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E-COMMERCE

Electronic commerce (e-commerce) is a growing aspect of the business community. This formally is the use of digital transactions between and among businesses and individuals. More commonly e-commerce is the use of the Internet to conduct business. Initially emerging from the Electronic Data Interchange (EDI) e-commerce has gone through several major steps to get to its current point. Through these steps there has been an emergence of several subsets of ecommerce and new technologies. As a result of these changes and the growth of electronic commerce benefits and detriments have been brought to society that can be generalized to all the subsets of e-commerce. Looking at economic, privacy and social aspects of society we can see there are issues facing electronic commerce development. It is also possible to see there are some industries that e-commerce has had a greater impact on, such as the culture and information industry. Overall, electronic commerce can be a benefit to society especially if businesses adapt to their customers worries such as privacy concerns. As these problems begin to be solved and technology improves e-commerce will provide individuals with more choice and add further depth to the economy. 2] Electronic commerce, commonly known as e-commerce or eCommerce, or e-business consists of the buying and selling of products or services over electronic systems such as the Internet and other computer networks. The amount of trade conducted electronically has grown extraordinarily with widespread Internet usage. 3] Electronic commerce is sharing business information ,maintaining business relationships and conducting business transactions by means of telecommunications networks

4] E- Commerce is the division of electronic business and is the process of buying or selling over internet, much like marketing but on the internet. Initially when Tim Berners-Lee programmed the internet, e-commerce was mainly meant to do Electronic Fund Transfer (EFT) and Electronic Data Interchange (EDI). Later as the internet developed the e-commerce also had developed. And with the development of E-Commerce the Federal Trade Commission (FTC) started regulating the activities of E-Commerce. E-Commerce includes anything from buying a virtual content for instant implementation to buying goods for domestic purposes. http://earnrupees4you.com Page 2

EDI Electronic commerce has existed for over 40 years, originating from the electronic transmission of messages during the Berlin airlift in 1948.2 from this; electronic data interchange (EDI) was the next stage of e-commerce development. In the 1960s a cooperative effort between industry groups produced a first attempt at common electronic data formats. The formats, however, were only for purchasing, transportation and finance data, and were used primarily for intra-industry transactions. It was not until the late 1970s that work began for national Electronic Data Interchange (EDI) standards, which developed well into the early 1990s. EDI is the electronic transfer of a standardized business transaction between a sender and receiver computer, over some kind of private network or value added network (VAN). Both sides would have to have the same application software and the data would be exchanged in an extremely rigorous format. In sectors such as retail, automotive, defence and heavy manufacturing, EDI was developed to integrate information across larger parts of an organisations value chain from design to maintenance so that manufacturers could share information with designers, maintenance and other partners and stakeholders. From this, electronic data interchange (EDI) was the next stage of e-commerce development. In the 1960s a cooperative effort between industry groups produced a first attempt at common electronic data formats. The formats, however, were only for purchasing, transportation and finance data, and were used primarily for intra-industry transactions. It was not until the late 1970s that work began for national Electronic Data Interchange (EDI) standards, which developed well into the early 1990s. Before the widespread uptake and commercial use of the Internet, the EDI system was very expensive to run mainly because of the high cost of the private networks. Thus, uptake was limited largely to cash-rich multinational corporations using their financial strength to pressure and persuade (with subsidies) smaller suppliers to implement EDI systems, often at a very high cost. By 1996 no more than 50,000 companies in Europe and 44,000 in the USA were using EDI, representing less than 1 per cent of the total number of companies in each of the respective continents. According to Zwass, electronic commerce has been re-defined by the dynamics of the Internet and traditional e-commerce is rapidly moving to the Internet. With the advent of the Internet, the term http://earnrupees4you.com Page 3

e-commerce began to include: 1 Electronic trading of physical goods and of intangibles such as information. 2 All the steps involved in trade, such as on-line marketing, ordering payment and support for delivery. 3 The electronic provision of services such as after sales support or on-line legal advice. 4 Electronic support for collaboration between companies such as collaborative

Some of the definitions of e-commerce often heard and found in publications and the media are: 1 Electronic Commerce (EC) is where business transactions take place via telecommunications networks, especially the Internet. 2 Electronic commerce describes the buying and selling of products, services, and information via computer networks including the Internet. 3 Electronic commerce is about doing business electronically.

4 E-commerce, ecommerce, or electronic commerce is defined as the conduct of a financial transaction by electronic means

HISTORY

There have been several key steps in the history of e-commerce. The first step came from the development of the Electronic Data Interchange (EDI). EDI is a set of standards developed in the 1960s to exchange business information and do electronic transactions. At first there was several different EDI formats that business could use, so companies still might not be able to interact with each other. However, in 1984 the ASC X12 standard became stable and reliable in transferring large amounts of transactions . The next major step occurred in 1992 when the Mosaic web-browser was made available, it was the first point and click browser. The Mosaic browser was quickly adapted into a downloadable browser, Netscape, which allowed easier access to electronic commerce. The development of DSL was another key moment in the development to of e-commerce. DSL allowed quicker access and a persistent connection to the Internet. Christmas of 1998 was another major step in the development of e-commerce. AOL Page 4

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had sales of 1.2 billion over the 10 week holiday season from online sales. The development of Red Hat Linux was also another major step in electronic commerce growth. Linux gave users another choice in a platform other then Windows that was reliable and open-source. Microsoft faced with this competition needed to invest more in many things including electronic commerce. Napster was an online application used to share music files for free. This application was yet another major step in e-commerce. Many consumers used the site and were dictating what they wanted from the industry. A major merger, in early 2000, between AOL and Time Warner was another major push for electronic commerce. The merger, worth $350 million, brought together a major online company with a traditional company. In February 2000 hackers attacked some major players of e-commerce, including Yahoo, ebay and Amazon. In light of these attacks the need for improved security came to the forefront in the development of electronic commerce. It is predicted that that revenues, up until 2006, will grow 40% to 50% yearly. Expectations of higher prices as well as larger profits for e-commerce business are also present. Also, we will see a larger presence by experienced traditional companies, such as Wal-Mart, on the Internet. It is believed companies in general will take this mixed strategy of having stores online and offline in order to be successful. . Emerging Technology Original e-commerce applications were based on getting needed data to the consumer. In other words the major concern was integrating current catalogues and data into an online format from which consumers could shop. Recently though the major realization was ensuring customer satisfaction and ease of use while using an e-commerce site is very important in success. A simple and enjoyable experience is what customers are demanding and they do not want to be concerned with the technology behind it. In order to provide this experience the latest

technology being developed is based on making e-commerce shopping into a more natural interaction. One area of research into making interactions more natural is by using virtual agents. The goal of these agents is to actually converse with customers and be able to act proactively when dealing with customers. http://earnrupees4you.com These agents would appear to e-commerce clients at 2D or 3D Page 5

animations that would be capable of expressing facial emotions to try to simulate a natural environment . Other researchers in the area of virtual agents are focusing on making them informative as possible. Often consumers want to search e-commerce sites to gain further information, but this can prove frustrating at times. The virtual agents role would be to eliminate this frustration. Virtual agents would be given as much information regarding customers, products and sales processes as possible. They would then become the focal point on an e-commerce site for providing information accurately and effectively. The INTELLECT system concept is being developed for use in electronic commerce. Under this system e-commerce sites would have five modules. An e-shop would be the first module and is what the customer would see. It would be similar to current e-commerce sites for example having a catalogue and shopping baskets. The product could be viewed in 3D using the second module; the virtual reality module. In this module customers could also configure their own products choosing what components they wish to make up their product. The third module is called the configurator and would be put in place to help the administration of components and products. Customers could also use the help module that would include features such as page mirroring and video conferencing. The final module would be used as a link between the front end and the back-office system; this module is called the order-processing module. The main duty of this part of INTELLECT is to handle orders. Industries Impacted One of the major industries, according to a Statistics Canada survey, taking part in electronic commerce is the culture and information sector. Around 20% of businesses in this sector have an online e-commerce component. Following up at 17% was private sector education institutes, support services and administrations industries. Other industries that have been predicted to grow include the banking industry. By 2004 this industry is expected to have sales in the 12.4 billion US. Also, another industry that is poised for growth due to the increased bandwidth is the home entertainment sector . Very recently the online pharmacy industry has been gaining attention. Prescription drugs are generally cheaper in Canada then they are in the United States. The main reason for this is the http://earnrupees4you.com Page 6

exchange rate as well as the price is regulated in Canada. In order to take advantage of these cheaper prices some US citizens are using Canadian online pharmacies. They attain price information and order forms from these websites. Since electronic orders are not allowed the US customers fax in the required information to the online pharmacies to get their prescriptions. Economic Issues From an economic aspect there have been several advantages to electronic commerce. In

particular consumers have more suppliers, sometimes including foreign suppliers. Searching the Internet can also be done to find the lowest price. In general the market becomes larger and makes for more competition. This increased competition can bring down prices for consumers and other businesses. Further, the increase in information and choice available can help increase the efficiency of a supply and demand equilibrium. Also, with increased competition companies themselves will try to become more efficient. This may be by new technologies or methods that reduce costs and increase productivity. In turn from this lower prices may occur or the emergence of new technology . Electronic commerce does have some negative effects on the economy. The availability of goods online should increase competition and in turn lower prices, but this does not always occur. A good reputation may allow a retailer to hold some control over their area of the market. Further, companies can also find with ease the prices of their competitors allowing them to react immediately to changes. In the worst-case scenario this monitoring may not involve any changes to price. A price that is not advantageous to the consumer may be kept because no company is willing to lower their price because it would not be profitable. That is, a company may be willing to lower their price because the increase in sales would offset the lower price. However, since other companies can quickly change their price the original company would not make any extra revenue from increased sales . Also the increased competition may cause product differentiation. This involves making similar products that have the same general purpose, but are still unique. In this situation consumers will have a difficult time comparing different products. As a result of the minimal information competition will not be as high and prices may not be lower.

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Social Issues As electronic commerce expands it has a greater social impact. In order for the expansion of ecommerce to occur there will be a need to improve education about the business side of ecommerce and the technical side. As rapidly as e-commerce is growing changes are inevitable and in order to deal with these changes people will have to have education available. Traditional educational institutes will have to adapt to try and provide experience for the e-commerce market and information technology in general. Also, there already been expansion of learning about ecommerce into other forms of education rather then through traditional institutes. Institutes solely based on learning information technology, including e-commerce, have been opened and in addition to this online training can also be found. The health sector of society can also be affected by the development of e-commerce. Electronic commerce applications can be developed for use by the health care systems. In some cases the use of these e-commerce sites can be help the system work more efficiently in turn be more cost effective. By reducing costs using these methods more money can be made available to other areas of the health sector. Another aspect of society that is affected by electronic commerce is the sense of community. Consumers can now belong to a more global community by being able to buy goods from around the world, however this has its own societal effects. There is a loss of direct physical interaction between individuals. Also the sense of loyalty that can occur during traditional business can be harder to develop due to the global aspect and the lack of physical interaction of e-commerce. Companies have to deal with an entire global market and can face difficulties in maintaining a focus on specific customers to gain loyalty. There are also concerns that traditional businesses may begin to suffer significantly is electronic commerce continues to grow. As well, e-commerce plays a part increasing use and improving computer technology that can be used by society. Electronic commerce can help the expansion of computer technology to more people. As more people begin to use e-commerce more companies will begin to take part. This will lead to better infrastructure and easier access to the Internet in order to encourage an even larger market. By expanding like this it will not only help companies make more profit, but it should make the resources of the Internet easier to attain to more people in society. Again, as http://earnrupees4you.com Page 8

companies look better methods to expand their online-businesses new technologies may be developed. These new technologies may not only help e-commerce, but may be useful in other parts of society as well. Overall Effects Electronic commerce provides a different way of doing business that comes with its own set of benefits. The market size increases greatly to encompass the whole globe. This provides business with more customers and customers more choice. More mass customization can also be achieved. It become easier through e-commerce for the customer to tell a business exactly what they require and individualize products or services. Also, electronic commerce allows the

supply chain to be shortened; products can sometime be shipped directly from the manufacturer to the customer. Other areas where businesses may benefit occur because transactions are cheaper. This is the case where in a traditional business they would have to pay for labour to complete the transaction, but by making the transaction electronic there is minimal labour cost. These are a few examples of some general benefits of electronic commerce . Even though there are benefits to both consumers and businesses there are still issues limiting electronic commerce effectiveness. These issues have to deal with the problems related to privacy. There is a general lack of trust in what is happening to customers information and the security of their data. Increasing consumer confidence in e-commerce is one of the biggest challenges facing this form of business. Companies have to prove they can be loyal and

trustworthy to their customers. We can see the importance of these qualities by seeing that some of the most profitable e-commerce companies are those that also have traditional stores. These companies already have a strong customer base that is confident in them and helps make it easier for consumers to trust their online stores. Conclusion Electronic commerce may be a new form of doing business, but it has developed rapidly. Even though e-commerce has a short history there have been several important turning points in its development. Further, as progress took place more markets opened up for the use of electronic commerce. It became apparent it could be used more then just for Consumer-to-Consumer, but also for other markets such as Business-to-Business. Current research in e-commerce is focusing http://earnrupees4you.com Page 9

on making the experience more natural and comfortable for the customer, through such technology as virtual agents. As with other forms of business, e-commerce has impacted some industries more then others, such as the culture and information sector. Other industries, like banking, have the potential for large future growth via electronic commerce. As this growth continues this type of business has to face social, economic and privacy issues. In each of these aspects of society we can see areas that e-commerce is being successful, but there are also areas for improvement. A major are of concern is the issue of privacy. Consumers are hesitant to use online business because they often have limited guarantees about the privacy of their information. If concerns like these can be reduced, electronic commerce can play a positive role in helping improve the world of business. E-commerce is can be further categorized into the following:

Business -to -Business (B2B) Business- to- Customer (B2C) Consumer-to-Business (C2B ) Consumer- to -consumer (C2C)

Business to business is one in which a company deals with another company for business and exchanging of goods, products, services. Some of the examples of b2b e-commerce sites are a company's official site, brokering sites etc. Business to customer------ is one where the company sells its goods to the customer or trades with the customers. This is electronic retailing and called as e-tailing in common. One of the best example is amazon.com Consumer to business is when a customer works for a certain company for business and the company buys it, here the consumer has to price the trade. Example for such a site is priceline.com Consumer to consumer is more like auctioning, bartending, etc... where a consumer places bid and other buys it. Here the websites acts an intermediate for the business Example for such sites is eBay. http://earnrupees4you.com Page 10

B2B(Business-to-Business) Companies doing business with each other such as manufacturers selling to distributors and wholesalers selling to retailers. Pricing is based on quantity of order and is often negotiable. B2C(Business-to-Consumer) Businesses selling to the general public typically through catalogs utilizing shopping cart software. By dollar volume, B2B takes the prize, however B2C is really what the average Joe has in mind with regards to ecommerce as a whole.

C2B(Consumer-to-Business) A consumer posts his project with a set budget online and within hours companies review the consumer's requirements and bid on the project. The consumer reviews the bids and selects the company that will complete the project. Elance empowers consumers around the world by providing the meeting ground and platform for such transactions. C2C(Consumer-to-Consumer) There are many sites offering free classifieds, auctions, and forums where individuals can buy and sell thanks to online payment systems like PayPal where people can send and receive money online with ease. eBay's auction service is a great example of where person-to-person transactions take place everyday since. Companies using internal networks to offer their employees products and services online--not necessarily online on the Web--are engaging in B2E (Business-to-Employee) ecommerce.

