A Survey on Intelligent Web Based System in Engineering by cuiliqing


									             A Survey on Intelligent E-Commerce Web Site

                       Siti Faeizah Bt Mohd Ali 83326
                     Msc (IKBS) May 2002/2003 Session
                      School of Information Technology
                          Universiti Utara Malaysia


This paper looks at the preview on how artificial intelligence can be applied to
e-commerce web site for better performance. There are a lots of e-commerce
web site with a different kind of intelligence features in order make business
operation a lot faster and easier.

1.0   Introduction

The astonishing growth of the Internet is the first sign that every aspect of

our economy and society are likely to change.          Electronic commerce or

formerly known as e-commerce involve buying and selling things via the

Internet. Nowadays, people are talking about e-commerce because e-

commerce can make business operations a lot faster and easier. As we know,

e-commerce is related heavily with the Internet. For example, we can buy

something through Internet.        Artificial Intelligence technique is very

important in e-commerce because we need the machine to make decisions

for us. According to Levy & Weld (2000),

             “Artificial Intelligent (AI) technology holds the key to

             these futuristic applications with the promise of advanced

             features, adaptive functionality and intuitive interfaces”.
Artificial Intelligence is one of the computer science parts that focus more on

process of studying and computer system design.         The computer system

must have intelligent characteristic such as can learn a concept and a new

task. Its also can make a decisions and give a conclusion or reason for the

decisions. This system may execute a task like a human.

1.1    Definition of Artificial Intelligent

The “Artificial Intelligence” term was first introduced at Darmouth Conference

in 1956. The purpose of this conference is to discuss the ability of machine

to imitate the human intelligence. There are many definitions of AI. Some


       “The science of making machines do things that would require

       intelligence if done by humans.”

                                                     (Marvin Minsky)

       “The study of how to make computers do things which, at the

       moment, people are better.”

                                                   (Elaine Rich)

       “The study of mental faculties through the use of computational

       model. The ultimate goal of AI research is „to build a person‟.”

                                                     (Charniak & McDermott)

There are many techniques in AI that can be applied in various fields such as

fuzzy logic, neural network, expert system, data mining, intelligent agents,
natural language processing, genetic algorithm, speech recognition. Over the

last few years, AI techniques are most popularly applied in e-commerce as

they are proved to boost the web business performance.

1.2     Introduction to E-Commerce

Electronic Commerce (E-Commerce) is coming of age. Retail on-line buying

will be in the billions of dollars in 1998. E-commerce is the actual selling of

goods or services electronically online (netvision, 2000). Electronic sales in a

resent quarter are double those of the entire previous year. E-commerce is

an emerging of new selling and merchandising tools in which buyers are able

to participate in all phases of a purchase decision, while stepping through

those processes electronically rather than in a physical store or by phone.

The process in electronic commerce include enabling a customer to access

product information, select items to purchase, purchase items securely, and

have the purchase settled financially. According to Longmire (1999) e-

commerce just means taking things that the company is already doing in

person, through the mail, or over the telephone, and doing those things in a

new place which is on the Internet. It may seem special now, but in a few

short years it'll be just another part of how every company does business.
From a customer‟s perspective, the purpose of an electronic commerce

system is to enable that customer to locate and purchase a desired good or

service over the Internet when the customer is interested in making the

purchase. Its functions no more or less than providing a virtual store.

From merchant‟s perspective, the key function of an e-commerce system is

to generate higher revenues than the merchant would achieve without the

system. In order for this to happen, the e-commerce system must recreate

or utilize existing data and business processes.

Businesses can do things with e-commerce that would be prohibitively

expensive or logistically difficult to do through older channels of commerce. A

Web site is naturally a 24-hour-a-day operation, unlike a traditional 9-to-5

company. It is much easier to keep a Web site up to date with all company

and product information than it is to do the same thing with print materials.

And the interactivity and completeness of an e-commerce Web site can

engage customers more directly, giving them a feeling of empowerment and

control that is difficult to duplicate through other methods of doing business.

