The paper is an examination of the uniqueness of the EC life cycle. There are three major steps that have been identified in this cycle and they are accessing information, negotiating and exchanging services or goods. Each phase comes with its unique needs as seen in the needs analysis section. In the first phase, consumers have difficulties filtering information and this can be solved through various protocols. Suppliers are faced with the problem of responding to consumer needs quickly and accurately and they can achieve this through agent technologies. In the second phase, suppliers are faced with the problem of too much competition from individuals offering the same products and they can solve this through virtual organizations. The third phase must involve an exchange. Consumers and suppliers are faced with the problem of security and this can be ensured by employment of various software applications.
Introduction
Electronic commerce (EC) has grown by leaps and bounds over the past decades with a large share of the transactions being drawn from inventory management systems, supply chain management, electronic data exchange, online transactions, electronic fund transfer, data collection automations and many others. (Chaudhury, 2003) Normally, during any transaction, the participating groups must go through a series of steps in order to complete the exchange of goods or services and this is what is often known as the life cycle of the transaction. The same thing applies to e commerce although there are some minor variations. This EC life cycle will be analyzed in subsequent portions of the paper then a suitable needs analysis will be conducted.
In electronic commerce, there are three major steps involved in finalizing a transaction: the first entails providing and accessing information, the second is negotiation of the parties and the third and final step is exchange of services or products concerned. In order for any EC transaction to occur, consumers must be made aware of the availability of services and products on offer and the means of accessing those items through distribution and shipping. Aside from that, suppliers have to know about identities or characteristics of potential consumers, their preferred distribution models and other aspects. Through this step of the EC cycle, it then becomes possible for concerned parties to put out their offers and for demand of the commodity or service to be assessed. (Shaw & Schlueter, 2007)
It should be noted that this aspect of the cycle does not cost as much as it did in traditional transactions. E commerce has diminished costs of advertising and marketing as suppliers can dispense information about their products or services to clients quite easily. The level of reach has also been heightened by e commerce because now sellers can reach a vast number of consumers even if those individuals come from the opposite side of the globe. This first phase in the EC cycle can also yield results easily for sellers and buyers because that information is normally available for twenty four hours in a day. Costs for dispensing or accessing information in electronic commerce are also very low since all one needs is internet connection. However, sometimes, it may be necessary to pay some preliminary costs.
It should be noted that in order to get to what one needs in such a huge array of possibilities, there must be a system that can facilitate selection of the right products. This is normally done through filtering mechanisms. (Seynold, 2006)
The second phase which is negotiation involves coming up with possible solutions to the concerned parties’ problems. In other words, suppliers and buyers must reach a consensus where the supply side meets the demand side. What this implies is that now parties must get into the nifty gritty of the transaction so as to agree on the price, quantity, condition, delivery or other issues that may crop up. It should be noted that in most circumstances, prices of the services or goods on offer are already set by sellers so concern may be directed towards other aspects of the good or service. By the end of this stage, terms and conditions of the agreement have normally been reached.
For negotiation to take place, the parties need not meet with one another as everything can be done online. Aside from that, these agreements can be reached when the parties under consideration are on transit or when they are located centrally. In other words, e commerce decentralizes business negotiations and this makes it relatively easy for various players to participate. In electronic commerce, parties must be in such a situation where they fully understand the rules governing the exchange of their commodities and this set of rules is what is commonly known as a protocol.
