FREE online courses on ECOMMERCE FUNDAMENTALS - Internet based E commerce - Problems organizations face

There are several impediments which every organization faces while implementing E-commerce:

 

Security risks

 

A security threat is defined as, “A circumstance, condition or event with the potential to cause economic hardship to data or network resources in the form of destruction, disclosure, modification of data, denial of service and/or fraud, waste and abuse”.

 

According to Kalakota and Whinston, “When an organization establishes an Internet connection, that connection effectively breaches the physical security perimeter of the corporate network and opens itself to access from other networks comprising the public Internet”.

 

Security risks fall into three general categories:

·         Client/Server risk

·         Data transfer and transaction risk

·         Virus risk.

 

To reduce the possibility of security breaches, it is best to:

·         Use the Internet only for transactions that require limited on-line processing of non-sensitive data.

 

·         Invest in security software and hardware such as firewalls, encryption programs and virus protection programs.

 

·         Realize that no system is completely safe - managing Internet security is a never-ending process.

 

Costs involved

 

There are four components of the costs involved with E-commerce:

 

·         Connection-connection costs to the Internet (i.e., direct link or connection provider);

 

·         Hardware/Software - hardware (i.e., sophisticated computer, modem, routers, etc.)

 

·         Set-up - employee work hours involved in the processes of setting up the systems;

 

·         Maintenance - employee training and maintenance (of web pages). Many corporations feel that in order to overcome this impediment, the support of top management in the decision and implementation of going on the Internet is a key issue.

 

Legal issues

 

There is uncertainty regarding legal issues, which might pop up as businesses progress on the Internet. What will happen if customer-sensitive data falls into the hands of strangers? Encryption though a viable alternative is considered a government contraband. Encrypted data is not allowed to cross national boundaries.

 

These issues need to be resolved to increase the comfort levels of organizations. It is good to have legal advice and an E-commerce literate legal expert before starting a business on the Internet.

 

Training and maintenance

 

A qualified staff, whose job is to initiate, update and maintain an Internet facility is needed. Some of the issues involved with training and maintenance can be handled by outsourcing certain functions and services. This would alleviate the need for the organization to have adequate Internet server configuration, back up and a 24-hour support environment. If an organization chooses to develop its own system it needs to understand that any innovation will usually require more time than is initially allotted. A good development team is very vital.

 

Lack of skilled personnel

 

Skilled WWW developers, content providers and knowledgeable professionals are needed to manage and maintain a customer hot line.  A vendor might be able to provide some support in these areas. However, the issue of finding and retaining personnel is a critical one. Outsourcing is initially an easy way to handle the lack of expertise within the organization and reduce expenses.

 

Lack of information

 

Most companies see the Internet as a marketing tool and as a media for advertisement. For a company, which has never used any electronic means of communication with its customers, the Internet is an unknown mode. Measures of how effective it is for the conduct of commerce are undermined and sometimes uncertain. Additional evidence of the Internet as a vehicle for E-commerce is needed in order to justify its widespread use.