According to Qin and Zhang (2000), the leading countries of the world are,

United State, Iceland, Australia and New Zealand. What‟s more, e-commerce

in Europe is developing fast and almost leading the world behind the United

States. At the same time, e-commerce in China has grown to a totally new

stage. Firstly, the nation paid much attention to the information technology
infrastructure. Secondly, many universities and institutes have applied to the

research on e-commerce, and conferences on e-commerce have been taken

place all over the country. Thirdly, e-commerce applications have been

overwhelmingly spread out by enterprises and websites. In a word, e-

commerce is changing the way business is done and has shown its powerful

strength to influence the people‟s life-style.

Not every business will be able to take full advantage of e-commerce right

away. Few companies have built their existing data systems with the idea

that it would be necessary to give the outside world access to any part of

those systems. Busy small companies may find it difficult to set aside the

time necessary to define and implement e-commerce in a way that makes

sense for the way they do business. But at the very least, companies should

keep the possibility of future electronic commerce plans in mind when they

start new initiatives or products.

E-commerce has taken the world into a revolutionary tide. With the great

success of e-commerce, there are also challenges. To meet individual user‟s

demand, customizable e-commerce is quite in need. It has significance to the

development of e-commerce and has the characteristics and advantages

compared with traditional e-commerce.
2.0   Intelligent E-Commerce

E-commerce has been applying AI techniques in the past few years. The

power of artificial intelligence approaches allows the systems or applications

grow smarter. Listed below are examples of some applications of intelligent

web based system in e-commerce.

2.1   Intelligent Agent in E-Commerce

Electronic Commerce has rapidly grown with the expansion of the Internet.

E-commerce has also become a promising field for applying agent and

Artificial Intelligence technologies. Software agents help to automate a

variety of tasks including those involved in buying and selling products over

the Internet. Agents and mobile appliances offer the promise to change the

way people purchase products by connecting the physical presence of stores

with their Internet representation and delegating consumer tasks to

intelligent pieces of autonomous software. Listed below are examples of

some application of e-commerce that uses man AI techniques.

2.1.1 E-Food.com

According to botspot.com (2000), E-Food.com using intelligent agents to help

restaurateurs to customize and independently manage their online presence.

Specifically, restaurants can use E-Food.com to create customized Web sites

that enable customers to order food either from the desktop PCs or using

wireless devices.
The intelligent agent technology enables consumers to select their favorite

cuisine from participating restaurants by the consumer's local neighborhood

area and to view their order history data. The intelligent agent also will allow

the restaurateur to view all trend information on the transactions that take

place between the consumer and the restaurant. However, no private

background information on the specific consumer is released through this


2.1.2 Intelligent Query Agent

A customer's shopping experience on e-commerce sites is important to

consider. In this environment, shoppers must sift through the information at

the e-commerce site on their own. This is a difficult task because the type

and amount information provided on e-commerce sites and how the

information is presented differs from company to company. In addition

whenever the product information is updated, more products are available,

or prices have been reduced, the customer goes unaware unless he/she

revisits the site at a later time.

According to Menczer (2002), a software agent is created to aid a customer

who is shopping for a product on an e-commerce site. E-commerce sites

allow customers to identify a product by browsing an online catalog of

products or by performing a search for the product. The shopping agent
would take both of these activities into consideration while at the same time

giving the customer some control.

The agent will:

      gather enough information from the customer's activities at the e-

       commerce site to determine the wants and needs of that customer;

      gather information regarding the decision of the customer not to buy a


      determine the criteria to be used in determining when to alert the


      automatically   and   periodically   request   information   from   the   e-

       commerce site regarding the products of interest to the customer;

      alert the customer of information changes on the products of interest.

The information gathered autonomously by the agent is analyzed and

compared with the information with which a customer was presented during

his/her original visit of the e-commerce site. If the analysis results in a

higher probability of the customer making the purchase then the shopping

agent will alert the customer. Otherwise, the agent continues to monitor the

information at the e-commerce site until the product becomes a more

appealing purchase for the customer.
2.1.3    Jango.Excite.com

Jango was developed by Netbot, inc in May 1996. It is a kind of collaborative

filtering agents and had been accepted by world companies. According to

Jango website (2000), Jango agent task is to find the best price for any

requested product. A user must tell Jango what kind of product he/she wants

and then the Jango will survey the sites that selling the requested product,

and than it comes back with an integrated shopping information including

prices and product reviews. Jango communicates with online stores using

standard Web protocols and works with existing interfaces of online stores.

