Answer the Following
1) Explain the steps involved in online transactions.
Solution: The online transaction moves through pre-purchase/sale, actual purchase/sale, and delivery stage. It involves the following steps.
1) Registration – Before online shopping one has to register with the online vendor by filling up a registration form. Registration is the first step in online transactions. For online transactions, registration is required. The consumer needs to login a particular website to buy a particular article or service. The customer’s email ID, name, address, other details are saved and are safe with the website. For security reasons, the buyer’s ‘Account’ and his ‘Shopping Cart’ is an online record of what you have picked up while browsing the online store.
2) Placing an Order- It is the second step in online transactions. When a customer likes a product or service he/she puts the product in the shopping cart. The shopping cart gives a record of all the items selected by the buyer to be purchased, the number of units or quantity desired to be bought per item selected, and the price for each item. The buyer then proceeds to the payment option after selecting all the products.
3) Payment – It is the last step in an online transaction. The buyer has to select the payment option. These payment systems are secured with very high-level encryption. Personal financial information is completely secure. The following are some ways in which we can make this payment.
Cash on Delivery- In this type of payment, the buyer pays when he/she receives the product. The payment is made at the doorstep. The customer can pay in cash or by debit or credit card.
Cheque- In this type of payment, the buyer sends a cheque to the seller and the seller sends the product after the realization of the cheque.
Net Banking transfer- In this type of payment, the payment is transferred from the buyer’s account to the seller’s account electronically. After the payment is received by the seller, the seller dispatches the goods to the buyer. It is an electronic facility of transferring funds through the internet.
Credit or Debit card – The buyer makes payment through debit or credit card and the amount gets deducted from customers’ accounts. A debit card or credit card popularly known as “Plastic Money”. They are mostly used for online payments.
Digital Cash – Digital Cash is a form of electronic currency that exists only in cyberspace and has no real physical properties, but offers the ability to use real currency in an electronic format.
2) What is outsourcing? Explain the advantages and disadvantages of outsourcing.
Solution: Outsourcing is the process of contracting some business functions to specialized agencies. The company benefits in two ways.
It reduces its own cost
It uses the expertise of the firm which specializes in a particular kind of service.
Advantages of Outsourcing:
1) Overall cost advantages- It reduces the cost and also saves time and effort on training costs.
2) Stimulates entrepreneurship, employment, and exports- Outsourcing stimulates entrepreneurship, employment, and exports in the country.
3) Low manpower Cost- The manpower cost is much lower than that of the host company.
4) Access to professional, expert, and high-Quality services- Mostly the tasks are given to people who are skilled in that particular field. This provides us with a better level of service and fewer chances of errors.
5) Emphasis on core process rather than the supporting ones- With its help companies can focus on their core areas which lead to better profits and increase the quality of their products.
6) Investment requirements are reduced – The organization can save on investing in the latest technology, software, and infrastructure and let the outsourcing partner handle the entire infrastructure.
7) Increased efficiency and productivity – There is increased efficiency and productivity in the non-core areas of an organization.
8) Knowledge sharing – Outsourcing enables the organization to share knowledge and best practices with each other, it helps develop both the companies and also boosts goodwill in the industry.
Disadvantages of Outsourcing / Limitations of Outsourcing
1) Lack of customer focus- An outsourced vendor may be catering to the needs of multiple organizations at a time. In such a situation, he may lack complete focus on an individual organization. As a result, the organization may suffer.
2) A threat to security and confidentiality – The confidential information of the organization may be leaked to the third party, so there are security issues.
3) Dissatisfactory services – Some of the common problem areas with outsourcing include stretched delivery time and substandard quality.
4) Ethical issues – The major ethical issue is taking away employment opportunities from one’s own country when the function is outsourced to a company from another country.
5) Other disadvantages – i) Misunderstanding of the contracts, ii) Lack of communication, iii) Poor quality and delayed services.