G2G (Government-to-Government), G2E (Government-to-Employee), G2B (Government-toBusiness), B2G (Business-to-Government), G2C (Government-to-Citizen), C2G (Citizen-toGovernment) are other forms of ecommerce that involve transactions with the government--from procurement to filing taxes to business registrations to renewing licenses. There are other categories of ecommerce out there, but they tend to be superfluous. Value chain

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A value chain is a chain of activities for a firm operating in a specific industry. The business unit is the appropriate level for construction of a value chain, not the divisional level or corporate level. Products pass through all activities of the chain in order, and at each activity the product gains some value. The chain of activities gives the products more added value than the sum of added values of all activities. It is important not to mix the concept of the value chain with the costs occurring throughout the activities. A diamond cutter can be used as an example of the difference. The cutting activity may have a low cost, but the activity adds much of the value to the end product, since a rough diamond is significantly less valuable than a cut diamond.

Activities The value chain categorizes the generic value-adding activities of an organization. The "primary activities" include: inbound logistics, operations (production), outbound logistics, marketing and sales (demand), and services (maintenance). The "support activities" include: administrative infrastructure management, human resource management, technology (R&D), and procurement. The costs and value drivers are identified for each value activity. Significance The value-chain concept has been extended beyond individual firms. It can apply to whole supply chains and distribution networks. The delivery of a mix of products and services to the end customer will mobilize different economic factors, each managing its own value chain. The industry wide synchronized interactions of those local value chains create an extended value chain, sometimes global in extent. Porter terms this larger interconnected system of value chains the "value system." A value system includes the value chains of a firm's supplier (and their suppliers all the way back), the firm itself, the firm distribution channels, and the firm's buyers (and presumably extended to the buyers of their products, and so on). Capturing the value generated along the chain is the new approach taken by many management strategists. For example, a manufacturer might require its parts suppliers to be located nearby its http://earnrupees4you.com Page 12

assembly plant to minimize the cost of transportation. Value chain analysis has also been successfully used in large Petrochemical Plant Maintenance Organizations to show how Work Selection, Work Planning, Work Scheduling and finally Work Execution can (when considered as elements of chains) help drive Lean approaches to Maintenance. The Maintenance Value Chain approach is particularly successful when used as a tool for helping Change Management as it is seen as more user friendly than other business process tools. Value chain analysis has also been employed in the development sector as a means of identifying poverty reduction strategies by upgrading along the value chain [4]. Value Reference Model A Value Reference Model (VRM) developed by the global not-for-profit Value Chain Group offers an open source semantic dictionary for value chain management encompassing one unified reference framework representing the process domains of product development, customer relations and supply networks. The integrated process framework guides the modeling, design, and measurement of business performance by uniquely encompassing the plan, govern and execute requirements for the design, product, and customer aspects of business. The Value Chain Group claims VRM to be next generation Business Process Management that enables value reference modeling of all business processes and provides product excellence, operations excellence, and customer excellence. Six business functions of the Value Chain: Research and Development Design of Products, Services, or Processes Production Marketing & Sales http://earnrupees4you.com Page 13

 Distribution Customer Service Advantages and disadvantages of e commerce Like any conventional business, electronic commerce is also characterized by some advantages and inherent drawbacks. Let's have a look at some of these important advantages and disadvantages of electronic commerce.

The greatest and the most important advantage of e-commerce, is that it enables a business concern or individual to reach the global market. It caters to the demands of both the national and the international market, as your business activities are no longer restricted by geographical boundaries. With the help of electronic commerce, even small enterprises can access the global market for selling and purchasing products and services. Even time restrictions are nonexistent while conducting businesses, as e-commerce empowers one to execute business transactions 24 hours a day and even on holidays and weekends. This in turn significantly increases sales and profit.

Electronic commerce gives the customers the opportunity to look for cheaper and quality products. With the help of e-commerce, consumers can easily research on a specific product and sometimes even find out the original manufacturer to purchase a product at a much cheaper price than that charged by the wholesaler. Shopping online is usually more convenient and time saving than conventional shopping. Besides these, people also come across reviews posted by other customers, about the products purchased from a particular e-commerce site, which can help make purchasing decisions.

For business concerns, e-commerce significantly cuts down the cost associated with marketing, customer care, processing, information storage and inventory management. It reduces the time period involved with business process re-engineering, customization of products to meet the demand of particular customers, increasing productivity and customer care services. Electronic commerce reduces the burden of infrastructure to conduct businesses and thereby raises the amount of funds available for profitable investment. It also enables efficient customer care http://earnrupees4you.com Page 14

services. On the other hand, It collects and manages information related to customer behavior, which in turn helps develop and adopt an efficient marketing and promotional strategy.

Disadvantages Electronic commerce is also characterized by some technological and inherent limitations which has restricted the number of people using this revolutionary system. One important disadvantage of e-commerce is that the Internet has still not touched the lives of a great number of people, either due to the lack of knowledge or trust. A large number of people do not use the Internet for any kind of financial transaction. Some people simply refuse to trust the authenticity of completely impersonal business transactions, as in the case of e-commerce. Many people have reservations regarding the requirement to disclose personal and private information for security concerns. Many times, the legitimacy and authenticity of different e-commerce sites have also been questioned.

Another limitation of e-commerce is that it is not suitable for perishable commodities like food items. People prefer to shop in the conventional way than to use e-commerce for purchasing food products. So e-commerce is not suitable for such business sectors. The time period required for delivering physical products can also be quite significant in case of e-commerce. A lot of phone calls and e-mails may be required till you get your desired products. However, returning the product and getting a refund can be even more troublesome and time consuming than purchasing, in case if you are not satisfied with a particular product.

Thus, on evaluating the various pros and cons of electronic commerce, we can say that the advantages of e-commerce have the potential to outweigh the disadvantages. A proper strategy to address the technical issues and to build up customers trust in the system, can change the present scenario and help e-commerce adapt to the changing needs of the world.

Value Chain

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useful to model the firm as a chain of value-creating activities. Michael Porter identified a set of interrelated generic activities common to a wide range of firms. The resulting model is known as the value chain and is depicted below:

Primary Value Chain Activities Inbound Logistics > Operations > Outbound Logistics > Marketing & Sales > Service

The goal of these activities is to create value that exceeds the cost of providing the product or service, thus generating a profit margin. Inbound logistics include the receiving, warehousing, and inventory control of input materials. Operations are the value-creating activities that transform the inputs into the final product. Outbound logistics are the activities required to get the finished product to the customer, including warehousing, order fulfillment, etc. Marketing & Sales are those activities associated with getting buyers to purchase the http://earnrupees4you.com Page 16

product, including channel selection, advertising, pricing, etc. Service activities are those that maintain and enhance the product's value including customer support, repair services, etc. Any or all of these primary activities may be vital in developing a competitive advantage. For example, logistics activities are critical for a provider of distribution services, and service activities may be the key focus for a firm offering on-site maintenance contracts for office equipment. These five categories are generic and portrayed here in a general manner. Each generic activity includes specific activities that vary by industry.

Support Activities The primary value chain activities described above are facilitated by support activities. Porter identified four generic categories of support activities, the details of which are industry-specific. Procurement - the function of purchasing the raw materials and other inputs used in the value-creating activities. Technology Development - includes research and development, process automation, and other technology development used to support the value-chain activities. Human Resource Management - the activities associated with recruiting, development, and compensation of employees. Firm Infrastructure - includes activities such as finance, legal, quality management, etc. Support activities often are viewed as "overhead", but some firms successfully have used them to develop a competitive advantage, for example, to develop a cost advantage through innovative management of information systems.

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Value Chain Analysis In order to better understand the activities leading to a competitive advantage, one can begin with the generic value chain and then identify the relevant firm-specific activities. Process flows can be mapped, and these flows used to isolate the individual value-creating activities. Once the discrete activities are defined, linkages between activities should be identified. A linkage exists if the performance or cost of one activity affects that of another. Competitive advantage may be obtained by optimizing and coordinating linked activities. The value chain also is useful in outsourcing decisions. Understanding the linkages between activities can lead to more optimal make-or-buy decisions that can result in either a cost advantage or a differentiation advantage. The Value System The firm's value chain links to the value chains of upstream suppliers and downstream buyers. The result is a larger stream of activities known as the value system. The development of a competitive advantage depends not only on the firm-specific value chain, but also on the value system of which the firm is a part. Supply chain A supply chain is a system of organizations, people, technology, activities, information and resources involved in moving a product or service from supplier to customer. Supply chain activities transform natural resources, raw materials and components into a finished product that is delivered to the end customer. In sophisticated supply chain systems, used products may reenter the supply chain at any point where residual value is recyclable. Supply chains link value chains.

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Overview The Council of Supply Chain Management Professionals (CSCMP) defines Supply Chain Management as follows: Supply Chain Management encompasses the planning and management of all activities involved in sourcing and procurement, conversion, and all logistics management activities. Importantly, it also includes coordination and collaboration with channel partners, which can be suppliers, intermediaries, third-party service providers, and customers. In essence, supply chain management integrates supply and demand management within and across companies. Supply Chain Management is an integrating function with primary responsibility for linking major business functions and business processes within and across companies into a cohesive and high-performing business model. A typical supply chain begins with ecological and biological regulation of natural resources, followed by the human extraction of raw material, and includes several production links (e.g., component construction, assembly, and merging) before moving on to several layers of storage facilities of ever-decreasing size and ever more remote geographical locations, and finally reaching the consumer. Many of the exchanges encountered in the supply chain will therefore be between different companies that will seek to maximize their revenue within their sphere of interest, but may have little or no knowledge or interest in the remaining players in the supply chain. More recently, the loosely coupled, self-organizing network of businesses that cooperates to provide product and service offerings has been called the Extended Enterprise]

Supply chain modeling

A diagram of a supply chain. The black arrow represents the flow of materials and information http://earnrupees4you.com Page 19

and the gray arrow represents the flow of information and backhauls. The elements are (a) the initial supplier, (b) a supplier, (c) a manufacturer, (d) a customer, (e) the final customer. There are a variety of supply chain models, which address both the upstream and downstream sides. However the SCOR model is most common. The SCOR Supply-Chain Operations Reference model, developed by the Supply Chain Council, measures total supply chain performance. It includes delivery and order fulfillment performance, production flexibility, warranty and returns processing costs, inventory and asset turns, and other factors in evaluating the overall effective performance of a supply chain. The Global Supply Chain Forum (GSCF) introduced another Supply Chain Model. This framework is built on eight key business processes that are both cross-functional and cross-firm in nature. Each process is managed by a cross-functional team, including representatives from logistics, production, purchasing, finance, marketing and research and development. While each process will interface with key customers and suppliers, the customer relationship management and supplier relationship management processes form the critical linkages in the supply chain.

Supply chain management In the 1980s, the term Supply Chain Management (SCM) was developed to express the need to integrate the key business processes, from end user through original suppliers. Original suppliers being those that provide products, services and information that add value for customers and other stakeholders. The basic idea behind the SCM is that companies and corporations involve themselves in a supply chain by exchanging information regarding market fluctuations and production capabilities. If all relevant information is accessible to any relevant company, every company in the supply chain has the possibility to and can seek to help optimizing the entire supply chain rather than sub optimize based on a local interest. This will lead to better planned overall production and distribution which can cut costs and give a more attractive final product leading to better sales and better overall results for the companies involved. http://earnrupees4you.com Page 20

Incorporating SCM successfully leads to a new kind of competition on the global market where competition is no longer of the company versus company form but rather takes on a supply chain versus supply chain form. The primary objective of supply chain management is to fulfill customer demands through the most efficient use of resources, including distribution capacity, inventory and labor. In theory, a supply chain seeks to match demand with supply and do so with the minimal inventory. There is often confusion over the terms supply chain and logistics. It is now generally accepted that the term Logistics applies to activities within one company/organization involving distribution of product whereas the term supply chain also encompasses manufacturing and procurement and therefore has a much broader focus as it involves multiple enterprises, including suppliers, manufacturers and retailers, working together to meet a customer need for a product or service. There are actually four common Supply Chain Models. Besides the two mentioned above, there are the American Productivity & Quality Center's (APQC) Process Classification Framework and the Supply Chain Best Practices Framework. An unusual food supply chain operated by illiterate Dabbawalas in Mumbai is noted for being extremely reliable without using any computers or modern technology. It has been verified to be a six sigma supply chain, meaning they make less than 3.4 mistakes per million deliveries.

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UNIT-2
Credit card A credit card is a small plastic card issued to users as a system of payment. It allows its holder to buy goods and services based on the holder's promise to pay for these goods and services. The issuer of the card grants a line of credit to the consumer (or the user) from which the user can borrow money for payment to a merchant or as a cash advance to the use. A credit card is different from a charge card: a charge card requires the balance to be paid in full each month. In contrast, credit cards allow the consumers a continuing balance of debt, subject to interest being charged. Most credit cards are issued by banks or credit unions, and are the shape and size specified by the ISO/IEC 7810 standard as ID-1. This is defined as 85.60 53.98 mm (3.370 2.125 in) (33/8 21/8 in) in size. How credit cards work Credit cards are issued after an account has been approved by the credit provider, after which cardholders can use it to make purchases at merchants accepting that card. Merchants often advertise which cards they accept by displaying acceptance marks generally derived from logos or may communicate this orally, as in "Credit cards are fine" (implicitly meaning "major brands"), "We take (brands X, Y, and Z)", or "We don't take credit cards". When a purchase is made, the credit card user agrees to pay the card issuer. The cardholder indicates consent to pay by signing a receipt with a record of the card details and indicating the amount to be paid or by entering a personal identification number (PIN). Also, many merchants now accept verbal authorizations via telephone and electronic authorization using the Internet, known as a card not present transaction (CNP). Electronic verification systems allow merchants to verify in a few seconds that the card is valid and the credit card customer has sufficient credit to cover the purchase, allowing the verification to happen at time of purchase. The verification is performed using a credit card payment terminal or point-of-sale (POS) system with a communications link to the merchant's acquiring bank. Data from the card is obtained from a magnetic stripe or chip on the card; the latter system is called Chip and PIN in the United Kingdom and Ireland, and is implemented as an EMV card. For card not present transactions where the card is not shown (e.g., e-commerce, mail order, and telephone sales), merchants additionally verify that the customer is in physical possession of the card and is the authorised user by asking for additional information such as the security code printed on the back of the card, date of expiry, and billing address. Each month, the credit card user is sent a statement indicating the purchases undertaken with the card, any outstanding fees, and the total amount owed. After receiving the statement, the cardholder may dispute any charges that he or she thinks are incorrect. Otherwise, the cardholder must pay a defined minimum proportion of the bill by a due date, or may choose to pay a higher amount up to the entire amount owed. The credit issuer charges interest on the amount owed if the balance is not paid in full. Some financial institutions can arrange for automatic payments to be deducted from the user's bank accounts, thus avoiding late payment altogether as long as the http://earnrupees4you.com Page 22

cardholder has sufficient funds. Benefits to customers The main benefit to each customer is convenience. Compared to debit cards and cheques, a credit card allows small short-term loans to be quickly made to a customer who need not calculate a balance remaining before every transaction, provided the total charges do not exceed the maximum credit line for the card. Credit cards also provide more fraud protection than debit cards. In the UK for example, the bank is jointly liable with the merchant for purchases of defective products over 100.[2] Many credit cards offer rewards and benefits packages, such as offering enhanced product warranties at no cost, free loss/damage coverage on new purchases, and points which may be redeemed for cash, products, or airline tickets. Additionally, carrying a credit card may be a convenience to some customers as it eliminates the need to carry any cash for most purposes. Detriments to customers 1]High interest and bankruptcy Low introductory credit card rates are limited to a fixed term, usually between 6 and 12 months, after which a higher rate is charged. As all credit cards charge fees and interest, some customers become so indebted to their credit card provider that they are driven to bankruptcy. Some credit cards often levy a rate of 20 to 30 percent after a payment is missed; in other cases a fixed charge is levied without change to the interest rate. 2] Inflated pricing for all consumers Merchants that accept credit cards must pay interchange fees and discount fees on all credit-card transactions.[3][4] In some cases merchants are barred by their credit agreements from passing these fees directly to credit card customers, or from setting a minimum transaction amount. [5] Grace period A credit card's grace period is the time the customer has to pay the balance before interest is assessed on the outstanding balance. Grace periods vary, but usually range from 20 to 50 days depending on the type of credit card and the issuing bank. Usually, if a customer is late paying the balance, finance charges will be calculated and the grace period does not apply. Finance charges incurred depend on the grace period and balance; with most credit cards there is no grace period if there is any outstanding balance from the previous billing cycle or statement (i.e. interest is applied on both the previous balance and new transactions). However, there are some credit cards that will only apply finance charge on the previous or old balance, excluding new transactions Benefits to merchants An example of street markets accepting credit cards. Most simply display the acceptance marks (stylized logos, shown in the upper-left corner of the sign) of all the cards they accept. http://earnrupees4you.com Page 23