At the end of the EC life cycle, parties must carry out an exchange of goods or services for money. Alternatively, some sellers normally opt to carry out customer evaluation so as to boost repeat sales or they may opt to offer certain after sale services. It should be noted that the final aspect of the EC transaction must be done in such a manner that it guarantees security of the payments as well as privacy of the individual so as to minimize incidences of abuse of personal information. (Miller, 2009)
Needs analysis
Since the EC life cycle is literally completed at very low costs and in a very short time, then it is quite common to find a vast series of players operating within such environments. In this regard, consumers benefit by having a vast array of sellers to choose from. However, sellers must then think of the most feasible ways of standing out from the crowd. Therefore, sellers must offer consumers added value for their services or products. One way in which they can achieve this is by offering ample security for all the information that consumers give them. Privacy must be guaranteed at all costs and this may entail hiring or utilizing the services of software agents who can assist consumers in the process of carrying out their transactions. Authentication services as well cryptography can go a long way in assuring consumers that their transaction is secure and that their information will be rightfully protected. (Graham, 2008)
Suppliers also have the challenge of making sure that they design their protocols in such a manner that encourages them to negotiate fairly. Similarly, consumers must also embrace protocols that further this end. In negotiation, parties must try to maximize the utility function by curbing speculation as well as fraud. EC contains various levels of protocols such as the take it or leave it type. Here, sellers make one initial and final offer and consumers have the option of taking it or leaving it. Alternatively, transaction agreements can be reached through the auction system that entails placing bids by several potential consumers and then allocation of the good to the party that makes the highest bids.
In today’s cut throat e business world, it is critical for suppliers to look for protocols that are specifically designed to meet their needs. If one realizes that the kind of goods he or she is offering are in high demand and that there is a high turnover of the commodities, then perhaps the most effective method for such a person is the take it or leave it protocol. However, if the good is quite rare and there is much time before it can be obtained then an auction would be best for such a supplier. (Nissanoff, 2006)
Stakeholders in the EC cycle are often confronted with the daunting task of having to handle a huge volume of transactions while at the same time being able to understand those transactions even when they appear to be quite complex. The most effective way of dealing with such a challenge is by employing the use of agent technology. In other words, the EC cycle requires for one to possess fast responsiveness, autonomy, pro-activeness and social ability; these are al aspects that can be duly handled by agent technology. These agents have the ability to make decisions devoid of any form of control from another party thus guaranteeing autonomy. Aside from the latter, the latter agents have the ability to respond to their environments quite accurately and this therefore solves the problem of responsiveness. Agent technologies possess the ability to take initiative when necessary and they also interact with people as the latter try to complete their transactions. In other words, they possess some form of social ability. Consequently, agents possess the ability to offer suppliers and the respective consumers ample time needed to navigate the vast number of options that may be available to them through E- commerce.
Consumers must find a compromise for the quantity, quality, location, price, reputation and other factors that they require from a certain product. More often than not, this can be done through collaborative filtering or content filtering. The latter system involves looking for services or goods that have been recommended by other users who have similar traits as the respective user. The former type of filtering normally involves keyword searching and the latter is the most common form of filtering. Alternatively, information can be obtained through satisfaction constraint problems where a seller is gauged based on his ability to meet the hardest feature in his product offering. A range of software programs can be utilized to implement the latter system. (Camarinha, 2004)
As it has been stated earlier, the EC cycle differs from traditional business cycles owing to the differences in the number of stakeholders operating. Since there are so many competitors dealing in the same type of business, then suppliers must think of new business models. Virtual organizations exist in today’s business arena and more often than not provide individuals with opportunities to create alliances for the purpose of meeting temporary goals. In the end, competitors and buyers can be presented with a win-win situation if they adopt such a model. These organizations also allow the latter parties to transact without presenting any pressure on their concerned organization.
Conclusion
The Electronic life cycle has changed the speed and the way businesses are being carried out. However, a needs analysis indicates that concerns over security, privacy and negotiation of participants must be met in order to make the model work.
References
Camarinha, L. (2004). Life cycle tools in virtual enterprises. NY: Routledge
Chaudhury, A. (2003). E commerce and e business infrastructure. NY: McGraw-Hill publishers
Graham, M. (2008). The internet and economic development. Richmond law and technology journal, 2(4), 13
Miller, R. (2009). The e commerce environment. MA: Thomson learning
Nissanoff, D. (2006). The new auction culture and e commerce. London: Penguin publishers
Seynold, P. (2006). Customers.com. NJ: Crown books
Shaw, M & Schlueter, C. (2007). Strategy for e commerce development. Journal of IEEE Computing, 1(7), 20-28.