Unit 4: Systems Analysis and Design in E-Commerce
Systems Analysis and Design in E-Commerce
E-commerce systems connect buyers, sellers, and intermediaries through digital platforms. Understanding system analysis and design in e-commerce helps managers develop efficient, user-friendly, and secure online systems.
E-Commerce Models
E-commerce can be categorized into different models based on the type of participants:
| Model | Description | Examples |
|---|---|---|
| B2B (Business-to-Business) | Transactions between businesses, e.g., manufacturer to wholesaler or wholesaler to retailer. | Alibaba, IndiaMART, Grainger |
| B2C (Business-to-Consumer) | Businesses sell directly to end consumers through online platforms. | Amazon, Flipkart, Myntra |
| C2C (Consumer-to-Consumer) | Consumers sell goods or services to other consumers, usually via a platform. | OLX, eBay, Quikr |
Tip: Relate each model to real-life case studies for better exam answers.
Advantages of E-Commerce Systems
E-commerce systems provide multiple benefits for businesses and customers:
| Advantage | Explanation |
|---|---|
| Global Reach | Businesses can sell products worldwide without physical stores. |
| Cost Reduction | Reduces operational costs like rent, utilities, and staff. |
| Convenience | 24/7 availability for customers to browse and purchase products. |
| Data-Driven Insights | Track consumer behavior and improve marketing strategies. |
| Faster Transactions | Automated order processing, payments, and logistics. |
| Enhanced Customer Engagement | Personalized recommendations, feedback, and support. |
Disadvantages of E-Commerce Systems
Despite the benefits, e-commerce systems have challenges and limitations:
| Disadvantage | Explanation |
|---|---|
| Security Risks | Susceptible to hacking, fraud, and data breaches. |
| Dependence on Technology | Requires reliable internet and technical infrastructure. |
| Lack of Personal Touch | Customers cannot physically inspect products before purchase. |
| High Competition | Easy market entry increases competition among businesses. |
| Delivery and Logistics Issues | Delays in shipping or product damage can affect customer satisfaction. |
| Legal & Regulatory Challenges | Compliance with different countries’ laws and taxation policies. |
System Analysis and Design in E-Commerce
Key Focus Areas
User Requirements Analysis
- Identify features needed for buyers, sellers, and administrators. Example: Search, product catalog, shopping cart, payment gateway, user authentication.
System Design Principles
- Scalability: Handle increasing users and transactions.
- Security: Encryption, secure payment systems, and data privacy.
- Usability: Simple navigation, fast loading pages, mobile-friendly.
- Integration: Connect with logistics, inventory, and payment systems.
Tools & Technique
- Prototyping: Develop early UI mockups for feedback.
- CASE Tools: Use for modeling workflows, database design, and testing.
- Data Flow Diagrams (DFD): Map order processing, payment, and delivery workflows.
Summary Table
| Aspect | Key Points | Example / Tools |
|---|---|---|
| E-Commerce Models | B2B, B2C, C2C | Alibaba, Amazon, OLX |
| Advantages | Global reach, cost reduction, convenience, data insights | Analytics dashboards, CRM integration |
| Disadvantages | Security risks, logistics issues, competition | Secure payment gateways, fraud detection tools |
| System Design Focus | Scalability, security, usability, integration | Prototyping, CASE tools, DFDs, ER diagrams |
E-commerce systems require robust architecture and stringent security measures to ensure smooth operations, user trust, and business success.
E-Commerce System Architectures
E-commerce architecture defines the structure, components, and interaction patterns of an online business system.
Types of E-Commerce System Architectures
| Architecture | Description | Advantages | Example |
|---|---|---|---|
| Client-Server Architecture | Traditional architecture where the client (browser) requests resources and the server processes and responds. | Centralized control, easier maintenance | Basic online shopping websites |
| Two-Tier Architecture | Direct interaction between client and database server. | Faster for small systems, simple design | Small business e-commerce sites |
| Three-Tier Architecture | Divides system into presentation (UI), application (business logic), and database layers. | Scalability, security, maintainability | Amazon, Flipkart |
| N-Tier / Multi-Tier Architecture | Multiple layers, including caching, web services, middleware, and database servers. | High scalability, load balancing, fault tolerance | Large enterprise e-commerce platforms |
| Cloud-Based Architecture | Hosted on cloud infrastructure with distributed resources and services. | Elastic scaling, reduced infrastructure costs | Shopify, Magento Cloud |
Tip: Use diagrams showing client, application, and database layers to make answers visually strong.
Key Components of E-Commerce Architecture
- Presentation Layer: User interface for browsing, searching, and ordering.
- Application Layer: Business logic including order processing, payments, recommendations.
- Database Layer: Stores product details, user info, transactions, and inventory.
- Payment Gateway & Security Layer: Handles secure transactions and authentication.
- Integration Layer: Connects logistics, CRM, ERP, and analytics systems.
Security Considerations in E-Commerce
E-commerce systems involve sensitive data like personal information and payment details. Security is crucial to protect customers and business integrity.
Key Security Measures
| Security Aspect | Description | Tools / Techniques |
|---|---|---|
| Data Encryption | Protects data in transit (SSL/TLS) and at rest | HTTPS, SSL certificates |
| Authentication & Authorization | Ensures only legitimate users access the system | Multi-factor authentication, OAuth |
| Secure Payment Processing | Protects financial transactions | PCI DSS compliance, tokenization |
| Firewall & Network Security | Prevents unauthorized access | Firewalls, Intrusion Detection Systems (IDS) |
| Data Privacy | Comply with regulations to protect user info | GDPR, CCPA, secure databases |
| Regular Backups & Recovery | Protects against data loss | Cloud backups, RAID storage, disaster recovery plans |
| Fraud Detection | Detects suspicious transactions or activities | AI-based fraud analytics, anomaly detection |
Example: Amazon uses HTTPS, multi-factor authentication, and fraud detection systems to secure user accounts and payments.
Summary Table
| Topic | Key Points | Example / Tools |
|---|---|---|
| System Architectures | Client-server, 3-tier, N-tier, cloud | Amazon, Flipkart, Shopify |
| Components | Presentation, Application, Database, Payment, Integration | Web server, ERP, CRM, Payment gateway |
| Security Measures | Encryption, authentication, payment security, firewall, privacy | SSL/TLS, MFA, PCI DSS, GDPR compliance |
| Benefits | Scalability, reliability, secure transactions | Large-scale e-commerce platforms |
Exam Tips
- Draw a 3-tier or cloud-based e-commerce architecture diagram.
- Explain why security is critical with real-world examples of breaches.
- Highlight integration of business logic, database, and payment security.
- Link architecture choices to scalability, fault tolerance, and performance.