For merchants, a credit card transaction is often more secure than other forms of payment, such as checks, because the issuing bank commits to pay the merchant the moment the transaction is authorized, regardless of whether the consumer defaults on the credit card payment. In most cases, cards are even more secure than cash, because they discourage theft by the merchant's employees and reduce the amount of cash on the premises. Prior to credit cards, each merchant had to evaluate each customer's credit history before extending credit. That task is now performed by the banks which assume the credit risk. Credit cards can also aid in securing a sale, especially if the customer does not have enough cash on his or her person or checking account. Extra turnover is generated by the fact that the customer can purchase goods and/or services immediately and is less inhibited by the amount of cash in his or her pocket and the immediate state of his or her bank balance. For each purchase, the bank charges the merchant a commission (discount fee) for this service and there may be a certain delay before the agreed payment is received by the merchant. The commission is often a percentage of the transaction amount, plus a fixed fee (interchange rate). In addition, a merchant may be penalized or have their ability to receive payment using that credit card restricted if there are too many cancellations or reversals of charges as a result of disputes. In some countries, for example the Nordic countries, banks guarantee payment on stolen cards only if an ID card is checked and the ID card number/civic registration number is written down on the receipt together with the signature. In these countries merchants therefore usually ask for ID. Non-Nordic citizens, who are unlikely to possess a Nordic ID card or driving license, will instead have to show their passport, and the passport number will be written down on the receipt, sometimes together with other information. Some shops use the card's PIN for identification, and in that case showing an ID card is not necessary. Costs to merchants Merchants are charged several fees for the privilege of accepting credit cards. The merchant is usually charged a commission of 1%-3%+ of the value of each transaction paid for by credit card. The merchant may also pay a variable charge, called an interchange rate, for each transaction.[3] In some instances of very low-value transactions, use of credit cards will significantly reduce the profit margin or cause the merchant to lose money on the transaction. In certain countries, merchants are required to pay the acquiring banks a monthly terminal rental fee, if the terminals are provided by the acquiring banks. Merchants can apply to the acquiring banks for waivers of the fees, which the banks usually agree to for merchants with a high volume of sales, but not for smaller ones. Parties involved Cardholder: The holder of the card used to make a purchase; the consumer. Card-issuing bank: The financial institution or other organization that issued the credit card to the cardholder.This bank bills the consumer for repayment and bears the risk that the card is used fraudulently Cards issued by banks to cardholders in a different country http://earnrupees4you.com Page 24

are known as offshore credit cards. Merchant: The individual or business accepting credit card payments for products or services sold to the cardholder. Acquiring bank: The financial institution accepting payment for the products or services on behalf of the merchant. Independent sales organization: Resellers (to merchants) of the services of the acquiring bank. Merchant account: This could refer to the acquiring bank or the independent sales organization, but in general is the organization that the merchant deals with. Credit Card association: An association of card-issuing banks such as Visa, MasterCard, Discover, American Express, etc. that set transaction terms for merchants, card-issuing banks, and acquiring banks. Transaction network: The system that implements the mechanics of the electronic transactions. May be operated by an independent company, and one company may operate multiple networks. Affinity partner: Some institutions lend their names to an issuer to attract customers that have a strong relationship with that institution, and get paid a fee or a percentage of the balance for each card issued using their name. Examples of typical affinity partners are sports teams, universities, charities, professional organizations, and major retailers. Transaction steps Authorization: The cardholder pays for the purchase and the merchant submits the transaction to the acquirer (acquiring bank). The acquirer verifies the credit card number, the transaction type and the amount with the issuer (Card-issuing bank) and reserves that amount of the cardholder's credit limit for the merchant. An authorization will generate an approval code, which the merchant stores with the transaction. Batching: Authorized transactions are stored in "batches", which are sent to the acquirer. Batches are typically submitted once per day at the end of the business day. If a transaction is not submitted in the batch, the authorization will stay valid for a period determined by the issuer, after which the held amount will be returned back to the cardholder's available credit. Clearing and Settlement: The acquirer sends the batch transactions through the credit card association, which debits the issuers for payment and credits the acquirer. Essentially, the issuer pays the acquirer for the transaction. Funding: Once the acquirer has been paid, the acquirer pays the merchant. The merchant receives the amount totaling the funds in the batch minus either the "discount rate," "midqualified rate", or "non-qualified rate" which are tiers of fees the merchant pays the acquirer for processing the transactions. http://earnrupees4you.com Page 25

 Chargebacks: A chargeback is an event in which money in a merchant account is held due to a dispute relating to the transaction. Chargebacks are typically initiated by the cardholder. In the event of a chargeback, the issuer returns the transaction to the acquirer for resolution. Types of Credit Card Secured credit cards A secured credit card is a type of credit card secured by a deposit account owned by the cardholder. Typically, the cardholder must deposit between 100% and 200% of the total amount of credit desired. Thus if the cardholder puts down $1000, they will be given credit in the range of $500$1000. In these cases, the deposit required may be significantly less than the required credit limit, and can be as low as 10% of the desired credit limit. This deposit is held in a special savings account. The cardholder of a secured credit card is still expected to make regular payments, as with a regular credit card, but should they default on a payment, the card issuer has the option of recovering the cost of the purchases paid to the merchants out of the deposit. The advantage of the secured card for an individual with negative or no credit history is that most companies report regularly to the major credit bureaus. This allows for building of positive credit history. Although the deposit is in the hands of the credit card issuer as security in the event of default by the consumer, the deposit will not be debited simply for missing one or two payments. Usually the deposit is only used as an offset when the account is closed, either at the request of the customer or due to severe delinquency (150 to 180 days). This means that an account which is less than 150 days delinquent will continue to accrue interest and fees, and could result in a balance which is much higher than the actual credit limit on the card. In these cases the total debt may far exceed the original deposit and the cardholder not only forfeits their deposit but is left with an additional debt. Most of these conditions are usually described in a cardholder agreement which the cardholder signs when their account is opened. Secured credit cards are an option to allow a person with a poor credit history or no credit history to have a credit card which might not otherwise be available. They are often offered as a means of rebuilding one's credit. Fees and service charges for secured credit cards often exceed those charged for ordinary non-secured credit cards., secured cards can often be less expensive in total cost than unsecured credit cards, even including the security deposit. Prepaid "credit" cards A prepaid credit card is not a true credit card, since no credit is offered by the card issuer: the card-holder spends money which has been "stored" via a prior deposit by the card-holder or someone else, such as a parent or employer. However, it carries a credit-card brand (such as Visa, MasterCard, American Express, Discover, or JCB) and can be used in similar ways just as http://earnrupees4you.com Page 26

though it were a regular credit card. Unlike debit cards, prepaid credit cards do not require a PIN. After purchasing the card, the cardholder loads the account with any amount of money, up to the predetermined card limit and then uses the card to make purchases the same way as a typical credit card. Prepaid cards can be issued to minors (above 13) since there is no credit line involved. The main advantage over secured credit cards is that you are not required to come up with $500 or more to open an account. With prepaid credit cards purchasers not charged any interest but are often charged a purchasing fee plus monthly fees after an arbitrary time period. Many other fees also usually apply to a prepaid card. Prepaid credit cards are sometimes marketed to teenagers for shopping online without having their parents complete the transaction. Because of the many fees that apply to obtaining and using credit-card-branded prepaid cards, the Financial Consumer Agency of Canada describes them as "an expensive way to spend your own money". Costs Credit card issuers (banks) have several types of costs: Interest expenses Banks generally borrow the money they then lend to their customers. As they receive very lowinterest loans from other firms, they may borrow as much as their customers require, while lending their capital to other borrowers at higher rates. If the card issuer charges 15% on money lent to users, and it costs 5% to borrow the money to lend, and the balance sits with the cardholder for a year, the issuer earns 10% on the loan. This 10% difference is the "net interest spread" and the 5% is the "interest expense". Operating costs This is the cost of running the credit card portfolio, including everything from paying the executives who run the company to printing the plastics, to mailing the statements, to running the computers that keep track of every cardholder's balance, to taking the many phone calls which cardholders place to their issuer, to protecting the customers from fraud rings. Charge offs When a consumer becomes severely delinquent on a debt (often at the point of six months without payment), the creditor may declare the debt to be a charge-off. A charge-off is considered to be "written off as uncollectable." To banks, bad debts and even fraud are simply part of the cost of doing business.

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Rewards Many credit card customers receive rewards, such as frequent flyer points, gift certificates, or cash back as an incentive to use the card. Rewards are generally tied to purchasing an item or service on the card, which may or may not include balance transfers, cash advances, or other special uses. Fraud When a card is stolen, or an unauthorized duplicate made, most card issuers will refund some or all of the charges that the customer has received for things they did not buy. These refunds will, in some cases, be at the expense of the merchant, especially in mail order cases where the merchant cannot claim sight of the card. In several countries, merchants will lose the money if no ID card was asked for, therefore merchants usually require ID card in these countries. Credit card companies generally guarantee the merchant will be paid on legitimate transactions regardless of whether the consumer pays their credit card bill. Most banking services have their own credit card services that handle fraud cases and monitor for any possible attempt at fraud. Employees that are specialized in doing fraud monitoring and investigation are often placed in Risk Management, Fraud and Authorization, or Cards and Unsecured Business. Fraud monitoring emphasizes minimizing fraud losses while making an attempt to track down those responsible and contain the situation. Credit card fraud is a major white collar crime that has been around for many decades, even with the advent of the chip based card (EMV) that was put into practice in some countries to prevent cases such as these. Even with the implementation of such measures, credit card fraud continues to be a problem. Promotion Promotional purchase is any purchase on which separate terms and conditions are set on each individual transaction unlike a standard purchase where the terms are set on the cardholders account record and their pricing strategy. All promotional purchases that post to a particular account will be carrying its own balance called as Promotional Balance. 2 Debit card

A debit card (also known as a bank card or check card) is a plastic card that provides an alternative payment method to cash when making purchases. Functionally, it can be called an electronic cheque, as the funds are withdrawn directly from either the bank account, or from the remaining balance on the card. In some cases, the cards are designed exclusively for use on the Internet, and so there is no physical card. In many countries the use of debit cards has become so widespread that their volume of use has overtaken the cheque and, in some instances, cash transactions. Like credit cards, debit cards are used widely for telephone and Internet purchases and, unlike credit cards, the funds are transferred immediately from the bearer's bank account instead of having the bearer pay back the money at a later date. Debit cards may also allow for instant withdrawal of cash, acting as the ATM card for withdrawing cash and as a cheque guarantee card. Merchants may also offer cashback facilities http://earnrupees4you.com Page 28

to customers, where a customer can withdraw cash along with their purchase. Types of debit card systems There are currently three ways that debit card transactions are processed: online debit (also known as PIN debit), offline debit (also known as signature debit) Electronic Purse Card System.

It should be noted that one physical card can include the functions of an online debit card, an offline debit card and an electronic purse card. Although many debit cards are of the Visa or MasterCard brand, there are many other types of debit card, each accepted only within a particular country or region, for example Switch (now: Maestro) and Solo in the United Kingdom, Interac in Canada, Carte Bleue in France, Laser in Ireland, "EC electronic cash"in Germany and EFTPOS cards in Australia and New Zealand. The need for cross-border compatibility and the advent of the euro recently led to many of these card networks being re-branded with the internationally recognised Maestro logo, which is part of the MasterCard brand. Some debit cards are dual branded with the logo of the (former) national card as well as Maestro (e.g. EC cards in Germany, Laser cards in Ireland, Switch and Solo in the UK, Pinpas cards in the Netherlands, Bancontact cards in Belgium, etc.). Online Debit System

Online debit cards require electronic authorization of every transaction and the debits are reflected in the users account immediately. The transaction may be additionally secured with the personal identification number (PIN) authentication system and some online cards require such authentication for every transaction, essentially becoming enhanced automatic teller machine (ATM) cards. One difficulty in using online debit cards is the necessity of an electronic authorization device at the point of sale (POS) and sometimes also a separate PINpad to enter the PIN, although this is becoming commonplace for all card transactions in many countries. Overall, the online debit card is generally viewed as superior to the offline debit card because of its more secure authentication system and live status, which alleviates problems with processing lag on transactions that may only issue online debit cards. Some on-line debit systems are using the normal authentication processes of Internet banking to provide real-time on-line debit transactions. The most notable of these are Ideal and POLi.

