E-Commerce

E-commerce is a broad term, ranging from the purchasing of stocks online (business-to-consumer transactions) to companies buying large shipments of parts from another company (business-to-business transactions). This report will focus on B-to-C transactions because it is the type of e-commerce transaction editorial sites generally use.

With Internet editorial sites looking for ways to turn a profit, many have attempted to sell products and merchandise directly from their sites. The question is whether editorial sites, like CNN.com and Salon.com can generate significant revenues through e-commerce when non-editorial sites like Amazon.com and Travelocity.com are selling similar products. Users are more inclined to go to these e-commerce sites to purchase products, because "familiarity breeds net sales," as stated in a February 2001 Business 2.0 report.

The 'electronic' or 'e' in e-commerce refers to the technology/systems; the 'commerce' refers to be traditional business models. E-commerce is the complete set of processes that support commercial business activities on a network. In the 1970s and 1980s, this would also have involved information analysis. The growth and acceptance of credit cards, automated teller machines (ATM) and telephone banking in the 1980s were also forms of e-commerce. However, from the 1990s onwards, this would include enterprise resource planning systems (ERP), data mining and data warehousing. In the dot com era, it came to include activities more precisely termed "Web commerce" -- the purchase of goods and services over the World Wide Web, usually with secure connections (HTTPS, a special server protocol that encrypts confidential ordering data for customer protection) with e-shopping carts and with electronic payment services, like credit card payment authorizations.Today, it encompasses a very wide range of business activities and processes, from e-banking to offshore manufacturing to e-logistics. The ever growing dependence of modern industries on electronically enabled business processes gave impetus to the growth and development of supporting systems, including backend systems, applications and middleware.

Examples are broadband and fibre-optic networks, supply-chain management software, customer relationship management software, inventory control systems and financial accounting software.When the Web first became well-known among the general public in 1994, many journalists and pundits forecast that e-commerce would soon become a major economic sector. However, it took about four years for security protocols (like HTTPS) to become sufficiently developed and widely deployed. Subsequently, between 1998 and 2000, a substantial number of businesses in the United States and Western Europe developed rudimentary web sites.Although a large number of "pure e-commerce" companies disappeared during the dot-com collapse in 2000 and 2001, many "brick-and-mortar" retailers recognized that such companies had identified valuable niche markets and began to add e-commerce capabilities to their Web sites. For example, after the collapse of online grocer Webvan, two traditional supermarket chains, Albertsons and Safeway, both started e-commerce subsidiaries through which consumers could order groceries online. The emergence of e-commerce also significantly lowered barriers to entry in the selling of many types of goods; accordingly many small home-based proprietors are able to use the internet to sell goods. Often, small sellers use online auction sites such as EBay, or sell via large corporate websites like Amazon.com, in order to take advantage of the exposure and setup convenience of such sites.

Application
Internet business applications – such as e-commerce storefronts, online registration, dynamically generated content, surveys and data collection, integration of third-party web applications, administrative interfaces – are powerful, highly cost-effective tools to drive growth, enhance efficiency and explore new markets.

The private sector is driving advances in e-commerce technology and use, as it should. So it is fair to ask: What is the role of the federal government in e-commerce? In particular, I would like to share my thoughts today on the role of NIST in e-commerce.

NIST’s role in e-commerce is to work closely with the private sector to ensure that the e-commerce infrastructure is strong enough and flexible enough to enable the continuing growth and success of e-commerce. NIST provides unique tools to help industry build new e-commerce technologies and applications. We hear a lot of comparisons between the new “dot com” companies and the traditional “bricks and mortar” companies. To make analogy to the more traditional view -- which is more familiar to many of us who didn’t grow up in the Internet age -- NIST provides the e-commerce “bricks and mortar” that industry uses to build new e-commerce “structures.” However, in the e-commerce world, those “bricks and mortar” that NIST provides are not just physical things but also software, standards, and technical assistance. And industry uses the e-commerce “bricks and mortar” that NIST provides not just to build physical things, but also to provide services, software, and communications methods.

NIST provides three types of tools:

• Measurements and standards for the hardware, software, and networks that comprise the e-commerce infrastructure, ensuring that the infrastructure works effectively and can support continuing growth and change.
• Direct hands-on assistance, through the Manufacturing Extension Partnership, to American small manufacturers who need help to thrive in the new e-commerce-driven economy.
• Co-funding of private sector research , through the Advanced Technology Program, to help develop the new technologies that will enable future advances in the e-commerce infrastructure and new ways of exploiting e-commerce and information technology.

Security

NIST is leading the global effort to develop the Advanced Encryption Standard, which will be used to ensure that encrypted sensitive data cannot be decoded by anyone but the intended parties. Typical of NIST standards activities, NIST has worked very closely with industry on AES to develop guidelines and ways to test new possible standards.


Making E-Commerce a Reality for Small Manufacturers: Manufacturing Extension Partnership

A recent National Association of Manufacturers study found that more than two thirds of manufacturers are not yet using electronic commerce to conduct business transactions. More than 50 percent of all supply-chain participants are small businesses. As supply-chains become increasingly driven by e-commerce, all parts of the chain will suffer if small manufacturers are unable to adopt e-commerce practices.

Supporting Research for Future E-Commerce Advances: The Advanced Technology Program

The Advanced Technology Program (ATP) bridges the gap between the research lab and the marketplace by providing cost-shared funding in the critical early stages of R&D. That is, when research risks are too high for other sources of funding, but technical success would bring about broad-based benefits. In a March 1998 workshop called “Defining the Advanced Technology Challenges of the Electronic Commerce Marketplace,” industry strongly called for increased ATP investment in key technologies and infrastructure research that would enable e-commerce advances.