Computers Today June 1998 Master File: Hurdles in the Long Stride Pg 2

Perhaps assessing the trend of businesses (and users) choosing online options at work, Netscape is shedding its "browser-only company" identity, and will focus on helping enterprises build intranets, while introducing them to extranet or "virtual trading communities." Ramesh Nava, managing director of Netscape Communications Corp. for South Asia, asserts that Netscape has "both tools and full-blown applications" to back up this initiative. Nava said that Netscape sees Internet commerce as the "next exploding Internet market."

Netscape is not the only player to move towards facilitating its customers in e-commerce. IBM Corp. is also gearing itself up to provide 'e-business' solutions. Other players such as Hewlett-Packard Co. and Compaq-Tandem have launched servers (hardware/software) that will cater to electronic commerce. Cognos Inc., a leader in business intelligence tools, has developed DataMerchant that allows corporates to access business intelligence data from anywhere around the globe, anytime they want it.

Finally, Microsoft and Sun Microsystems are also not far behind, as both their technologies—ActiveX and Java—are capable of providing solutions for developers with security strategies to base their products on.

From VANs to Internet

Electronic commerce has, so far, meant electronic data interchange (EDI) over value-added networks (VANs) used by corporate organisations. That was computer-to-computer exchange of routine business documents in a standard format. Now, it has the scope to use the Internet too as a medium.

The Internet enables customers, partners and users to access a company's EDI network, which earlier was closed to smaller companies, simply because of the costs involved. Chase Manhattan Bank estimates that VAN charges could reach as high as $100,000 per month, effectively locking out smaller companies. A good example is the Boeing Web site. Before it was set up, only Boeing's top 20-30 customers were online with Boeing's EDI system over private network connections. Other customers used fax, telephone and E-mail to order airplane parts, a slow and tedious process.

While the Internet speeds up transaction times, another advantage it has over EDI transactions conducted over a private network is the connect charges applicable. Traditionally, VAN providers charge for EDI on a per-transaction basis. Organisations that use EDI therefore tend to send transactions in a batch to their customers once a day. Over the Internet, where all connect charges are fixed, organisations can well afford to send transactions at any time they want to, thus enabling realtime commerce.

Even so, risk is still a fundamental issue in e-commerce, Greene of IBM said. They are not those of fraud or hacker attacks, he argued, but business risks. For instance, e-commerce can give almost any business worldwide reach. That means "you're dealing with customers you've never seen and never will, in geographies of which you have very little understanding." For instance, he said one IBM customer, a camera manufacturer in USA, got 450 overseas orders within two months of creating a Web site. That was good news, but it also created some problems, such as dealing with multiple languages and providing over a long distance the kind of customer service the company used to offer its domestic customers.

Ease-of-use is another critical issue in electronic commerce success, Greene said. "It's still too hard for my mother to do this stuff." He noted that Java has some potential to help with this. Noting that convenience may mean ease-of-use to some people, and 24-hour access to others, Greene urged businesses to "find out what the convenience factors are for your customers."

E-commerce, so far covering EDI-based business-to-business transactions, or EDI-over-Internet-based transactions, and business-to-consumer online transactions, could soon use a set of electronic tools such as bar-coding, imaging, E-mail, point-of-sale data capture and automated workflow management systems, pointed out Ricardo H. Dujua, general manager of EDINet Philippines, speaking at the Supermarket Show 97 last year. Dujua predicts that soon more and more shoppers will use the Internet as a medium of business. The electronic system will eliminate the need to set up physical stores, warehouses, and carry inventory.

It is also probable that not only will the greater adoption of e-commerce change the way retailers conduct business, it may also bring pressure to bear on them to be more responsive to customer needs.

If customers find more avenues to conduct transactions, so also will businesses, as news of the plans to set up of what is claimed to be the first, neutral high-capacity commercial Internet exchange in Malaysia indicates. Late last year, Digital Equipment Corp. and Wargamedia, Kuala Lumpur, revealed plans to build the new facility in the Multimedia Super Corridor. "The Kuala Lumpur Internet Exchange (KLIX) will foster the growing business-to-business use of the Net by companies in Malaysia and Asia," said HarJono Zaln-Al-Abidin, CEO of Wargamedia.

The world is becoming increasingly networked, changing our methods of working, and lifestyles. That's a cliche, but it's also true. And possibly that feeling of the mundane is obscuring the diverse change agents at work—the Internet, browsers, push technology, VANs, Web pages, cable TV, EDI or e-commerce. Once the hypes are cleared, and the mist lifts, usage would be fun, business easy.

So You Want to Buy Your Groceries Online?

As you browse through the Net, you hit upon a music Web site, where you can listen to samples of CDs, and even order them online. A travel site lets you reserve hotel rooms. Other sites allow you to buy books, flowers, chocolates, your daily groceries, PCs, and even gourmet alligator! While the Web has expanded with sites offering a wide range of goods and services, vendors have developed the infrastructure and the solutions needed to enable online transactions.

Virtual storefronts are now coming up on the Web, as Tandem offers iTP Virtual Store, a multihost Internet shopping system. Using this (or similar systems), a vendor could set up a 'virtual shop'.

World Avenue, IBM's electronic shopping mall on the Web, being beta tested, has been used to generate 5,500 orders from 200,000 online customers, for some $275,000 worth of caps, mugs, and other Olympics merchandise.

As you browse through the store, that runs an 'e-commerce server', such as the HP Domain Commerce server, or is part of an 'electronic mall', such as IBM's Net.Commerce, the server helps you select an item (say an Olympic souvenir mug), and place an order. Such servers carry software to verify transactions, perform accounting duties, guarantee payments, and even create digital money.

Wishing to pay for the item, you send an enciphered request for payment to your bank/third-party payment provider. Your bank will then remit to you, a secure packet of 'e-cash'.

Using CyberCash's Wallet application, you send an enciphered payment request to CyberCash's server. Once the credit is authorised by CyberCash over secure lines to your bank, 'money' in Wallet is used to complete the purchase.

You then send the exact amount of e-cash needed to buy the Olympic souvenir to the virtual store. The server at the store then sends that packet of cash to its bank.

The merchant bank then sends a request for transfer of funds to your bank, which, the latter, after verification, performs. This is where actual funds are transmitted from your bank to the merchant bank.