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Offline Debit System Offline debit cards have the logos of major credit cards (e.g. Visa or MasterCard) or major debit cards (e.g. Maestro in the United Kingdom and other countries, but not the United States) and are used at the point of sale like a credit card (with payer's signature). This type of debit card may be subject to a daily limit, and/or a maximum limit equal to the current/checking account balance from which it draws funds. [edit] Electronic Purse Card System Smart-card-based electronic purse systems (in which value is stored on the card chip, not in an externally recorded account, so that machines accepting the card need no network connectivity) are in use throughout Europe since the mid-1990s, most notably in Germany (Geldkarte), Austria (Quick) Switzerland (CASH). In Austria and Germany, all current bank cards now include electronic purses. Prepaid Debit Card Prepaid debit cards, also called reloadable debit cards or reloadable prepaid cards, are often used for recurring payments. The payer loads funds to the cardholder's card account. Prepaid debit cards use either the offline debit system or the online debit system to access these funds. Particularly for companies with a large number of payment recipients abroad, prepaid debit cards allow the delivery of international payments without the delays and fees associated with international checks and bank transfers. Providers include Caxton FX prepaid cards, Escape prepaid cards and Travelex prepaid cards. Advantages and Disadvantages Debit and check cards, as they have become widespread, have revealed numerous advantages and disadvantages to the consumer and retailer alike. Advantages are as follows: A consumer who is not credit worthy and may find it difficult or impossible to obtain a credit card can more easily obtain a debit card, allowing him/her to make plastic transactions. For most transactions, a check card can be used to avoid check writing altogether. Check cards debit funds from the user's account on the spot, thereby finalizing the transaction at the time of purchase Like credit cards, debit cards are accepted by merchants with less identification and scrutiny than personal checks, thereby making transactions quicker and less intrusive. Unlike a credit card, which charges higher fees and interest rates when a cash advance is obtained, a debit card may be used to obtain cash from an ATM or a PIN-based transaction at no extra charge, other than a foreign ATM fee. The Debit card has many disadvantages as opposed to cash or credit: http://earnrupees4you.com Page 30

 Use of a debit card is not usually limited to the existing funds in the account to which it is linked, most banks allow a certain threshold over the available bank balance which can cause overdraft fees if the customer does not depend on their own records of spending. Many banks are now charging over-limit fees or non-sufficient funds fees based upon pre-authorizations, and even attempted but refused transactions by the merchant (some of which may not even be known by the client). Many merchants mistakenly believe that amounts owed can be "taken" from a customer's account after a debit card (or number) has been presented, without agreement as to date, payee name, amount and currency, thus causing penalty fees for overdrafts, over-thelimit, amounts not available causing further rejections or overdrafts, and rejected transactions by some banks. In some countries debit cards offer lower levels of security protection than credit cards. Theft of the users PIN using skimming devices can be accomplished much easier with a PIN input than with a signature-based credit transaction In many places, laws protect the consumer from fraud much less than with a credit card. While the holder of a credit card is legally responsible for only a minimal amount of a fraudulent transaction made with a credit card, which is often waived by the bank, the consumer may be held liable for hundreds of dollars, or even the entire value of fraudulent debit transactions. The consumer also has a shorter time (usually just two days) to report such fraud to the bank in order to be eligible for such a waiver with a debit card[8], whereas with a credit card, this time may be up to 60 days. A thief who obtains or clones a debit card along with its PIN may be able to clean out the consumer's bank account, and the consumer will have no recourse. 3 Smart card

A smart card, chip card, or integrated circuit card (ICC), is any pocket-sized card with embedded integrated circuits. There are two broad categories of ICCs. Memory cards contain only non-volatile memory storage components, and perhaps dedicated security logic. Microprocessor cards contain volatile memory and microprocessor components. The card is made of plastic, generally polyvinyl chloride, but sometimes acrylonitrile butadiene styrene or polycarbonate . Smart cards may also provide strong security authentication for single sign-on within large organizations. A smart card may have the following generic characteristics: Dimensions similar to those of a credit card. ID-1 of the ISO/IEC 7810 standard defines cards as nominally 85.60 by 53.98 millimetres (3.370 2.125 in). Another popular size is ID-000 which is nominally 25 by 15 millimetres (0.984 0.591 in) (commonly used in SIM cards). Both are 0.76 millimetres (0.030 in) thick. Contains a tamper-resistant security system (for example a secure cryptoprocessor and a secure file system) and provides security services (e.g. protects in-memory information). http://earnrupees4you.com Page 31

 Managed by an administration system which securely interchanges information and configuration settings with the card, controlling card blacklisting and application-data updates. Communicates with external services via card-reading devices, such as ticket readers, ATMs, etc. Benefits Smart cards can provide identification, authentication, data storage and application processing Types of debit cards Contact smart card Contact smart cards have a contact area of approximately 1 square centimetre (0.16 sq in), comprising several gold-plated contact pads. These pad provide electrical connectivity when inserted into a reader. The ISO/IEC 7810 and ISO/IEC 7816 series of standards define: physical shape and characteristics electrical connector positions and shapes electrical characteristics communications protocols, including commands sent to and responses from the card basic functionality Cards do not contain batteries; energy is supplied by the card reader. Signals

Reader Contact smart card readers are used as a communications medium between the smart card and a host, e.g. a computer, a point of sale terminal, or a mobile telephone. Because the chips in financial cards are the same Subscriber Identity Module (SIM) as in mobile phones, programmed differently and embedded in a different piece of PVC, chip manufacturers are building to the more demanding GSM/3G standards. Contactless smart card A second card type is the contactless smart card, in which the card communicates with and is powered by the reader through RF induction technology (at data rates of 106 to 848 kilobits/second). These cards require only proximity to an antenna to communicate. They are http://earnrupees4you.com Page 32

often used for quick or hands-free transactions such as paying for public transportation without removing the card from a wallet. ISO/IEC 14443 is the standard for contactless smart card communications. It defines two types of contactless cards ("A" and "B"). Proposals for ISO/IEC 14443 types C, D, E, F and G have been rejected by the International Organization for Standardization Examples of widely used contactless smart cards are Hong Kong's Octopus card, Shanghai's Public Transportation Card, Moscow's Transport/Social Card, South Korea's T-money (bus, subway, taxi). Hybrids Dual-interface cards implement contactless and contact interfaces on a single card with some shared storage and processing. An example is Porto's multi-application transport card, called Andante, that uses a chip with both contact and contactless interfaces. Applications Computer security The Mozilla Firefox web browser can use smart cards to store certificates for use in secure web browsing. Smart cards are also used for single sign-on to log on to computers. Financial Smart cards serve as credit or ATM cards, fuel cards, mobile phone SIMs, authorization cards for pay television, household utility pre-payment cards, high-security identification and accesscontrol cards, and public transport and public phone payment cards. Smart cards may also be used as electronic wallets. The smart card chip can be "loaded" with funds to pay parking meters and vending machines or at various merchants. Health care (medical) Smart health cards can improve the security and privacy of patient information, provide a secure carrier for portable medical records, reduce health care fraud, support new processes for portable medical records, provide secure access to emergency medical information, enable compliance with government initiatives and mandates, and provide the platform to implement other applications as needed by the health care organization. Identification A quickly growing application is in digital identification. In this application, the cards authenticate identity. The most common example employs PKI. The card stores an encrypted digital certificate issued from the PKI provider along with other relevant information. The first smart card driver's license system in the world was issued in 1995 in Mendoza province http://earnrupees4you.com Page 33

of Argentina Other Smart cards are widely used to protect digital television streams. VideoGuard is a specific example of how smart card security worked (and was cracked). Security Smart cards have been advertised as suitable for personal identification tasks, because they are engineered to be tamper resistant. The chip usually implements some cryptographic algorithm. There are, however, several methods for recovering some of the algorithm's internal state. Differential power analysis Differential power analysis[17] involves measuring the precise time and electrical current required for certain encryption or decryption operations. This can deduce the on-chip private key used by public key algorithms such as RSA. Some implementations of symmetric ciphers can be vulnerable to timing or power attacks as well. Physical disassembly Smart cards can be physically disassembled by using acid, abrasives, or some other technique to obtain unrestricted access to the on-board microprocessor. Problems The plastic card in which the chip is embedded is fairly flexible, and the larger the chip, the higher the probability that normal use could damage it. Cards are often carried in wallets or pocketsa harsh environment for a chip. However, for large banking systems, failure-management costs can be more than offset by fraud reduction. Using a smart card for mass transit presents a privacy risk, because it allows the mass transit operator (and the government) to track an individual's movement. Another problem is the lack of standards for functionality and security. To address this problem, The Berlin Group launched the Project to propose "a new functional and security framework for smart-card based Point of Interaction (POI) equipment". 4 Definition of E-Money

Electronic money (also known as e-currency, e-money, electronic cash, electronic currency, digital money, digital cash or digital currency) refers to money or scrip which is only exchanged electronically. Typically, this involves the use of computer networks, the internet and digital stored value systems. Electronic Funds Transfer (EFT) and direct deposit are all examples of electronic money. Also, it http://earnrupees4you.com Page 34

is a collective term for financial cryptography and technologies enabling it. While electronic money has been an interesting problem for cryptography, to date, the use of emoney has been relatively low-scale. One rare success has been Hong Kong's Octopus card system, which started as a transit payment system and has grown into a widely used electronic money system. Two other cities have implemented functioning electronic money systems. Very similar to Hong Kong's Octopus card, Singapore has an electronic money program for its public transportation system (commuter trains, bus, etc.). The Netherlands has also implemented an electronic money system known as Chipknip, which is based upon the same system in Hong Kong. A number of electronic money systems use Contactless payment transfer in order to facilitate easy payment and give the payee more confidence in not letting go of their electronic wallet during the transaction. 2]E-money refers to any money that is only transferred electronically. Digital currency providers may make their money selling the e-currency to consumers or by charging transaction fees to change e-money into actual currency. Several e-money scripts are eCash, eCache, WebMoney, Google Checkout and Gogopay. Digital currency can offer more privacy than debit and credit card transactions. Electronic money systems In technical terms, electronic money is an online representation, or a system of debits and credits, used to exchange value within another system, or within itself as a stand alone system. Occasionally, the term electronic money is also used to refer to the provider itself. A private currency may use gold to provide extra security, such as digital gold currency. Centralised systems Many systemssuch as Paypal, WebMoney, cashU, and Hub Culture's Venwill sell their electronic currency directly to the end user, but other systems only sell through third party digital currency exchangers. In the case of Octopus card in Hong Kong, electronic money deposits work similarly to regular bank deposits. After Octopus Card Limited receives money for deposit from users, the money is deposited into a bank. This is similar to debit-card-issuing banks redepositing money at central banks. Decentralised systems Decentralised electronic money systems include: Bitcoin, an anonymous distributed electronic money system Ripple monetary system, a project to develop a distributed system of electronic money independent of local currency. PKTP, a pseudonymous distributed electronic money system http://earnrupees4you.com Page 35

Offline 'anonymous' systems In the use of offline electronic money, the merchant does not need to interact with the bank before accepting money from the user. Instead merchants can collect monies spent by users and deposit them later with the bank. In principle this could be done offline, i.e. the merchant could go to the bank with his storage media to exchange e-money for cash. Nevertheless the merchant is guaranteed that the user's e-money will either be accepted by the bank, or the bank will be able to identify and punish the cheating user. In this way a user is prevented from spending the same funds twice (double-spending). Offline e-money schemes also need to protect against cheating merchants, i.e. merchants that want to deposit money twice (and then blame the user). Issues Although electronic money can provide many benefitssuch as convenience and privacy, increased efficiency of transactions, lower transaction fees, and new business opportunities with the expansion of economic activities on the Internetthere are many potential issues with the use of e-money. The transfer of digital currencies raises local issues such as how to levy taxes or the possible ease of money laundering,total amount of electronic money versus the total amount of real money available, basically the possibility that digital cash could exceed the real cash available. Another issue is related to computer crime, in which computer criminals may actually alter computer databases to steal electronic money or by reducing an account's amount of electronic money. Similarities Between E-Money and Credit Cards Both e-money and credit cards are frequently used in online purchases. Both online transactions using credit cards and e-money require the Internet to send money. Both forms of currency can be used anywhere in the world if the vendor accepts that means of payment. Both credit card transactions and e-money via digital currencies require trust between sender and receiver. Both e-money and credit cards rely on the same advances in encryption to transfer information digitally. Differences Between E-Money and Credit Cards E-money when used to transfer legal tender between vendors or individuals can be exchanged for cash. Digital currencies are not legal tender, though that currency may be traded with the local currency. E-money transactions typically have fewer fraud protections if any. E-money does not charge interest because it is not a loan. If someone does not pay a debt owed for a transaction with e-money, they may not be able to sue the other party; they may only be able to report the problem to the e-money provider. 5 Marketing on the web, marketing strategies, advertising on the web

Internet marketing, also referred to as i-marketing, web-marketing, online-marketing or ehttp://earnrupees4you.com Page 36

Marketing, is the marketing of products or services over the Internet. The Internet has brought media to a global audience. The interactive nature of Internet marketing in terms of providing instant responses and eliciting responses are the unique qualities of the medium. Internet marketing is sometimes considered to be broad in scope because it not only refers to marketing on the Internet, but also includes marketing done via e-mail and wireless media. Management of digital customer data and electronic customer relationship management (ECRM) systems are also often grouped together under internet marketing. Internet marketing ties together creative and technical aspects of the Internet, including: design, development, advertising, and sales. Internet marketing also refers to the placement of media along many different stages of the customer engagement cycle through search engine marketing (SEM), search engine optimization (SEO), banner ads on specific websites, e-mail marketing, and Web 2.0 strategies. Business models Internet marketing is associated with several business models: e-commerce this is where goods are sold directly to consumers (B2C) or businesses (B2B) lead-based websites an organization that generates value by acquiring sales leads from its website affiliate marketing the process in which a product or service developed by one entity (ecommerce business, single person, or a combination) is sold by other active sellers for a share of profits. The entity of the product may provide some marketing material (sales letter, affiliate link, tracking facility) local internet marketing through which a small company utilizes the Internet to find and nurture relationships, which are to be used for real-world advantage.

blackhat marketing this is a form of internet marketing which employs deceptive, abusive, or less than truthful methods to drive web traffic to a website or affiliate marketing offer. This method sometimes includes spam, cloaking within search engine result pages, or routing users to pages they didn't initially request. One-to-one approach The targeted user is typically browsing the Internet alone therefore the marketing messages can reach them personally. This approach is used in search marketing, where the advertisements are based on search engine keywords entered by the users. Appeal to specific interests Internet marketing and geo marketing places an emphasis on marketing that appeals to a specific http://earnrupees4you.com Page 37

behaviour or interest, rather than reaching out to a broadly defined demographic. "On- and Offline" marketers typically segment their markets according to age group, gender, geography, and other general factors. Marketers have the luxury of targeting by activity and geolocation. For example, a kayak company can post advertisements on kayaking and canoeing websites with the full knowledge that the audience has a related interest. Geo-targeting Geo targeting (in internet marketing) and geo marketing are the methods of determining the geolocation (the physical location) of a website visitor with geolocation software, and delivering different content to that visitor based on his or her location, such as country, region/state, city, metro code/zip code, organization, Internet Protocol (IP) address, ISP or other criteria. Advantages Internet marketing is relatively inexpensive when compared to the ratio of cost against the reach of the target audience. Therefore, businesses have the advantage of appealing to consumers in a medium that can bring results quickly. The strategy and overall effectiveness of marketing campaigns depend on business goals and cost-volume-profit (CVP) analysis. Internet marketers also have the advantage of measuring statistics easily and inexpensively. Nearly all aspects of an Internet marketing campaign can be traced, measured, and tested. The advertisers can use a variety of methods: pay per impression, pay per click, pay per play, or pay per action. Therefore, marketers can determine which messages or offerings are more appealing to the audience. Because exposure, response, and overall efficiency of Internet media are easier to track than traditional off-line mediathrough the use of web analytics for instanceInternet marketing can offer a greater sense of accountability for advertisers. Limitations From the buyer's perspective, the inability of shoppers to touch, smell, taste or "try on" tangible goods before making an online purchase can be limiting. However, there is an industry standard for e-commerce vendors to reassure customers by having liberal return policies as well as providing in-store pick-up services. Security concerns Information security is important both to companies and consumers that participate in online business. Many consumers are hesitant to purchase items over the Internet because they do not trust that their personal information will remain private. Some companies that purchase customer information offer the option for individuals to have their information removed from the database, also known as opting out. However, many customers are unaware if and when their information is being shared, and are unable to stop the transfer of their information between companies if such activity occurs. Another major security concern that consumers have with e-commerce merchants is whether or http://earnrupees4you.com Page 38