2.2     Intelligent   Transaction    in   SECURITY      TRADING’S      Payment


SECURITY TRADING a leading provider of e-payment processing, begin in

1997 with a clear vision: to provide merchant worldwide with a unified,

global payment network that was secure, resilient and capable of processing

an increasing volume of transactions from any operating system or device

from anywhere in the world. A key for feature of having intelligent

transaction is the ability to ensure resilience and reliability in the system that

uses a potential unreliable and often changing network, such as internet. In

other payment systems, transactions are viewed as passive data held in a

specific format, or protocol.
These transactions are passed through a defined sequence of events, until

the transaction is completed. According to Jones (2000) each transaction

router has intelligence to make local decisions as the best way of being

processed. If a transaction router detects that part of internet is unavailable,

or that a particular payment gateway is becoming increasingly loaded it can

re-route itself to the most appropriate gateway at time. In addition, the local

intelligence within each transaction monitors its own performance through

the system, and this information is used to assist with forward capacity


It also can accept multiple transactions simultaneously, and enables them to

be processed concurrently. The true resilience of the system was put to test

recently when the Disaster and Emergency Committee launched an online

donation site for Earthquake in India appeal. Following an announcement in

BBC‟s six o‟clock news bulletin, the website received over 5000 online

donations with a few hours, totaling over ₤250,000 worth of donation in just

one night. This system is successfully handled a peak in transaction activity

just after a news bulletin, behind over more than 100 concurrent payment


2.3   Intelligent E-Analysis in NCR Corporation

Analyze online buying behavior is a basic premise of retailing. To be

successful e-commerce company need know what your customers want to
buy. Historically, innovative retailers have used detailed transaction data to

understand buying trends over time.

According to ncr.com (2000), NCR Corporation introduced the Intelligent E-

Analysis which automatically gather information about the customer buying

behavior and automatically analyzed the data in order to understand which

customers most often visit and buy from e-Storefront, determine pre-

purchase customer activity such as categories, products and promotions

viewed, as well as purchases and conversion ratios after the sale. It also can

identify the products and promotions most likely to break the “purchasing

threshold” and available to understand customer product interests in order to

personalize promotion activities.

2.4   Intelligent E-Referral in NCR Corporation

A clear understanding of how the customers navigate the web site or respond

to emails or banner ads, allows the e-commerce companies dramatically

improve the effectiveness of their online promotions. According to NCR.com

(2000) NCR Corporation introduced the Intelligent E-Referral in order to

understand which referrals ( portal, email promotions, affiliate sites, banners

ads) drive traffic to the e-commerce site by gather information on which

referrals produce the greatest revenue and profit by customer segment and

then automatically identify which referrals are most effective with. The data

was gather from any enterprise commerce server and provides view of data
elements and how they related to each other. Intelligent E-Referral also can

determine response rates and return on investment for different referral


3.0   Current and Future Trends of E-Commerce

The current trends of e-commerce as a transformer of the information of the

products and services on offer. Therefore, Electronic Commerce facilitates the

exchange of information. E-Commerce also performs the function of

matching potential customer and potential supplier by making the initial

contact between the parties possible. Payment is easily made electronically

using credit cards, electronic funds transfer, electronic       cheques and

electronic cash.

Malaysia also involve in e-commerce as Malaysia has launched its network

called JARING (Joint Advanced Research Integrated Network). JARING is a

network that links local universities. The objective of the network are to

establish an integrated data communication network, enhance multi-

disciplinary R&D activities, study and evaluate the use of data communication

technology and its impact on socio-economic activities.

In addition, Malaysia has also launched the project called Multimedia Super

Corridor. This project will enable access to the information related to

government record, education, health care and businesses.

