More Can Be Done to Perfect the System?
B. Problem Formulation
1. Advantages and disadvantages of doing transaction through the Internet (E- Commerce)
and the purchaser (buyer) in the trade transactions, although the parties are in two different continents. E-Commerce transaction does not require any assembly in the negotiations stage.
The presence of E-Commerce is a business that is a promising alternative to be applied at this point, because the E-Commerce provides much convenience for both parties, both the seller (merchant) or of the purchaser (buyer) in trade transactions, although the parties are in two different continents. The E- Commerce transaction does not require any assembly in the negotiations stage.
Therefore, the Internet network can transcend geographical and territorial legal jurisdiction.
E-commerce (electronic comers) is the purchasing, salesing, marketing goods and servicing over the electronic systems such as Internet and television, the World Wide Web, or network-other computer networks. E-commerce involves electronic funds transfer, electronic data interchange, automated inventory management systems, and automated data collection systems. One of the networks which are used is the internet. Meanwhile Kalakota and Whinton defined e-commerce from several perspectives, is a communications perspective, e- commerce is the delivery of information, goods and services, through a network of telephone or other communication lines. From the perspective services, e- commerce is a tool that is used to reduce costs in ordering delivery, business process perspective, e-commerce is the application of technology towards the automation of business transactions and online perspective, e-commerce provides the ability to sell and buy goods over the internet and other online services networks. The whole definition described above basiclly have the same components that include buyers, sellers, goods and services, the media which is used in this case is the internet. Information technology is constantly evolving, especially the internet is a driving factor of e-commerce development. The Internet is a global network that brings together computer networks worldwide, allows the establishment of communication and interaction with each other throughout the world. Until now, the Internet is an ideal infrastructure to run e- commerce. E-commerce that becomes synonymous in running the business on the internet.
By using information technology, e-commerce can be used as a solution to assist companies in developing corporate and business pressures. The high pressure of the emerging business due to the high level of competition requires companies to be able to provide a response. E-commerce can improve cost efficiency and productivity of the company.
The positive impact of e-commerce is a revenue stream (stream of income) could be a promising that can not be found in traditional transaction systems, increases market exposure (market share), lowers operating costs (operating costs), extends coverage (global reach), increases customer loyalty, improves supplier management, shortens production time and improves the value chain (the chain of revenue).
The negative impact of e-commerce is in terms of direct financial loss due to fraud. A fraudster transferring money from one account to the other account, or he has been all change their existing financial data, theft of valuable information, loss of business opportunity due to interruption of service, access to the resource usage by unauthorized parties, lost the confidence of consumers and losses not unexpected.
The examples of e-commerce are purchasing books online, online electronic purchases, purchase of vehicles through online and purchase clothing through online, etc. The advantages of e-commerce are more time efficient, because the presence of e-commerce can order the good by phone or the internet site and it can be delivered. While the disadvantages of e-commerce are it is not very secure, because usually when a transaction using a credit card or account information, it can allow something unexpected happens. An e-commerce company can survive not only because of the good product, but also with the reliable team management and on-time delivery. The factors that must be considered in the e-commerce business are to provide competitive prices, reliable presence services, provide information and services and the ease in trading activities. E-commerce is one website which provides or can perform online transactions or it can also be a way to shop or trade online or direct selling which utilizes Internet facilities using websites that can provide "get and deliver". E- commerce will change all marketing activities and also reduce operational costs for trading activities (trading).
A key factor in the success of e-commerce in a company is not only just relying on the strength of the product itself, but also with a team management that is reliable, timely delivery, good service, good business organizational structure, network infrastructure and security, good web site design, several other factors that provide competitive prices, providing purchasing services are responsive, fast, and friendly, providing goods and services that are comprehensive and clear, providing a lot of bonuses such as coupons, special offers and discounts, giving special attention such as the proposed purchase, providing a sense of community for discussion, input from customers and facilitate trading activity.
The purposes of E-Commerce applications are people who want to buy goods or transactions via the Internet only need internet access and its interface using a web browser, making e-commerce portal/e-shop is not just a shopping portal but a gathering place for the community to build a base community, build market concept that it is not just a place to buy and sell as an information center (release, product reviews, consultations, etc.), service-oriented management, a combination of conventional and virtual service conception: responsive (fast response and friendly), dynamic, informative and communicative and the information is up to date, multi-directional communication dynamic.
We recognize the classification of E-Commerce as the existence of pure e- commerce and e-commerce partial. An e-commerce pure or partial categorized based on the degree of digitization of a traded product, process, and delivery agents. If all aspects of the e-commerce system that are digital, it can be categorized as pure e-commerce. In addition, other characteristics of the pure e- commerce is actually presenting organization online, using new-economy business model organization, and selling products or services online only.
Meanwhile, partial e-commerce is characterized by a merger between traditional and digital aspects/physical, the business model uses click-and-mortar organization (merger between offline and online), as well as the conduct of business activities mainly in the real world.