not they will receive exactly what they purchase. Online merchants have attempted to address this concern by investing in and building strong consumer brands (e.g., Amazon.com, eBay, Overstock.com), and by leveraging merchant/feedback rating systems and e-commerce bonding solutions. All of these solutions attempt to assure consumers that their transactions will be free of problems because the merchants can be trusted to provide reliable products and services. Additionally, the major online payment mechanisms (credit cards, PayPal, Google Checkout, etc.) have also provided back-end buyer protection systems to address problems if they actually do occur. Effects on industries The number of banks offering the ability to perform banking tasks over the internet has also increased. Online banking appeals to customers because it is often faster and considered more convenient than visiting bank branches. ] Internet auctions have become a multi-billion dollar business. Unique items that could only previously be found at flea markets are now being sold on Internet auction websites such as eBay. Specialized e-stores sell an almost endless amount of items ranging from antiques, movie props, clothing, gadgets and much more. As the premier online reselling platform, eBay is often used as a price-basis for specialized items. Buyers and sellers often look at prices on the website before going to flea markets; the price shown on eBay often becomes the item's selling price. In addition to the major effect internet marketing has had on the technology industry, the effect on the advertising industry itself has been profound. This has had a growing impact on the electoral process. During the 2007 primaries candidates added, on average, over 500 social network supporters per day to help spread their message. [10] President Barack Obama raised over US$1 million in a single day during his extensive Democratic candidacy campaign, largely due to online donors. [11] What is a Web Marketing Strategy? Web or Internet Marketing strategies form the cornerstones of your online business, and outline in general terms what is required to make your business a success (for example, driving potential customers to your website). Ideally you should consider and write out the different elements of your overall marketing strategy before you do anything else. Internet Marketing Tactics Achieving the aims set out in your web marketing strategy means taking action and implementing various marketing tactics. This is where it gets difficult. The problem is knowing which web marketing tactics actually work, or just as importantly which don't. There's so much hype and misinformation about marketing online that it's often difficult to find the truth. Many end up using incorrect or outdated Internet marketing strategies and tactics that have them working hard but getting nowhere. Advertising on the web Online advertising is a form of promotion that uses the Internet and World Wide Web for the expressed purpose of delivering marketing messages to attract customers. Examples of online http://earnrupees4you.com Page 39

advertising include contextual ads on search engine results pages, banner ads, Rich Media Ads, Social network advertising, interstitial ads, online classified advertising, advertising networks and e-mail marketing, including e-mail spam. Competitive advantage over traditional advertising One major benefit of online advertising is the immediate publishing of information and content that is not limited by geography or time. To that end, the emerging area of interactive advertising presents fresh challenges for advertisers who have hitherto adopted an interruptive strategy. Another benefit is the efficiency of advertiser's investment. Online advertising allows for the customization of advertisements, including content and posted websites. For example, AdWords, Yahoo! Search Marketing and AdSense enable ads to be shown on relevant web pages or alongside search results of related keywords. Revenue models The three most common ways in which online advertising is purchased are CPM, CPC, and CPA. CPM (Cost Per Mille), also called "Cost Per Thousand (CPT), is where advertisers pay for exposure of their message to a specific audience. " Per mille" means per thousand impressions, or loads of an advertisement. However, some impressions may not be counted, such as a reload or internal user action. CPV (Cost Per Visitor) is where advertisers pay for the delivery of a Targeted Visitor to the advertisers website. CPV (Cost Per View) is when an advertiser pays for each unique user view of an advertisement or website (usually used with pop-ups, pop-unders and interstitial ads). CPC (Cost Per Click) is also known as Pay per click (PPC). Advertisers pay each time a user clicks on their listing and is redirected to their website. They do not actually pay for the listing, but only when the listing is clicked on. This system allows advertising specialists to refine searches and gain information about their market. CPA (Cost Per Action) or (Cost Per Acquisition) advertising is performance based and is common in the affiliate marketing sector of the business. In this payment scheme, the publisher takes all the risk of running the ad, and the advertiser pays only for the amount of users who complete a transaction, such as a purchase or sign-up. This is the best type of rate to pay for banner advertisements and the worst type of rate to charge. o Similarly, CPL (Cost Per Lead) advertising is identical to CPA advertising and is based on the user completing a form, registering for a newsletter or some other action that the merchant feels will lead to a sale. Also common, CPO (Cost Per Order) advertising is based on each time an order is transacted. CPE ( Cost Per Engagement) is a form of Cost Per Action pricing first Page 40

o o

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introduced in March 2008. Differing from cost-per-impression or cost-per-click models, a CPE model means advertising impressions are free and advertisers pay only when a user engages with their specific ad unit. Engagement is defined as a user interacting with an ad in any number of ways. [3] Cost per conversion Describes the cost of acquiring a customer, typically calculated by dividing the total cost of an ad campaign by the number of conversions. The definition of "Conversion" varies depending on the situation: it is sometimes considered to be a lead, a sale, or a purchase. Types The large majority of online advertising has a cost that is brought about by usage or interaction of an ad, there are a few other methods of advertising online that only require a one time payment. The Million Dollar Homepage is a very successful example of this. Visitors were able to pay $1 per pixel of advertising space and their advert would remain on the homepage for as long as the website exists with no extra costs. Floating ad: An ad which moves across the user's screen or floats above the content. Expanding ad: An ad which changes size and which may alter the contents of the webpage. Polite ad: A method by which a large ad will be downloaded in smaller pieces to minimize the disruption of the content being viewed Wallpaper ad: An ad which changes the background of the page being viewed. Trick banner: A banner ad that looks like a dialog box with buttons. It simulates an error message or an alert. Pop-up: A new window which opens in front of the current one, displaying an advertisement, or entire webpage. Pop-under: Similar to a Pop-Up except that the window is loaded or sent behind the current window so that the user does not see it until they close one or more active windows. Video ad: similar to a banner ad, except that instead of a static or animated image, actual moving video clips are displayed. This is the kind of advertising most prominent in television, and many advertisers will use the same clips for both television and online advertising. Map ad: text or graphics linked from, and appearing in or over, a location on an electronic map such as on Google Maps. Mobile ad: an SMS text or multi-media message sent to a cell phone. Interstitial ad: a full-page ad that appears before a user reaches their original destination. http://earnrupees4you.com Page 41

E-mail advertising Legitimate Email advertising or E-mail marketing is often known as "opt-in e-mail advertising" to distinguish it from spam. Affiliate marketing Affiliate marketing is a form of online advertising where advertisers place campaigns with a potentially large number of small (and large) publishers, whom are only paid media fees when traffic to the advertiser is garnered, and usually upon a specific measurable campaign result (a form, a sale, a sign-up, etc). Contextual advertising Many advertising networks display graphical or text-only ads that correspond to the keywords of an Internet search or to the content of the page on which the ad is shown. These ads are believed to have a greater chance of attracting a user, because they tend to contain content relevant to the user's search query. For example, a search query for "flowers" might return an advertisement for a florist's website. Behavioral targeting In addition to contextual targeting, online advertising can be targeted based on a user's past clickstream. For example, if a user is known to have recently visited a number of automotive shopping / comparison sites based on clickstream analysis enabled by cookies stored on the user's computer, that user can then be served auto-related ads when they visit other, nonautomotive sites. Semantic advertising Semantic advertising applies semantic analysis techniques to web pages. The process is meant to accurately interpret and classify the meaning and/or main subject of the page and then populate it with targeted advertising spots. By closely linking content to advertising, it is assumed that the viewer will be more likely to show an interest (i.e., through engagement) in the advertised product or service. 1 customer service and support The significance of customer service eludes many senior executives, let alone the methods of establishing and managing customer service standards and quality. Our own experiences as customers demonstrate all the time that many large organizations fail particularly to empower customer-facing and call-centre staff, and also fail to design policies and systems to empower customer-facing staff and enable effective customer service. Often these are defensive strategies because staff are not trusted, and because competition is feared, or because simply the policymakers and systems-designers are too far removed from customers and their customer service expectations. Benefits of effective customer service

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The central aim of effective customer service and call-centres is retaining customers, but when an organization gets this right the acquisition of new customers - and so many other things automatically becomes much easier too. Retaining customers - enabled by excellent customer service - produces many positive benefits for the organization aside from the obvious revenue and profit results: Retaining customers through effective customer service enables easier growth, indirectly and directly, for example by sustaining healthier volumes and margins, and by business expansion from word-of-mouth referrals. High levels of customer retention via effective customer service also improves staff morale and motivation. No-one enjoys working for an organization that feels like a sinking ship, or where stressful arguments or pressures prevail. When customers are happy, all the staff are happier too - and more productive. Improved staff morale and motivation resulting from reducing customer attrition also positively benefits staff retention and turnover, recruitment quality and costs, stress, grievance, discipline and counselling pressures. Reduced customer attrition and upset naturally reduces litigation and legal problems, from customers or fair trading laws. Retaining customers also enables the whole organization - especially middle-managers to focus more on proactive opportunities (growth, innovation, development, etc) rather than reactive fire-fighting, crisis management, failure analysis, and the negative high pressures to win replacement business. Having a culture of delighting and retaining customers fuels positive publicity and reputation in the media, and increasingly on the web in blogs and forums, etc. The converse applies of course, when nowadays just one disgruntled customer and a reasonable network of web friends can easily cause a significant public relations headache. Customer service code of practice (british standard BS 8477) While other customer service standards exist in various forms around the world the British Standards Institute offers a useful and authoritative interpretation which will transfer to most situations. The British Standard Code of Practice for Customer Service was published by the British Standards Institute (BSI) and became effective on 16 April 2007, under the authority of the BSI Technical Committee responsible for Relationship Management Systems. As a Code of Practice, this standard is one of guidance and recommendation - it is not a formal or mandatory specification and should not be offered, implemented or quoted as such. The Introduction of the code of practice references the Harvard Business Review in summarizing the main benefits of improving customer satisfaction via effective customer service as being (the http://earnrupees4you.com Page 43

'3Rs'): retention related sales referrals It also refers to the research by the (British) Institute of Customer Service (ICS) in identifying the most important elements of service delivery according to customers: 1. timeliness 2. appearance 3. courtesy 4. quality and efficiency 5. ease of doing business 6. problem-solving These are interpreted into an alternative set of '3Rs' for effective non-commercial, public sector customer services and service delivery: responsive reliable respectful BSI suggests that the Customer Service Code of Practice will assist organisations to: 1. Establish effective customer service mechanisms 2. Improve competitiveness 3. Differentiate their offering via innovative customer services 4. Build customer loyalty through positive customer service experience 5. Increase customer retention 6. Attract new customers via word of mouth 7. Reduce marketing costs 8. Increase service efficiency 9. Reduce complaints and complaints handling resources and costs 10. Improve compliance with consumer trading laws http://earnrupees4you.com Page 44

11. Improve services and accountability (especially for public sector organizations) 12. Develop and sustain organization-wide focus on customers and quality 13. Improve ease of dealing with organization for customers These Customer Service Principles are outlined and regarded as essential: 1. Commitment (at all levels) 2. Credibility (keep promises) 3. Culture (customer service ethos) 4. Competencies (of staff - in recruitment, training and assessment) 5. Responsibility (clear and supported with suitable authority - with at least one person responsible for customer problems) 6. Resources (adequate for effectiveness) 7. Identification and management of all customer service issues 8. Quality (of customer service - relevant input and review) 9. Feedback (enabled for customers and employees) 10. Continual improvement (to meet or exceed customer expectations) 11. Internal customers (establish concept and communications) The code of practice outlines the Implementation obligations for each main group of workers, (critically within which is the appointment of a dedicated customer service manager): 1. Top management - establish resources, empowerment, culture, etc responsibilities, processes, reporting,

2. Customer service management - detailed processes, financial management of customer services, staffing and training, legal, complaints handling and escalation 3. Employees - awareness of customer services aims, responsibilities and benefits 4. Customer service employees - competent, aware, committed, etc And outlines principles for the Maintenance of effective customer services, entailing: 1. Feedback - staff, customers, systems 2. Audits 3. Benchmarking 4. Complaints http://earnrupees4you.com Page 45

The code of practice also contains an annex covering the Recruitment, Competencies and Training of Customer Services Employees, also covering motivational factors and recommendations, conduct and behavioural development. The customer service staff competencies are summarised as: 1. Interpersonal and empathy 2. Communication 3. Handling stress 4. Active listening 5. Team-working 6. Problem-solving and complaints-handling 7. Product and organization knowledge 8. Commitment to aims and values of organization Customer service tips for organizations and leaders For organizations needing to improve their customer service, gathering and reviewing customer complaints is the quickest way to draft an action list. Consulting customer service staff is also essential. For all organizations, customer complaints and feedback from customer-facing staff will keep you constantly aware of areas to improve to keep up with changing markets needs and expectations. Treat complaints about service failures like precious gems, because they are that valuable. So welcome and encourage complaints, don't fear or hide from them, or pretend you are fantastic because you (make sure that you) don't get any complaints. Make it as easy for people to complain as to buy. There's a challenge for you.. Here are some common mistakes that organizations make about customer service and complaints handling in particular: don't.. Make it difficult for people to complain, e.g., long-winded contact method on your website. Make it difficult for customer service staff to give feedback and to influence customer service systems and policies. Treat the customer service function like a battery hen farm.

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 Fail to have a complaints handling process which you have tested and had approved by complaining customers. Fail to appoint anyone responsible for managing complaints handling. Fail to inform staff about the value of complaints and the need to encourage and respond to them. Refuse to escalate complaints and problems, or make escalation to a higher level difficult. Refuse to give customers the names of senior managers and executives and their contact details. Fail to put free or local-rate customer services phone numbers on your invoices and website. Fail to show clearly and make available your head office contact details. Fail to expose senior managers and executives to complaining customers. Pretend to have a customer service department but merely outsource a basic messagetaking service. Offer an automated telephone menu system which excludes appropriate and easy options to complain. Design punitive termination penalties for customers wishing to cancel their contracts and instruct your customer service staff to use such threats freely and forcefully. instead do.. Check your culture. This comes from the top and pervades everything. So this is ultimately for the CEO or the shareholders to start changing if it's not right. There is little point in implementing a wonderfully robust and logical customer service code of practice if your culture can't support it. So this section is really all about culture and particularly how you treat staff ans customers. All the rest is relatively easy and mechanical for any decent modern management team, because aside from culture, customer service relies on sensible service and pricing strategies and the processes to sell and deliver then and to sort out problems. What makes the real difference is how you involve and treat people within these processes. Which all comes back to culture. The culture must be one of really honestly respecting and valuing staff and customers. When you have this culture the human element gets to work: relationships and communications work, problems are solved, internally and externally people focus on looking after colleagues and customers, rather than merely working systems, executing processes and adhering to policies. The organisation has life - becomes organic - rather than operating as an inflexible machine or a set of instructions. http://earnrupees4you.com Page 47

In the context of customer service, a good indication of culture is how easy it is to complain. In lots of big organizations it's actually very difficult to complain, and even more difficult to complain and be taken seriously. You must make it easy for people - customers and staff - to contact you and complain, by email, post and especially by phone, and to every level in your organization - especially to the CEO. Executives who never see complaints are deluding themselves. On the pretext of protecting their precious executive time, countless senior managers and executives are oblivious of what is happening in their business. Worse still this ostrich-like example teaches all managers that avoiding complaints is the way to manage customers, which as a customer service strategy is what might technically be referred to as a load of bollocks. Ask your customers what they think about senior managers and executives hiding from complaints and most people will use far stronger terms than that. Executives who hide from complaints also tend to develop a culture among managers and all staff that is scared of complaints, which naturally causes people to cover up complaints and to distort complaints and failure statistics even when asked to report on them. Megalomaniac, autocratic and egocentric leaders are particularly prone to this syndrome, in which customer satisfaction information is obscured and massaged so that the entire senior management moves from denial to blissful ignorance, while the customer service staff continue to act as a super-absorbent firewall, until one day - when the customer churn is nudging 25% the board finally realises that they do indeed have a problem, and that the market and the competition and the customers - and the customer service staff - are not to blame for it. The problem is the leadership: the culture, the systems, the policies, the strategies - out of step with what the customers need and expect. Interestingly this stems from the insecurity which drives certain traditional leadership styles and cultures, in which criticism is seen as a threat rather than a useful reflective and improvement aid. If you are one of these leaders please go get some therapy before you do any more harm to your staff and customers. Arrogance and bluster are not effective behaviours by which to run a proper business in the 21st century, let alone to encourage and inspire employees and managers to strive for customer service excellence. Instead expose yourself to all the complaints you can find. Remember - you would normally pay a researcher lots of money for this information. And each complaint gives you the chance to solve a customer's problem, which often means that you then get to keep that customer for life. To do this you will need to check that your complaint handling process works for your most awkward customers and for your most passive customers. This will turn many of your most awkward customers into your best customers, and some of your most passive customers into awkward customers, but you will now be receiving complaints, which if you were not seeing any before is a major advance. With all these new complaints you will need some expert input and ideas about how to improve things. Lucky for you, your employees are the world's best experts at improving your services to your customers, so it makes sense to ask for their help. http://earnrupees4you.com Page 48