Electronic Commerce is transforming industry and commerce. It shifts

business focus from retail and physical stores to the virtual business. Every
month, an estimated one million new Internet users join the growing online

community worldwide. Moreover, half a million new buyers enter the pool of

some 10 million Internet buyers-people who actually purchase something on

the Net each month (Straits Times, 20th June 1999).

For future trend, Internet will be as a new media of advertising and it will

produce      a    margin      profit      for    the   advertising     company.

Many companies have used the Internet as a new media of advertising. With

the increased Internet access provides opportunities for companies to do

business globally. By advertising their product or service through Web, it will

reach more countries with less cost.

Future employments opportunities for individuals in cyberspace are as


           1. The system architect - requires a person with in-depth

              knowledge of Internet tools and computer mainframe and

              client/server experience.

           2. Network infrastructure support - requires experience with

              installing and running networks.

           3. Project managers - need to manage diverse skill sets and

              deliver extremely rapid prototypes.

           4. Web site developers - a grounding in software development and

              an ability to work with cutting-edge creative Web tools are

5. Content author/publisher - experienced technical writer who can

   take engineering documents and turn them into user manuals.

   Knowledge of journalistic style and standards necessary.

6. Resident artist/photographer/post production editor - experience

   with desktop tools and the ability to create broadcast

   multimedia using modern image-editing tools needed.

7. Webmaster - maintain the Web site using Web tools. Employ

   Web utilities for gathering user-demographic data.

8. Technical support/help desk - ability to provide remote

   telephone support for a dynamic application base necessary.
4.0   Advantages and Disadvantages of e-commerce

4.1   Advantages

4.1.1 Lower Cost

Anyone can become an online merchant with a modest investment in basic

PC equipment and connectivity costs. If there is access to electronic

community centres, even such costs will not have to be borne by the

individual merchant. According to   undp.org (2000), the average cost for

building a Web storefront is about US$500 for a small site. Actually, it is

much more expensive to open a physical store than a cyberstore which

provides access to the global markets, fewer variable costs and a 24 hours a

day operation. Moreover, it will not be necessary to build a separate

distribution network which has prevented SMEs in developing countries from

exploring markets abroad.

4.1.2 Irrelevance of time and distance

Internet technologies reduce the importance of time by speeding up

processes and allowing companies to operate - and co-operate - regardless

of their geographical location. Some products, such as software, and services

are already delivered electronically. For example, Indian software companies

have garnered a considerable share of the Y2K retrofitting of non-compliant

software. Companies in industrialized countries send their software to be

upgraded electronically by Indian companies. Moreover, the Internet gives

rise to the emergence of virtual, worldwide companies taking advantage of
time differences to organize worldwide interlocking shifts and relays which

allow projects to be completed in a fraction of time and costs.

4.1.3 New employment and livelihood opportunities

E-commerce will be able to bring about new employment and livelihood

opportunities to developing countries. These opportunities arise with the

introduction of new products, expanding demand for goods and services,

tapping into and creation of new markets, the emergence of new type of

services (ISPs or content providers for software or programming in local

languages) and related secondary and tertiary effects.

4.1.4 Market development

Markets are being developed and tapped as awareness grows among the

local entrepreneurs about the potential of e-commerce and connectivity

progresses. Take the Arab States region: Arabic software companies expect

to generate 33% of their sales through the Internet over the next 2-3 years.

One Egyptian ISP estimates that the growth rate of e-commerce in Egypt will

be 1000% in the next 12 months. Multinationals expect revenue from e-

commerce to grow 100% in the same period.

In Latin America, the number of commercial sites on the Internet is growing

at a rate unmatched by any other region. The number of business-related

websites could triple in the next year to over 500,000, along with a rapid

increase in Internet users.
4.2    Disadvantages

Some    business   processes       may   never   lend   themselves   to   electronic

commerce. For example, perishable foods and high-cost items such as

jewelry or antiques may be impossible to adequately inspect from a remote

location, regardless of the technologies that are devised in the future, most

of the disadvantages of electronic commerce today, however stem from the

newness and rapidly developing pace of the underlying technologies. These

advantages will disappear as electronic commerce matures and becomes

more available to and accepted by the general population. Many products

and services require that a critical mass of potential buyers be equipped and

willing to buy via the internet.

