online mall service providers, but selling not a website provider, but members who sign up to sell at the relevant marketplace website. Marketplace generally provides an additional layer of security for every transaction that occurs, such as an escrow payment system or more commonly known as a shared account. So every time a transaction takes place within the marketplace system, the marketplace will be the third party receiving the payment and keep it until the product has been shipped by the seller and received by the buyer. After the delivery process is completed, then the money payment is forwarded to the seller.
   The benefits of trading through electronic networks, namely:
   In terms of grouping the benefits, can be seen from:
   § Profits for the company

• Expansion of network of business partners. In traditional trading, it is very difficult for a company to find the geographical position of its business partner in another country or another continent.
• Efficient. It is very efficient, because every company does not need the equipment to run this business, and only need internet only. And lowered all levels of operational costs, so as not to seem expensive. Because it is run through online channels.
• Market expansion. Reach will be very wide, because it is not limited by geographical location wherever the company is located.
• Shorten Distance. Companies can get closer to consumers. By simply clicking the links that exist on these sites. Consumers can go to any company while they are.

§ Advantages for Consumers

• Effective. Consumers can obtain information about the products or services needed and transact in a fast and cheap way.
• Physically safe. Consumers do not need to go to the store where the company peddle goods and this allows consumers to transact safely because in certain areas may be very dangerous if driving and carrying cash in a very large amount.
• Flexible. Consumers can make transactions from various locations, either from home, office, internet cafe or other places.

§ Advantages for the Public Society

• Reduce Pollution and Environmental Pollution.
  With e-commerce that can be done anywhere, customers do not need to travel to the stores, which in turn will reduce the number of vehicles on the streets. Reduced vehicles on the road means saving fuel (BBM) and reducing the level of air pollution caused by motor vehicles that can pollute the environment.
• Opening New Job Opportunities.
  The e-commerce era will open up new job opportunities for those who are not technologically blind. There are new jobs such as computer programmers, web design, experts in the field of databases, systems analysis, experts in the field of computer networks, and so forth.
• Profitable Academic World.
  Changing the pattern of community life with the presence of e-commerce, academics will be further enriched with psychological, anthropological, socio-cultural studies, and partly related to ways and lifestyle related to the virtual world. In addition, the direct impact of the presence of the Internet will directly challenge the gait of scientists in the field of computer engineering, telecommunications engineering, electronics, software development, and so forth.

• Improving the Quality of Human Resources
  E-commerce, as well as computer technology in general, can only be done by people who do not stutter technology, so that in turn will stimulate people to learn computer technology for their own sake. In addition to doing e-commerce, someone may someday get lost to the quality sites that will improve the understanding of the person concerned.

§ Trade barriers via electronic network:

• High cost
  The point is to conduct or open an online trade that requires a lot of money, because it is usually the business is done by the middle class and above, but there are also from middle to bottom to pursue this business.
• Security issues
  The purpose is in e-commerce security problems are still a lot of in doubt, many also irresponsible parties to abuse the system like this, such as:
  · Fraud with theft of identity and lie to customers.
  · Less developed law in this e-commerce field.
• Unavailable software
  Unsaved or unavailable software means that there are still many applications that are less supportive in running on e-commerce, and many applications are still limited or little that is issued by the vendor, so this can be said as an obstacle in e- commerce.
• Not all companies participate in trade crowds through electronic networks.

Business applications
Some common applications related to e-commerce are:
· 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
· Newsgroups
· On-line Shopping
· Conferencing
· Online Banking / internet Banking
· Product Digital / Non Digital
· Online SEO

Trade Strategy Through Electronic Network
ü Inter-Organization System
Inter-Organization System (IOS) is a combination of related companies so that they function as a single system; who work together to achieve common goals. Companies that make up IOS are called trading partners or business partners. These trading partners participate in iOS in the hope of gaining certain benefits. The benefits are:

1. Comparative efficiency; by joining IOS, trading partners can provide their goods and services at a lower cost than their competitors. Improvements in this efficiency can come from within and relate to other organizations.

• Internal efficiency, consisting of improvements in the operation itself allowing companies to gather data faster, analyze faster and make decisions faster.
• Inter-organizational efficiency, including improvements gained through cooperation with other companies.