Obviously ensure your customers' complaints are resolved along the way, and equally importantly, help the organization to develop the capability (and culture) to identify the causes of problems and to rectify the root causes, to prevent the problems happening again. It's a lot simple when you get the culture right. Open all the communications. Encourage complaints. Fix the problems and the systems. Utilise your people to contribute to the whole process. 2 Introduction to m-Commerce

Mobile Commerce, or m-Commerce, is about the explosion of applications and services that are becoming accessible from Internet-enabled mobile devices. It involves new technologies, services and business models. It is quite different from traditional e-Commerce. Mobile phones impose very different constraints than desktop computers. But they also open the door to a slew of new applications and services. They follow you wherever you go, making it possible to look for a nearby restaurant, stay in touch with colleagues, or pay for items at a store. As the Internet finds its way into our purses or shirt pockets, the devices we use to access it are becoming more personal too. Already today, mobile phones know the phone numbers of our friends and colleagues. They are starting to track our location. Tomorrow, they will replace our wallets and credit cards. One day, they may very well turn into intelligent assistants capable of anticipating many of our wishes and needs, such as automatically arranging for taxis to come and pick us up after business meetings or providing us with summaries of relevant news and messages left by colleagues. But, for all these changes to happen, key issues of interoperability, usability, security, and privacy still need to be addressed. Motivating Factors for M-Commerce Internet use has grown to such a level on the strength of PC networks. Due to the huge base of installed PCs, which is predicted to grow in a faster pace in the days to come, electronic commerce and other communication applications are bound to thrive further. Also, these computing systems will have greater power and storage capability, the best ever priceperformance ratios, more powerful and sophisticated applications will likely emerge for desktop computing and the Internet. However, there are two major limitations on PCs. First , users have to sit in front of them, PCs, even portable-notebook computers, have to load software, dial into and connect with a network service provider and await for the initial process to be accomplished before launching an Internet application. It is predicted that by 2004, the installed base of mobile phones worldwide will exceed 1 billion more than twice the number of PCs at that time. In addition that, there will be a huge increase in other wireless portable devices, such as wireless PDA. The advantage with these wireless devices is they do not need no booting process and thus facilitating immediate usage of them. This makes them attractive for quick-hit applications. M-Commerce Applications The general m-commerce applications are categorized as transaction management, digital content delivery and telemetry services. The applications can be further subdivided into passive and active m-commerce applications. Active application relates with the applications in which http://earnrupees4you.com Page 49

the user has to take the initiative on his wireless device. In contrast, the passive applications themselves get activated towards accomplishing the assigned jobs or facilitate the users to carry forward. Active Applications M-commerce transactions point to online shopping Web sites tailored to mobile phones and PDAs which are being equipped with the capabilities of browsing, selection, purchase, payment and delivery. These sites also include all the necessary shopping features, such as online catalogs, shopping carts, and back office functions as currently available for desktop computers. Leading online booksellers already started the commercial activities for wireless devices. Another important m-commerce transaction is to initiate and pay for purchases and services in real time. When individuals reach for their e-cash-equipped mobile phones or PDAs instead of coins to settle micro transactions, such as subway fees, widespread use of digital cash will become a reality. The second important one is regarding digital content delivery. Wireless devices can retrieve status information, such as weather, transit schedules, flash news, sports scores, ticket availability and market prices, instantly from the providers of information and directory services. Digital products, such as MP3 music, software, high-resolution images and full-motion advertising messages, can be easily downloaded to and used in wireless devices when the 3G transmission technology becomes usable.. The last major application of m-commerce is telemetry services, which include the monitoring of space flights, meteorological data transmission, video-conference, the Global Positioning System (Global Positioning System), wildlife tracking, camera control robotics, and oceanography. Thus in the near future, wireless phones and appliances can be used by people to contact and communicate with various devices from their homes, offices or any where at any time. Passive Applications This type of applications seems manifold and exciting. Instead of using dedicated cash cards for automatic collection of toll charges, digital cash can be used by integrating cash cards with mobile devices. Mobile users can easily pay and record payment of toll, mass-transit, fast-food, and other other transactions Nowadays mobile users can send and receive short text messages up to 160 characters that show up on the user's display screen. As digital convergence becomes more commonplace, all kinds of mail, such as e-mail, fax documents and digitized voice mail, can be received passively. Further on, users may be tempted for some services free of cost for viewing audio or video advertisement delivered to their wireless devices. Airline companies are testing this technology to alert frequent air passengers regarding seat availability and upgradation, to notify the changes made in the timings etc. through wireless devices.

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UNIT-3.

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e-Government (short for electronic government, also known as e-gov, digital government, online government, or connected government) is creating a comfortable, transparent, and cheap interaction between government and citizens (G2C government to citizens), government and business enterprises (G2B government to business enterprises) and relationship between governments (G2G inter-agency relationship). There are four domains of e-government namely, governance, information and communication technology(ICT), business process re-engineering(BPR)and e-citizen. Definitions of e-Government and e-Governance abound in literature. Definitions for eGovernment and e-Governance range from the working definitions like the ability for anyone visiting the city website to communicate and/or interact with the city via the Internet in any way more sophisticated than a simple email letter to the generic city email address provided at the site to the use of technology to enhance the access to and delivery of government services to benefit citizens, business partners and employees. Delivery models and activities of e-Government The primary delivery models of e-Government can be divided into: Government-to-Citizen or Government-to-Consumer (G2C) Government-to-Business (G2B) Government-to-Government (G2G) Government-to-Employees (G2E) Within each of these interaction domains, four kinds of activities take place pushing information over the Internet, e.g.: regulatory services, general holidays, public hearing schedules, issue briefs, notifications, etc. two-way communications between the agency and the citizen, a business, or another government agency. In this model, users can engage in dialogue with agencies and post problems, comments, or requests to the agency. conducting transactions, e.g.: lodging tax returns, applying for services and grants. governance, e.g.: online polling, voting, and campaigning. http://earnrupees4you.com Page 52

Non-internet e-Government While e-government is often thought of as "online government" or "Internet-based government," many non-Internet "electronic government" technologies can be used in this context. Some nonInternet forms include telephone, fax, PDA, SMS text messaging, MMS, wireless networks and services, Bluetooth, CCTV, tracking systems, RFID, biometric identification, road traffic management and regulatory enforcement, identity cards, smart cards and other Near Field Communication applications; polling station technology (where non-online e-voting is being considered), TV and radio-based delivery of government services (e.g., CSMW), email, online community facilities, newsgroups and electronic mailing lists, online chat, and instant messaging technologies.

Potential benefits and risks of e-Government I]Risks There are many considerations and potential implications of implementing and designing egovernment, including disintermediation of the government and its citizens, impacts on economic, social, and political factors, vulnerability to cyber attacks, and disturbances to the status quo in these areas.. 1]Hyper-surveillance Increased contact between government and its citizens goes both ways. Once e-government begins to develop and become more sophisticated, citizens will be forced to interact electronically with the government on a larger scale. This could potentially lead to a lack of privacy for civilians as their government obtains more and more information on them. In a worse case scenario, with so much information being passed electronically between government and civilians, a totalitarian-like system could develop. When the government has easy access to countless information on its citizens, personal privacy is lost. 2]Cost Although a prodigious amount of money has been spent on the development and implementation of e-government, some say it has yielded only a mediocre product. The outcomes and effects of trial Internet-based governments are often difficult to gauge or unsatisfactory. 3]Inaccessibility An e-government site that provides web access and support often does not offer the potential to reach many users including those who live in remote areas, are homebound, have low literacy levels, exist on poverty line incomes, suffer from chronic illness, are single parents or older adults.

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4]False sense of transparency and accountability Opponents of e-government argue that online governmental transparency is dubious because it is maintained by the governments themselves. Information can be added or removed from the public eye (i.e. the Internet) with or without public notice. For example, after the World Trade Center in New York City was attacked on September 11, 2001, United States federal officials removed a large amount of government information from its websites in the name of national security. This act went relatively unnoticed by United States citizens. To this day, very few organizations monitor and provide accountability for these modifications.. Even the governments themselves do not always keep track of the information they insert and delete. II] Benefits It is convenient and cost-effective for businesses, and the public benefits by getting easy access to the most current information available without having to spend time, energy and money to get it. E-government helps simplify processes and makes access to government information more easily accessible for public sector agencies and citizens. For example, the Indiana Bureau of Motor Vehicles simplified the process of certifying driver records to be admitted in county court proceedings. Indiana became the first state to allow government records to be digitally signed, legally certified and delivered electronically by using Electronic Postmark technologyThe anticipated benefits of e-government include efficiency, improved services, better accessibility of public services, and more transparency and accountability. Democratization One goal of e-government will be greater citizen participation. Through the internet, people from all over the country can interact with politicians or public servants and make their voices heard. Blogging and interactive surveys will allow politicians or public servants to see the views of the people they represent on any given issue. Chat rooms can place citizens in real-time contact with elected officials, their offices or provide them with the means to replace them by interacting directly with public servants, allowing voters to have a direct impact and influence in their government. These technologies can create a more transparent government, allowing voters to immediately see how and why their representation in the capital is voting the way they are. This helps voters better decide who to vote for in the future or how to help the public servants become more productive. A government could theoretically move more towards a true democracy with the proper application of e-government. Government transparency will give insight to the public on how decisions are made and hold elected officials or public servants accountable for their actions. Environmental bonuses Proponents of e-government argue that online government services would lessen the need for hard copy forms. Due to recent pressures from environmentalist groups, the media, and the public, some governments and organizations have turned to the Internet to reduce this paper use. The United States government utilizes the website http://www.forms.gov to provide internal government forms for federal employees and thus produce significant savings in paper. http://earnrupees4you.com Page 54

Speed, efficiency, and convenience E-government allows citizens to interact with computers to achieve objectives at any time and any location, and eliminates the necessity for physical travel to government agents sitting behind desks and windows. Improved accounting and record keeping can be noted through computerization, and information and forms can be easily accessed, equaling quicker processing time. On the administrative side, access to help find or retrieve files and linked information can now be stored in databases versus hardcopies stored in various locations. Public approval Recent trials of e-government have been met with acceptance and eagerness from the public. Citizens participate in online discussions of political issues with increasing frequency, and young people, who traditionally display minimal interest in government affairs, are drawn to e-voting procedures. Although internet-based governmental programs have been criticized for lack of reliable privacy policies, studies have shown that people value prosecution of offenders over personal confidentiality.

The Generic Models Broadcasting / Wider-Dissemination Model Critical Flow Model Comparative Analysis Model E-Advocacy/ Lobbying and Pressure Group Model Interactive- Service Model

Broadcasting / Wider-Dissemination Model Underlying Principle The model is based on dissemination / broadcasting of useful governance information which is in the public domain into the wider public domain through the use of ICT and convergent media. The strength of the model rests upon the fact that a more informed citizenry is better able to judge the functioning of existing governance mechanisms and make an informed opinion about them. As a consequence, they become more empowered to exercise their Rights and Responsibilities. The widespread application of this model corrects "information failure situations" by providing people with the relevant information relating to the governance sphere to make an informed opinion and impact governance processes. Further, the use of ICT opens up an alternative channel for people to access information as well as validate existing information from different sources. http://earnrupees4you.com Page 55

Applications This model could be applied in the following possible ways: Putting Governmental Laws and Legislations online. Making available the names, contact addresses, emails, fax numbers of local/ regional/ national government officials online. Make available information pertaining to Governmental Plans, Budgets, Expenditures, and Performances online. Putting key Judicial decisions which are of value to general citizens and create a precedence for future actions online. viz. key Environmental Decisions, State vs. Citizen decisions etc. Some Organisations / Projects based on such models India: Directory of Official Websites of Government of India National Informatics Centre (India) is the official website of the Government of India which makes available Ministerial Information, Indian Laws and Legislations Online, Contact Details etc. online for public access. http://goidirectory.nic.in/exe.htm#min (Parent Website : http://www.nic.in) Brazil: Official government website The website provides comprehensive information on Brazilian government as well as links to integrated citizen services. http://www.brazil.gov.br South Africa: The PIMS Monitor Idasa's Political Information and Monitoring Service (PIMS) providing an easy-to-use reference and record (with plain-language summaries) of all bills, acts and policy documents that pass through parliament. The Monitor aims to help audience engage with democracy, intervene in the legislative process and make submissions to parliament in South Africa. http://www.pims.org.za/monitor/ Global: Earth Negotiations Bulletin A reporting service which keeps informed citizens worldwide about global environmental negotiations, processes and decisions. It has a great value for citizens and even government officials in developing countries to keep track of global negotiations taking place in the West and be more informed about them. http://www.iisd.ca/voltoc.html (Parent Website : http://www.iisd.ca) Online Newspapers, Newsgroups and Portal Sites - these are instrumental in bringing key political and other important information into the wider public domain. Conclusion The Broadcast Model is stepping stone to more complex Digital Governance models. And yet, it http://earnrupees4you.com Page 56

is also the most crucial one as it enhances 'access' and 'flow' of information in the society which is the foundation for better governance. In several developing counties, even the most basic information to impact governance is unavailable. The use of this model minimizes un-informed decision-making through correction of information failures (un-availability of information) at all levels. National and Local Governments in developing countries need to aggressively adopt this model if they want to enhance participation of citizens in the governance processes. Simultaneously, the civil society should demand access to governance information to influence decisions which affect them. The model loses its effectiveness in cases where the free-flow of information is restricted (lack of information sharing culture and in cases of Optimal Ignorance). Optimal Ignorance occurs when injudicious decisions are taken not in the absence of information but because of disregard of available information by citizens and decision-makers. Further, tight governmental controls to censor information and use of ICT tools could prove to be the bane of this model. CRITICAL FLOW MODEL Underlying Principle The model is based on broadcasting or dissemination information of 'critical' value (which by its very nature will not be disclosed by those involved with bad governance practices) to targeted audience using ICT and convergent media. . Targeted audience may include, media, opposition parties, judicial bench, independent investigators or the wider public domain itself.