Business often calculates return on investment numbers before committing

to a new technology. This has been difficult to do for investments in

electronic commerce, because the costs and benefits have been hard to

quantify. Costs which are a function of technology can change dramatically

during even short-lived electronic commerce implementation projects,

because the underlying technologies are changing so rapidly. Many firms

have had trouble recruiting and retaining employees with the technological,

design, and business process skills needed to create an effective electronic

commerce presence. Another problem facing firms that wants to do business

on the Internet is the difficulty of integrating existing databases and

transaction-processing software designed for traditional commerce into the

software that enables electronic commerce.
In addition to technology and software issues, many businesses face cultural

and legal impediments to electronic commerce. Some consumers are still

somewhat fearful of sending their credit card numbers over the internet

5.0   Issue and Discussion

With agents performing autonomous actions, users are now facing issues of

trust and control over their agents. According to Weiss (2001), Meech &

Marsh (2000),   the issue of trust is that by engaging an agent to perform

tasks (such as selecting a vendor) the user must be able to trust the agent to

do so in an informed and unbiased manner.

The agent should not, for example, have entered contracts with vendors to

favor them in return for a cut on their proceeds. The user would also like to

specify the degree of autonomy of the agent. For example, the user may not

want to delegate decisions to the agent that have legal or financial

consequences, although a buyer agent is capable of not only finding the

cheapest vendor, but also placing a purchase order itself.

People and organizations wish to find relevant information and offerings to

make good deals and generate profit. However, the large set of vendors in

conjunction with the many different interfaces makes it difficult for a human

to overview the market. One solution has been to provide portals or common
entry points to the web. These portals periodically collect information from a

multitude of information sources and condense them to a format that users

find easier to process, typically taking the form of a hierarchical index. The

disadvantage of this solution is that the categories of the index will be the

same for every user. Individual preferences are not taken into account when

compiling the information.

Shopping       online   lacks   the   immediate     mechanisms     for    establishing

trustworthiness. How can you trust a vendor, with whom you had no

previous      encounter,   whether    the   order   you   placed   will   be   fulfilled

satisfactorily? For examples, any seller in an online auction could claim that

the widget offered for sale is in superior condition, when the customer cannot

physically verify that claim. One solution is to solicit feedback about the

performance of a vendor (customer) from customers (vendors) after order


For example, the online auction site eBay keeps records of how a vendor was

rated by other customers. Potential new customers will take the ratings from

previous customers into account before considering buying from a vendor.

However, eBay‟s solution falls short in two ways. Old low ratings are not

discarded or discounted when more recent ratings are higher. Also, if a

vendor gets a low overall rating, it is easy for her to assume a new identity

and start afresh with a new rating. A mechanism for ensuring quality must

avoid this.
5.0   Conclusion

We are in the middle of the new age of information technology that focuses

on applying artificial intelligence techniques in various fields including e-

commerce. As such, providing tools to aid using the Internet for buying and

selling things on the web provides challenges for AI. By using AI techniques,

many problems have been solved.

Most exciting of all is that AI helps e-commerce evolved from traditional

online business transaction to an intelligence transaction.   Using AI in E-

commerce is extremely powerful and may be the difference is of succeeding

or failing online. Furthermore, it also helps to boost up web merchants

revenue and because of that people are shifting from conventional business

operations to e-commerce.

The ability to react quickly and decisively to market trends and to tailor

products and services to individual customers is more critical ever. Although

data volumes continue to increase at an astounding rate, the problem is no

longer simply one of quantity : at the heart of the issue is how companies

are using their information and it is important to understand customer

preferences and behaviors.
In conclusion, Electronic Commerce will be the way we will do business in the

new millennium. It is useful for everybody to have at least the basic

knowledge of Electronic Commerce. One who dismisses the Web will find

himself dismissed in the future. It is not a matter of choice, it is a matter of


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