1. Bargaining power; the ability of a company to resolve disagreements with its suppliers and customers in its favor. The satisfaction comes from 3 basic methods:

• Unique product features.
  easier booking, faster delivery, faster response time for information requests
• Decrease in costs related to search.
  reduce the cost of shopping in finding suppliers, can identify alternative products by getting the lowest price.
• Increased switching costs.
  the company wants if the customer switches to a competitor then the cost of switching becomes expensive. Product dependence with each other is very high.

Here is an overview of E-Commerce strategy, methodology and technology selection:

ü Electronic Data Interchange (EDI)
Some commercial activities have actually been carried out over the network. However, the operational level is limited to business-to-business transactions and do so through virtual networks that are private and expensive. Electronic Data Interchange (EDI) for example, has been implemented several decades ago to conduct busines transactions to large-scale business.
lektronic Data Interchange (EDI) is the transmission of data in a structured form and machine-readable directly from computer to computer between multiple companies. Electronic Data Interchange (EDI) is typically used between suppliers and manufacturers. However this system lacks sufficient flexibility to meet the demands of the emerging market today. On the internet, product order can now be done by simply looking at the product catalog, and then putting it into the electronic shopping cart by pressing the mouse button to complete the purchase procedure after filling out the order form.

Standard format for basic transactions of Electronic Data Exchange

Level of EDI implementation:

1. Level 1 users, only 1 or 2 sets of transactions are transmitted to a limited number of trading partners.
2. Level 2 users, many sets of transactions are transmitted to a large number of trading partners.
3. Level 3 users, not just a set of transactions that are transmitted to many trading partners, but the company's computer applications are tailored to the EDI approach.

Factors that may affect EDI decisions and identify whether the company will be proactive or reactive:

 1. Competitor pressure.

If the company is in a worse position than its competitors or if the trade industry / association exerts strong pressure, the company will set EDI reactively.

 2.Kekuasaan implemented.

If a company can exercise power over other IOS members, the company will be proactive in applying EDI.

1. Internal needs
   If the company sees that participation in iOS is a way to improve its own operations, the company will implement EDI proactively.

   Top management support.

Regardless of whether companies act proactively and reactively, top management support always influences decisions.

Internal and environmental influences on EDI decisions
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The approach taken will determine how the company executes its implementation. Research Premkumar and Ramamurthy concluded that proactive companies tend to:
§ Make better EDI project planning.
§ Build better relationships with many trading partners.
§ Do a better job of integrating EDI with other applications.
EDI Company Enjoying Direct and Indirect Benefits (See figure 5)

Manfaat langsung dan tidak langsung perusahaan EDI
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Business Process Redesign (BPR)
Replacement of outdated processes with newer ones.
BPR affects information services (IS) in 2 ways:
§ Applying BPRs, to redesign a computer-based system that can no longer be maintained through regular system maintenance.
§ The company implements the BPR for its main operations, the business must have a wave impact resulting in the redesign of a computer-based system.

BPR implementation techniques:
§ Engineering retreats, the process of analyzing a system to identify its elements and relationships and to create documentation in a higher level of abstraction than is present.
§ Restructuring, transforming a system into another without changing its functionality.
§ Reengineering, a complete redesign of a system with the aim of changing its functionality (advanced engineering).

Trade Tenology Through Electronic Networking:

1. Direct connection, companies may establish data communications networks with their trading partners using circuits provided by public telecommunication providers.
2. Value-added networks, provided by sellers that not only provide the circuit but also provide the many services necessary to use the circuit for EDI.
3. The Internet, enabling a global communications network that not only connects trading partners but also includes customers.

The path to trade through electronic networks.
o.Collecting business intelligence
"If you want to participate in trade through an electronic network, the first thing you need is an understanding of its elements."
o.Establish an inter-organizational system (IOS)

The key success factor in e-commerce
In many cases, an e-commerce company can survive not just relying on the strength of the product alone, but with the presence of a reliable management team, timely delivery, good service, good business organization structure, network infrastructure and security, website design good, some factors include:

Provide competitive pricing
Provide responsive, fast, and friendly purchasing services.
Provide the complete and clear information about product and service.
Provide many bonuses such as coupons, special offers, and discounts.
Give special attention to such a purchase proposal.
Provides a sense of community for discussion, feedback from customers, and more.
Facilitate trading activities.

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