The use of this model requires a foresight of: Understanding the "critcal and use value" of a particular information set How or from where this information could be obtained How could the information be used strategically Who are the best target group for such information- the users for whom the availability of this information will make a huge difference The strength of this model is that the concept of 'distance' and 'time' becomes redundant when information is hosted on a digital network. Once available on the digital network, the information could be used advantageously- by instantly transferring the critical information to its user group located anywhere or by making it freely available in the wider public domain. Applications This model could be applied in the following possible ways: Making available Corruption related data about a particular Ministry / Division/ Officials online to its electoral constituency or to the concerned regulatory body. Making available Research studies, Enquiry reports, Impact studies commissioned by the Government or Independent commissions to the affected parties. Making Human Rights Violations cases violations freely available to Judiciary, NGOs http://earnrupees4you.com Page 57

and concerned citizens. Making available information that is usually suppressed, for instance, Environmental Information on radioactivity spills, effluents discharge, information on green ratings of the company to concerned community. Example of organisations / projects based on Broadcasting Model Global: Transparency International -Daily Corruption News : A trial service is being run by Transparency International called the "The Daily Corruption News" which reports on corruption from around the world. The daily corruption news has been coming out since May 2000. Bangladesh : Human Rights Portal http://www.banglarights.net The portal will actively promote human rights reforms both within Bangladesh and across geographical and political boundaries, and will support women, children, and marginalized communities in resisting social oppression. It will look at attempts by global forces (powerful governments, TNCs, international organizations) through surveillance, covert mechanisms and military and economic superiority to exploit and control smaller nations and communities. India: Central Vigilance Committee http://cvc.nic.in The website provides free-access information to citizens about government officials who have been indicted on judicial charges relating to corruption and have been advised penalty. People can also file complaints against any public servant who fall within the jurisdiction of the Commission. China: Human Rights in China Human Rights in China (HRIC) is an international non-governmental organization founded by Chinese scientists and scholars in March 1989. It strives to make information on human rights issues accessible to the Chinese people through short-wave Chinese radio broadcasts, overseas Chinese publications, and an evolving virtual media hub on human rights. Comparative Analysis Model Underlying Principle Comparative Knowledge Model is one of the least-used but a highly significant model for developing country which is now gradually gaining acceptance. The model can be used for empowering people by matching cases of bad governance with those of good governance, and then analyzing the different aspects of bad governance and its impact on the people. The model is based on using ICT to explore information available in the public or private domain and comparing it with the known information sets. The outcome is strategic learnings and arguments, for instance, if a given amount of money can build '5' schools in village 'A' then why does the same amount of money build only '2' schools in village 'B'? http://earnrupees4you.com Page 58

The strength of this model lies in the infinite capacity of digital networks to store varied information and retrieve and transmit it instantly across all geographical and hierarchal barriers.

Applications/ Possible Projects This model could be applied in the following possible ways: To learn from past policies and actions and derive learning lessons for future policymaking. To evaluate the effectiveness of the current policies and identify key learnings in terms of strengths and flaws in the policies. To effectively establish conditions of Precedence, especially in the case of Judicial or legal decision-making (example for resolving patent-related disputes, public goods ownership rights), and use it to influence/ advocate future decision-making. To enable informed decision-making at all levels by enhancing the background knowledge and also providing a rationale for action. To evaluate the performance and track-record of a particular decision-maker/ decisionmaking body.

Organisations / Projects based on such models Global: Human Development Indicators - The Human Development Report of UNDP makes use of archived Statistical information pertaining to literacy, health, national income etc. as a benchmark to assess the progress made by different countries with regards to their Human Development Index and suggests policy recommendations based on that. Many countries now also prepare national level indicators to compare progress made in different states in a country. http://hdr.undp.org/reports/view_reports.cfm?type=3 India: Comparative Learning from Disasters : In the wake of earthquake in Kutch in India (January 2001), there was a lot of comparative learning relating to disaster management drawn from a high intensity earthquake which shook Latur in India in 1993. The extensive information available on internet on both these earthquakes open up vast scope of comparison by all segments of the society. http://www.cddc.vt.edu/digitalgov/Latur-Gujarat.htm (a presentation by Mr.Praveen Singh Pardesi- Indian Administrative Service (IAS) officer of the Maharashtra cadre and currently Joint Secretary to the Chief Minister of Maharashtra, India) Comparison of different Disasters can make people realise that damages to life and property incurred are not just a factor of intensity of the disaster but also dependent on the preparedness of the Government machinery and conducive government policies to handle that disaster. Also see: Comparative Damages from Disasters in 1999 http://www.guycarp.com/pdf/nathaz_99.pdf http://earnrupees4you.com Page 59

conclusion Developing countries could very effectively use this comparative model as ICT opens their access to the global and local knowledge products at a relatively low -cost. The model is very much based on the existing sets of information but requires the ability to analyse and bring out strong arguments which could then be used to catalyze existing efforts towards self governance. There is a vast scope of application of this model for Judicial advocacy as Landmark/Key Judgments of the past could be used as precedence for influencing future decision- making. Further, watch-guard organizations and monitor-groups can use this model to continuously track the governance past record and performance and compare with different information sets. The model however becomes ineffective in absence of a strong civil society interest and public memory which is essential to force decision-makers to improve existing governance practices.

E-Advocacy / Mobilization and Lobbying Model Underlying Principle E-Advocacy / Mobilization and Lobbying Model is one of the most frequently used Digital Governance model and has often come to the aid of the global civil society to impact on global decision-making processes. The model is based on setting-up a planned, directed flow of information to build strong virtual allies to complement actions in the real world. Virtual communities are formed which share similar values and concerns, and these communities in turn link up with or support real-life groups/ activities for concerted action. The model builds the momentum of real-world processes by adding the opinions and concerns expressed by virtual communities. The strength of this model is in its diversity of the virtual community, and the ideas, expertise and resources accumulated through this virtual form of networking. The model is able to mobilize and leverage human resources and information beyond geographical, institutional and bureaucratic barriers, and use it for concerted action.

Applications This model could be applied in the following possible ways: Fostering public debates on issue of larger concerns, namely on the themes of upcoming conferences, treaties etc. Formation of pressure groups on key issues to force decision-makers to take their concerns into cognisance. Making available opinions of a suppressed groups who are not involved in the decisionmaking process into wider public domain. Catalysing wider participation in decision-making processes. Building up global expertise on a particular theme in absence of localised information to aid decision-making. http://earnrupees4you.com Page 60

Organisations / Projects based on such models Global: Greenpeace Cyber-activist Community - an effort towards creation of virtual communities to mobilise global support against some of the disputable environmental policies/ actions of the Government. Since the cyberactivist system began in June 2000, there are now 116794.0 registered cyberactivists, who participated in 357003 action alerts and sent 160597 e-cards to individuals and organizations. http://cybercentre.greenpeace.org/t/s/community_articles Global: Drop the Debt Campaign - the campaign spreads awareness of their activities through emails and mobilises support of concerned individuals, and encourages them to directly express their concern to key decision-makers (by making available their email and other contact addresses). http://www.jubileeusa.org/ Global: Independent Media Centre - The Center was established by various independent and alternative media organizations and activists for the purpose of providing grassroots coverage of the World Trade Organization (WTO) protests in Seattle lin 1999. The center acted as a clearinghouse of information for journalists, and provided up-to-theminute reports, photos, audio and video footage through its website. http://www.indymedia.org/

conclusion This model has grown manifold since the onset of debates on the Seattle round of World Trade Organisation in 1999, which saw the formation of several virtual communities to express their concerns in the WTO agreements. The display of a unified, informed civil society force at Seattle was in some ways a result of the intensive interaction and exchange of opinion happening over the virtual networks months prior to this WTO summit. There was a lot of concerted actions at the

INTERACTIVE SERVICES MODEL Underlying Principle Interactive-Service model is a consolidation of the earlier presented digital governance models and opens up avenues for direct participation of individuals in the governance processes. Fundamentally, ICT have the potential to bring in every individual in a digital network and enable interactive (two-way) flow of information amongt them. The potential of ICT for the governance is fully leveraged in this model and leads and can bring lead to greater objectivity and transparency in decision-making processes. Under this model, the various services offered by the Government become directly available to http://earnrupees4you.com Page 61

its citizens in an interactive manner. It does so by opening up an interactive Government to Consumer to Government (G2C2G) channel in various aspects of governance, such as election of government officials (e-ballots); online grievance-redressal; sharing of concerns and providing expertise; opinion polls on public issues etc.

Applications This model could be applied in the following possible ways: To establish an interactive communication channels with key policy-makers and members of Planning Commissions. To conduct electronic ballots for the election of government officials and other office bearers. To conduct public debates / opinion polls on issues of wider concern before formulation of policies and legislative frameworks. Filing of grievances, feedback and reports by citizens with the concerned governmental body. Establishing decentralised forms of governance. Performing governance functions online such as revenue collection, filing of taxes, governmental procurement, payment transfer etc. Example of organisations / projects based on Broadcasting Model India: Gyandoot Gyandoot is an intranet in Dhar district connecting rural cybercafes catering to the everyday needs of the masses. The site has following services to offer in addition to the hope that it has generated by networking, the first district in the state of Madhya Pradesh in India o Commodity/ Agricultural Marketing Information System o Copies of land maps o On-Line Registration of Applications Conclusion The model firmly relies on the interactive applications of ICT and therefore is a technology and cost - intensive model which will require a transition period before being adopted on a wider scale, especially in the Developing Countries. It would also require elemental familiarity of ICT among the citizens to fully benefit from this model. Nevertheless, the diminishing costs of ICT and the advantages offered by this technology would certainly catalyse the penetration of this model. Intermediary organisations and Knowledge Networkers will have a tremendous role to play in widespread replication of this model Regional level as an end result of such discussions which built into the global movement. http://earnrupees4you.com Page 62

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application of data warehousing and data mining in e-government

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Case studies: NICNET-role of nation wide networking

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Challenges and approach to e-government security Who pays for e-government? Like any government infrastructure project, e-government can be done in phases and the costs of implementation will depend on current infrastructure availability, supplier and user capabilities, and mode of service delivery (whether through the Internet or through telephone hotlines and one-stop shops). The more complicated and sophisticated the kind of services the government wants to offer, the more expensive it is. Governments should focus on small, self-financing or outsourced projects. Because egovernment projects must be financially sustainable, there must be a revenue/ cost-reduction model in place from the beginning. Smaller projects with a clear revenue-generation strategy and minimal initial investment are the most likely to be sustainable over the long term. For instance, Web sites are one of the easiest and cheapest ways to achieve high impact e-government with a minimum of investment. e-Government projects are, more often than not, long-term endeavors, requiring large capital infusion in software, hardware, infrastructure and training. A viable financing plan should not only pay for the immediate needs to jumpstart e-government; it must also consider its long-term financing options for the sustainability of the project. There are various business models for funding e-government projects, and the private sector plays a critical role in these. Under partnership arrangements, the private sector builds, finances and operates public infrastructure such as roads and airports, recovering costs through user charges. Various financing schemes existfrom soft and development assistance loans from donor/multilateral aid agencies to partnerships and outsourcing deals with private third party vendors under special financing schemes (e.g., the Build-Operate-Transfer or BOT scheme) that can minimize the initial cost to government. Cooperation, rather than competition, with the private sector can facilitate effective egovernment. Government can encourage private sector investment by complementing and supporting private sector efforts rather than duplicating them. The key to e-government is to improve citizen access to service delivery, not further expand the role of government. Government should not attempt to create products and services where public-private partnerships or private service providers can adequately provide these products and services more efficiently and effectively. How do you get the wider public to actually use e-government services? Any sound e-government policy must consider a citizen-centered approach. This means that egovernment should be an end-user or demand-driven service. However, many citizens do not use e-government for several reasons, among these unfamiliarity with ICT, lack of access, lack of training, and concerns about privacy and security of information. While e-government may provide ease and convenience in the delivery of public services, and offer innovative government services, none of these will prompt citizen use unless the concerns mentioned above are first addressed. http://earnrupees4you.com Page 84

Security concern in e-commerce Introduction This article presents an overview of security and privacy concerns based on our experiences as developers of WebSphere Commerce. WebSphere Commerce is business middleware that accelerates the development of any business transaction-oriented application, from the smallest online retailer to B2B portals, to supply chain management applications. For many of our clients, WebSphere Commerce provides an integrated platform that runs both their customer facing online shopping sites, and their internal distributor or supplier portals as shown in Figure 1. Figure 1. Common WebSphere Commerce business model What is e-Commerce? e-Commerce refers to the exchange of goods and services over the Internet. All major retail brands have an online presence, and many brands have no associated bricks and mortar presence. However, e-Commerce also applies to business to business transactions, for example, between manufacturers and suppliers or distributors. In the online retail space, there are a number of models that retailers can adopt. Traditionally, the Web presence has been kept distinct from the bricks and mortar presence, so transactions were limited to buying online and delivering the goods or services. The online presence is also important for researching a product that a customer can purchase later in the store. Recently, there has been a trend towards multi-channel retail, allowing new models such as purchasing online and picking up in store. e-Commerce systems are also relevant for the services industry. For example, online banking and brokerage services allow customers to retrieve bank statements online, transfer funds, pay credit card bills, apply for and receive approval for a new mortgage, buy and sell securities, and get financial guidance and information. Security overview A secure system accomplishes its task with no unintended side effects. Using the analogy of a house to represent the system, you decide to carve out a piece of your front door to give your pets' easy access to the outdoors. However, the hole is too large, giving access to burglars. You have created an unintended implication and therefore, an insecure system. In the software industry, security has two different perspectives. In the software development community, it describes the security features of a system. Common security features are ensuring passwords that are at least six characters long and encryption of sensitive data. For software consumers, it is protection against attacks rather than specific features of the system. Your house may have the latest alarm system and windows with bars, but if you leave your doors unlocked, despite the number of security features your system has, it is still insecure. Hence, security is not a number of features, but a system process. The weakest link in the chain determines the security http://earnrupees4you.com Page 85

of the system. In this article, we focus on possible attack scenarios in an e-Commerce system and provide preventive strategies, including security features, that you can implement. Security has three main concepts: confidentiality, integrity, and availability. Confidentiality allows only authorized parties to read protected information. For example, if the postman reads your mail, this is a breach of your privacy. Integrity ensures data remains as is from the sender to the receiver. If someone added an extra bill to the envelope, which contained your credit card bill, he has violated the integrity of the mail. Availability ensures you have access and are authorized to resources. If the post office destroys your mail or the postman takes one year to deliver your mail, he has impacted the availability of your mail. Security features While security features do not guarantee a secure system, they are necessary to build a secure system. Security features have four categories: Authentication: Verifies who you say you are. It enforces that you are the only one allowed to logon to your Internet banking account. Authorization: Allows only you to manipulate your resources in specific ways. This prevents you from increasing the balance of your account or deleting a bill. Encryption: Deals with information hiding. It ensures you cannot spy on others during Internet banking transactions. Auditing: Keeps a record of operations. Merchants use auditing to prove that you bought a specific merchandise. The criminal incentive Attacks against e-Commerce Web sites are so alarming, they follow right after violent crimes in the news. Practically every month, there is an announcement of an attack on a major Web site where sensitive information is obtained. Why is e-Commerce vulnerable? Is e-Commerce software more insecure compared to other software? Did the number of criminals in the world increase? The developers producing e-Commerce software are pulled from the same pool of developers as those who work on other software. In fact, this relatively new field is an attraction for top talent. Therefore, the quality of software being produced is relatively the same compared to other products. The criminal population did not undergo a sudden explosion, but the incentives of an e-Commerce exploit are a bargain compared to other illegal opportunities. Compared to robbing a bank, the tools necessary to perform an attack on the Internet is fairly cheap. The criminal only needs access to a computer and an Internet connection. On the other hand, a bank robbery may require firearms, a getaway car, and tools to crack a safe, but these may still not be enough. Hence, the low cost of entry to an e-Commerce site attracts the broader criminal population. The payoff of a successful attack is unimaginable. If you were to take a penny from every account at any one of the major banks, it easily amounts to several million dollars. The local bank robber optimistically expects a windfall in the tens of thousands of dollars. Bank branches http://earnrupees4you.com Page 86