The advantages of e-commerce presence among Stream revenue (revenue streams) are may be a new promising that can not be found in traditional transaction systems, increases market exposure (market share), lower operating costs (operating costs), extending coverage (global reach), increases customer loyalty, improves supplier management, shortens production time and improves the value chain (the chain of revenue). The another advantages when it is viewed from the actors in e-commerce, namely profits for the Company are to shorten the distance, market expansion, the expansion of the business partner network availablity and efficiency, in other words speed up service to customers, more responsive service, and reduce costs associated with paper such as the cost of postal mail, printing, reports, and in order to increase revenue. For the Consumer the advantages are effective, safe and flexible. For the General Public, reducing pollution and environmental pollution, new employment opportunities, favorable academic world, enhancing the quality of HR. Using internet technology, the excess value of the business is generating new revenue through online sales, reduces costs through sales and customer support online, attracts new customers through marketing and web advertising and online sales and creates new products that can be immediately accessed through web.
The disadvantages of e-commerce is in terms of direct financial loss due to fraud.
A fraudster transfers money from one account to another, or he has to replace all the existing financial data, theft of valuable confidential information. Disruption that could arise discloses all such confidential information to parties who are not entitled to and may result in large losses for the victims, loss of business opportunity due to interruption of service, non-technical errors such as sudden power outages, and the use of access to resources by unauthorized parties.
Suppose a hacker who managed to break into the banking system. After that he moved a number of other people's accounts to his own account, lost the confidence of the consumer. This is due to various factors such as the work done on purpose by another party who attempted to overthrow the company's reputation and unexpected losses. Disturbances could be caused by deliberate,
dishonesty, improper business practices, human factors error or electronic systems error.
There are several methods of securing data in the transaction E-Commerce and E-Bussines: Public Key Cryptography: an asymmetric system (not symmetrical) using multiple keys, public key to encrypt data, and the private key to decrypt the data. The public key is distributed throughout the world while the private key remains stored. Anyone who has the public key can encrypt information that can only be read by someone who has the private key even if you have never known at all not even know who owns the public key, example: Elgamal, RSA, and DSA.
The advantages are: provide security to anyone who exchanges the information between them even though there is no agreement on advance data security as well as mutually do not know each other, increasing individualism, the electronic commerce and make this person can trade the goods/services needed without meeting with anyone, sometimes potential disappointment, what is seen on the screen computer monitor sometimes different from what is seen by naked eye and is not humane, often once a person goes to the store & mall do not simply want to satisfy their need for goods/services specified, but can also to refresh, meet friends and family and so on.
The examples of Applications E-Commerce: E-commerce is going to change all marketing activities and also while cutting operational costs for trading activities (trading). Some applications of e-commerce, among others: the tourism industry and travel agency, for example: www.expedia.com, internet job market, for example: www.monster.com, real estate, for example: www.ired.com, online stock trading, example: www.etrade.com, internet banking, for example: www.bii.co.id, online auction, for example: www.bekas.com, online publishing, example:
www.kompas.com, virtual universities or e-university examples: www.cityu.edu.hk, online consulting, example: www.knowledgespace.com, e-insurance, for example:
www.insurerate.com, electronic stamp, example: www.estamp.com, and so on.
The weaknesses of Constraints E-Commerce, according to a survey conducted by CommerceNet http://www.commerce.net/, buyers or shoppers have not put their trust in e-commerce, they are not able to find what they are looking at e- commerce, there is no easy and simple way to pay. In addition, surfing in e- commerce has not really smooth. E-commerce customers are worried about credit card theft, the secrets of their personal information, and poor network performance. Generally, buyers are still not convinced that it would be advantageous to connect to the Internet, search for shopping sites, waiting for downloading images, trying to understand how to order something, and then worry about whether their credit card numbers taken by hackers. It seems to reassure consumers, e-merchants have to do a lot of customers. However, Gail Grant, head of the research institute in Commerce Net http://www.commerce.net/
predicts that most buyers will be won over after a few years. Grant says that if the
web page can be created labels that provide information about products and prices, would be very easy for search engines to find products online. It has not happened yet is because most merchants want people to find their products but not its competitors, especially if it turns out the price of a given competitor is cheaper.
For system -to- business, business issues are less emotional on top, but still there are serious issues. Businesses do not have a good model of how to set up their e- commerce sites, They have difficulty in sharing the information collected online with other business applications. The problems that might be the main obstacle is the idea of sharing business information with customers and suppliers it is the main strategy in the e-commerce business to business.
The main key to solve the problem is a merchant must stop thinking that somehow propped himself on Java applets then all problems will be solved, but the truth is actually the merchant will have to restructure their operations to take maximum advantage of e-commerce. Grant said, "E-commerce is just like any automation-it amplifies problems with their operation they already had".