do not keep a lot of cash on hand. The majority is represented in bits and bytes sitting on a hard disk or zipping through a network. While the local bank robber is restricted to the several branches in his region, his online counterpart can choose from the thousands of banks with an online operation. The online bank robber can rob a bank in another country, taking advantage of non-existent extradition rules between the country where the attack originated, and the country where the attack is destined. Back to top Points the attacker can target As mentioned, the vulnerability of a system exists at the entry and exit points within the system. Figure 3 shows an e-Commerce system with several points that the attacker can target: Shopper Shopper' computer Network connection between shopper and Web site's server Web site's server Software vendor Sniffing the network In this scheme, the attacker monitors the data between the shopper's computer and the server. He collects data about the shopper or steals personal information, such as credit card numbers. There are points in the network where this attack is more practical than others. If the attacker sits in the middle of the network, then within the scope of the Internet, this attack becomes impractical. A request from the client to the server computer is broken up into small pieces known as packets as it leaves the client's computer and is reconstructed at the server. The packets of a request is sent through different routes. The attacker cannot access all the packets of a request and cannot decipher what message was sent. Take the example of a shopper in Toronto purchasing goods from a store in Los Angeles. Some packets for a request are routed through New York, where others are routed through Chicago. A more practical location for this attack is near the shopper's computer or the server. Wireless hubs make attacks on the shopper's computer network the better choice because most wireless hubs are shipped with security features disabled. This allows an attacker to easily scan unencrypted traffic from the user's computer. Figure 4. Attacker sniffing the network between client and server Guessing passwords Another common attack is to guess a user's password. This style of attack is manual or http://earnrupees4you.com Page 87

automated. Manual attacks are laborious, and only successful if the attacker knows something about the shopper. For example, if the shopper uses their child's name as the password. Automated attacks have a higher likelihood of success, because the probability of guessing a user ID/password becomes more significant as the number of tries increases. Tools exist that use all the words in the dictionary to test user ID/password combinations, or that attack popular user ID/password combinations. The attacker can automate to go against multiple sites at one time. Using denial of service attacks The denial of service attack is one of the best examples of impacting site availability. It involves getting the server to perform a large number of mundane tasks, exceeding the capacity of the server to cope with any other task. For example, if everyone in a large meeting asks you your name all at once, and every time you answer, they ask you again. You have experienced a personal denial of service attack. To ask a computer its name, you use ping. You can use ping to build an effective DoS attack. The smart hacker gets the server to use more computational resources in processing the request than the adversary does in generating the request. Using server root exploits Root exploits refer to techniques that gain super user access to the server. This is the most coveted type of exploit because the possibilities are limitless. When you attack a shopper or his computer, you can only affect one individual. With a root exploit, you gain control of the merchants and all the shoppers' information on the site. There are two main types of root exploits: buffer overflow attacks and executing scripts against a server. In a buffer overflow attack, the hacker takes advantage of specific type of computer program bug that involves the allocation of storage during program execution. The technique involves tricking the server into execute code written by the attacker. The other technique uses knowledge of scripts that are executed by the server. This is easily and freely found in the programming guides for the server. The attacker tries to construct scripts in the URL of his browser to retrieve information from his server. This technique is frequently used when the attacker is trying to retrieve data from the server's database.

Defenses Despite the existence of hackers and crackers, e-Commerce remains a safe and secure activity. The resources available to large companies involved in e-Commerce are enormous. These companies will pursue every legal route to protect their customers. Figure 6 shows a high-level illustration of defenses available against attacks. Figure 6. Attacks and their defenses At the end of the day, your system is only as secure as the people who use it. Education is the best way to ensure that your customers take appropriate precautions: http://earnrupees4you.com Page 88

 Install personal firewalls for the client machines. Store confidential information in encrypted form. Encrypt the stream using the Secure Socket Layer (SSL) protocol to protect information flowing between the client and the e-Commerce Web site. Use appropriate password policies, firewalls, and routine external security audits. Use threat model analysis, strict development policies, and external security audits to protect ISV software running the Web site. Education Your system is only as secure as the people who use it. If a shopper chooses a weak password, or does not keep their password confidential, then an attacker can pose as that user. This is significant if the compromised password belongs to an administrator of the system. In this case, there is likely physical security involved because the administrator client may not be exposed outside the firewall. Users need to use good judgement when giving out information, and be educated about possible phishing schemes and other social engineering attacks. Personal firewalls When connecting your computer to a network, it becomes vulnerable to attack. A personal firewall helps protect your computer by limiting the types of traffic initiated by and directed to your computer. The intruder can also scan the hard drive to detect any stored passwords. Secure Socket Layer (SSL) Secure Socket Layer (SSL) is a protocol that encrypts data between the shopper's computer and the site's server. When an SSL-protected page is requested, the browser identifies the server as a trusted entity and initiates a handshake to pass encryption key information back and forth. Now, on subsequent requests to the server, the information flowing back and forth is encrypted so that a hacker sniffing the network cannot read the contents.

Server firewalls A firewall is like the moat surrounding a castle. It ensures that requests can only enter the system from specified ports, and in some cases, ensures that all accesses are only from certain physical machines. A common technique is to setup a demilitarized zone (DMZ) using two firewalls. The outer firewall has ports open that allow ingoing and outgoing HTTP requests. This allows the client browser to communicate with the server. A second firewall sits behind the e-Commerce servers. This firewall is heavily fortified, and only requests from trusted servers on specific ports are allowed through. Both firewalls use intrusion detection software to detect any unauthorized access attempts. http://earnrupees4you.com Page 89

Another common technique used in conjunction with a DMZ is a honey pot server. A honey pot is a resource (for example, a fake payment server) placed in the DMZ to fool the hacker into thinking he has penetrated the inner wall. These servers are closely monitored, and any access by an attacker is detected. Figure 10. Firewalls and honey pots Password policies Security best practices remain largely an art rather than a science, but there are some good guidelines and standards that all developers of e-Commerce software should follow. Using cookies One of the issues faced by Web site designers is maintaining a secure session with a client over subsequent requests. Because HTTP is stateless, unless some kind of session token is passed back and forth on every request, the server has no way to link together requests made by the same person. Cookies are a popular mechanism for this. An identifier for the user or session is stored in a cookie and read on every request. You can The primary use of cookies is to store authentication and session information, your information, and your preferences. A secondary and controversial usage of cookies is to track the activities of users. Different types of cookies are: Temporary cookies: These cookies are valid only for the lifetime of your current session, and are deleted when you close your browser. These are usually the good type. They are mostly used to keep your session information. Permanent cookies: These are for a time period, specified by the site, on the shopper's computer. They recall your previous session information. Server-only cookies: These cookies are usually harmless, and are only used by the server that issued them. Third-party cookies: These are usually used for tracking purposes by a site other than the one you are visiting. Your browser or a P3P policy can filter these cookies. If you do not want to store cookies, here are other alternatives: Send user ID/password on every request: This was popular 5-10 years ago, but now recognized as an insecure technique. The user ID/password flowing under non-SSL is susceptible to attacks. This alternative is not practical for a high volume site. Pages that run under SSL would slow down site performance. SSL client side authentication: This is the most secure, but it is cumbersome for shoppers to install on their browsers. You have to pay for a company to verify who you are and to issue a certificate. The popularity of this technique for client-side authentication has decreased in recent years. It remains very popular on server sites. http://earnrupees4you.com Page 90

 URL rewriting: This is a popular alternative to cookies. Each HTTP link on the page is specially encoded, but it is expensive for the site to implement. It interferes with the performance of the site because the pages cannot be cached and reused for different users. This alternative is susceptible to attack if it is not used under SSL. Using threat models to prevent exploits security for server computers Protecting Your Network from Hackers, Viruses and Malicious Software If you have a server-based network, it's critically important to protect your server from hackers, viruses, and other malicious software. If your server is compromised, it can jeopardize the safety and security of your company's entire network and all its data. Here are some ways you can protect your network against attack: Your server has built-in security features. Use them. If configuring your server's security settings is beyond the scope of your technical expertise, hire an expert to do it. While this will cost you a little more up front, the price you'll pay to secure your network is miniscule when compared to the cost of responding to and recovering from a hacked server. Firewalls are essential. Software firewalls are sufficient for small networks, but if your network is large or spread out, you may want to run a hardware firewall in conjunction with your server. A hardware firewall will control access to your network's computers from a single point, making it easier to monitor, and theoretically, more secure. But at the bare minimum, your server needs a software firewall. Software patches are vital to server and network security. When a new threat emerges, be it a virus, worm, or Trojan horse, antivirus software developers issue software patches, or updates, that close up the security hole that the malicious program has exploited. If you're running an old version of a server operating system, your server could be vulnerable to attack. Not having the latest version of your server's software installed is akin to not getting immunized against eradicated diseases; the cure is out there, but you just haven't bothered to take your medicine. Unrestricted server permissions and passwords should be given to as few people as possible. Use strong passwords, and keep them strictly confidential. (For more information on developing password protocol for your business, check out Five Rules for Developing Safe and Sane Password Protocol for Your Small Business.) http://earnrupees4you.com Page 91

 Physical security is just as important as password security, if not more so. Protecting your servers from the elements and criminals is essential. A closet is usually perfect for one or two servers; no windows and a single locking door reduce the chance of your servers being damaged. Lock up the room or closet whenever it's not in use, and distribute keys only to employees who absolutely need them. Also, store your server computers up off the floor, either on special racks designed for that purpose, or in some other manner, to keep them from being damaged by floods or leaks

communication channel security Covert channel In Computer Security, a covert channel is a type of computer security attack that creates a capability to transfer information objects between processes that are not supposed to be allowed to communicate by the computer security policy. Characteristics A covert channel is so called because it is hidden from the access control mechanisms of ultra high assurance secure operating systems since it does not use the legitimate data transfer mechanisms of the computer system such as read and write, and therefore cannot be detected or controlled by the hardware based security mechanisms that underlie ultra high assurance secure operating systems. Covert channels are exceedingly hard to install in real systems, and can often be detected by monitoring system performance; in addition, they suffer from a low signal-tonoise ratio and low data rates (on the order of a few bits per second). They can also be removed manually with a high degree of assurance from secure systems by well established covert channel analysis strategies. Covert channels are distinct from, and often confused with legitimate channel exploitations that attack low assurance pseudo-secure systems using schemes such as steganography or even less sophisticated schemes to disguise prohibited objects inside of legitimate information objects. This legitimate channel misuse by data hiding schemes is specifically not covert channels and can be prevented by ultra high assurance secure OSs. Covert channels can tunnel through secure operating systems and require special measures to control. Covert channel analysis is the only proven way to control covert channels. By contrast, secure operating systems can easily prevent misuse of legitimate channels. Distinguishing these is important. TCSEC criteria The Trusted Computer Security Evaluation Criteria (TCSEC) is a set of criteria established by the National Computer Security Center, an agency managed by the United States' National http://earnrupees4you.com Page 92

Security Agency. Lampson's definition of a covert channel was paraphrased in the TCSEC [2] specifically to refer to ways of transferring information from a higher classification compartment to a lower classification. In a shared processing environment, it is difficult to completely insulate one process from the effects another process can have on the operating environment. A covert channel is created by a sender process that modulates some condition (such as free space, availability of some service, wait time to execute) that can be detected by a receiving process. The TCSEC defines two kinds of covert channels: Storage channels - Communicate by modifying a stored object Timing channels - Perform operations that affect the relative timing of events The TCSEC, also known as the Orange Book,[3] requires analysis of covert storage channels to be classified as a B2 system and analysis of covert timing channels is a requirement for class B3. Eliminating covert channels The possibility of covert channels cannot be completely eliminated, although it can be significantly reduced by careful design and analysis. The detection of a covert channel can be made more difficult by using characteristics of the communications medium for the legitimate channel that are never controlled or examined by legitimate users. For example, a file can be opened and closed by a program in a specific, timed pattern that can be detected by another program, and the pattern can be interpreted as a string of bits, forming a covert channel. Since it is unlikely that legitimate users will check for patterns of file opening and closing operations, this type of covert channel can remain undetected for long periods. A similar case is port knocking. In usual communications the timing of requests is irrelevant and unwatched. Port knocking makes it significant. security for client computers. A thin client (sometimes also called a lean or slim client) is a computer or a computer program which depends heavily on some other computer (its server) to fulfill its traditional computational roles. This stands in contrast to the traditional fat client, a computer designed to take on these roles by itself. The exact roles assumed by the server may vary, from providing data persistence (for example, for diskless nodes) to actual information processing on the client's behalf. Thin clients occur as components of a broader computer infrastructure, where many clients share their computations with the same server. As such, thin client infrastructures can be viewed as the amortization of some computing service across several user-interfaces. This is desirable in contexts where individual fat clients have much more functionality or power than the infrastructure either requires or uses. This can be contrasted, for example, with grid computing.

The most common type of modern thin client is a low-end computer terminal which concentrates http://earnrupees4you.com Page 93

solely on providing a graphical user interface to the end-user. The remaining functionality, in particular the operating system, is provided by the server. Characteristics Thin clients as programs The notion of a thin client extends directly to any clientserver architecture: in which case, a thin client application is simply one which relies on its server to process most or all of its business logic. This idiom is relatively common for computer security reasons: a client obviously cannot be trusted with the logic that determines how trustworthy they are; an adversary would simply skip the logic and say "I'm as trustworthy as possible!" However, in web development in particular, client applications are becoming fatter. This is due to the adoption of heavily client-side technologies like Ajax and Flash, which are themselves strongly driven by the highly interactive nature of Web 2.0 applications. Single point of failure The server, in taking on the whole processing load of several clients, forms a single point of failure for those clients. This has both positive and negative aspects. On the one hand, the security threat model for the software becomes entirely confined to the servers: the clients simply don't run the software. Thus, only a small number of computers need to be rigorously secured, rather than securing every single client computer. On the other hand, any denial of service attack against the server will harm many clients: so, if one user crashes the system, everyone else loses their volatile data. For small networks, this single-point of failure property might even be expanded: the server can be integrated with file servers and print servers particular to its clients. This simplifies the network and its maintenance, but might increase the risk against that server. Cheap client hardware While the server must be robust enough to handle several client sessions at once, the clients can be made out of much cheaper hardware than a fat client can. This reduces the power consumption of those clients, and makes the system marginally scalable: it is relatively cheap to add on a couple more client terminals. The thin clients themselves in general have a very low total cost of ownership, but some of that is offset by requiring a robust server infrastructure with backups and so forth. This is also reflected in terms of power consumption: the thin clients are generally very low-power and might not even require cooling fans, but the servers are higherpower and require an air-conditioned server room. Client simplicity

Since the clients are made from low-cost hardware with few moving parts, they can operate in more hostile environments than conventional computers. However, they inevitably need a http://earnrupees4you.com Page 94

network connection to their server, which must be isolated from such hostile environments. Since thin clients are cheap, they offer a low risk of theft in general, and are easy to replace when they are stolen or broken. Since they don't have any complicated boot images, the problem of boot image control is centralized to the central servers. Recent Trends Ultra-thin clients

A Sun Microsystems stateless S270 thin client, sometimes called an ultra thin client Traditionally, a thin client ran a full operating system for the purposes of connecting to other computers. A newer trend is sometimes called an ultra-thin client or a zero client, which no longer runs a full operating system: the kernel instead merely initializes the network, begins the networking protocol, and handles display of the server's output. Web thin clients

Web thin clients (running a Web OS) rely on the web-based software for the application and data storage, thus eliminating the single point of failure and the need for OS/application/data aggregation and licensing required by traditional thin client.

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