What is E-commerce Software? Functions, Advanced Functions, Types

  • Post last modified:4 March 2024
  • Reading time:17 mins read
  • Post category:Business / E-Business
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What is E-commerce Software?

E-commerce software is a type of computer software that enables businesses to conduct online transactions and manage their online stores. It provides a platform for businesses to create, manage, and sell products or services through the internet.

E-commerce software typically includes features such as product catalog management, shopping cart functionality, payment gateway integration, inventory management, order processing, shipping management, and customer relationship management. It may also provide tools for marketing, advertising, and analytics.

With many organizations adopting e-commerce as a regular way of business transactions, the online market is getting crowded day by day. In such a scenario, an e-business organization must build an appropriate image in front of its customers.

This requires that the website it uses for commercial transactions is functional and up-to-date. Moreover, it should invest in proper e-commerce software that streamlines the process of online transactions securely and reliably.

The e-commerce software solutions provide various indispensable solutions to e-business organizations, ranging from displaying products on a catalog to carrying out transactions with customers and installing payment gateways. Some examples of e-commerce software are Magento, XCart, ZenCart, and CubeCart.

Functions of E-commerce Software

There are three basic functions of e-commerce software. Let us discuss the functions provided by e-commerce software in detail:

Catalogue Display

A catalogue display is an inventory that arranges the products and services sold by an organization. There are two types of catalogues:

  • Static catalogue: Small enterprises use a static catalogue, which is a simple list in HTML format and is displayed on a web page or a series of web pages. If an organization intends to add, delete or change an item from the displayed list, it will have to edit the HTML code of one or more pages.

  • Dynamic catalogue: Large enterprises use a dynamic catalogue to display content on their sites. In a dynamic catalogue, all information is mainly stored in a database.

Shopping Cart Capabilities

Previously, e-commerce websites used to have online forms, where customers needed to fill out separate text boxes to specify their choices about the type and quantity of items to purchase. They would specify the quantity of an item in one text box, the unit price in another, and the Stock Keeping Unit (SKU) or product number in yet another. This process was cumbersome when a customer had to order multiple items at a time.

Nowadays e-commerce websites have replaced online forms with electronic shopping carts. These shopping carts enable customers to keep track of the items they are purchasing from a portal and allow them to view the contents of their carts in a single view. Customers can easily add or remove items from the cart and even save the items to purchase later.

When a customer needs to place an order, he/she has to simply click on the item. This automatically stores the details of the item, such as the price and product detail, in the cart. The customer can view the contents of the shopping cart and remove an item if required. After finalizing the contents of the shopping cart, the customer can proceed to the payment gateway on the website.

Transaction Processing

Once a customer has finalized the shopping cart items, he/she needs to click on the virtual check-out box where the transaction processing begins. The e-commerce software calculates the amount to be paid and applies discounts, tax, and shipping costs if any.

This function of e-commerce software is called transaction processing. During this stage, the customer’s web browser software as well as the organization’s web server software change to a safe state of communication.

Transaction processing is the most multi-dimensional part of e-commerce. It includes significant aspects of online transactions, including applying taxes and adding shipping costs and discounts. Website administrators should constantly check for tax rates and shipping tables to make sure that they are updated.

Advanced Functions of E-commerce Software

Some organizations have some business activities that are not related to typical e-Commerce software. Such organizations would need advanced e-commerce software to integrate these business activities.

Let us discuss these advanced functions of e-Commerce software in detail:


This is used to integrate e-Commerce software with its offline systems, such as accounting and inventory. A large organization with sufficient IT staff may write its software. However, most other companies purchase customized middleware from vendors or consulting firms. Hence, using middleware involves, not just the cost of the software, but also the consulting fees charged by vendor companies for the customization of the software.

Enterprise Application Integration and Databases

An application system or software performs different functions, such as creating invoices, calculating payroll, or processing payments received from customers. An application server, on the other hand, represents a computer that receives request messages, which are first received by the web server.

Through an application server, application programs are run based on rules (also known as business logic). All the data is created, displayed, stored, and changed based on business logic. For example, when a customer signs in on a website, the application server checks the password entered against the password file in the database.

Web Services

These include the combination of software tools that enable communication between various applications over a network. It is an independent integrated application that allows one to carry out various business functionalities of the application through an Internet connection.

Integration With ERP Systems

ERP refers to Enterprise Resource Planning, which is used by organizations to integrate different business activities, such as planning, purchasing, inventory, sales, marketing, finance, and human resources. Business websites should be able to use ERP software to link with the ERP systems installed in an organization for streamlining business activities over the Internet.

E-commerce Software for Businesses

As e-business organizations expand their business across the globe, they require advanced capabilities in e-Commerce software to handle greater transaction loads. Organizations also need dedicated software applications to manage specific elements of their online business.

Larger enterprises require the same advanced capabilities as smaller ones, but larger organizations have higher transaction loads. The e-Commerce software for larger organizations streamlines specific tasks, such as:

Customer Relationship Management (CRM)

It is the combination of strategies, practices, and technologies used by organizations to interact with and manage customers to achieve the goals of customer retention and customer satisfaction. It helps the organization in understanding customer needs, maintaining their profiles, and developing better customer relations by providing them with the required products and services.

Supply Chain Management (SCM)

It is the process of streamlining various activities involved in a business from the supply side till the product/service reaches the customer. SCM aims to maximize customer satisfaction and attain economies of scale at reduced costs.

Content Management

It is an application that allows various functions involved in the management of content, such as creating, publishing, altering, arranging, and deleting.

Knowledge Management

It is a combination of strategies and processes used to manage an organization’s knowledge assets. Knowledge management involves processes designed to create, store, analyze, share, and refine knowledge.

The e-Commerce software for business can be divided into various categories.

Types of E-commerce Software

Let us discuss each type of e-Commerce software in detail.

Enterprise Class E-commerce Software

This software is useful for large organizations with higher transaction loads. It uses several dedicated computers along with a web server system and the necessary firewalls. Examples of enterprise-class e-Commerce software include:

  • IBM Web Sphere Commerce Business Edition
  • Oracle E-Business Suite
  • Broadvision One-To-One Commerce

Customer Relationship Management (CRM) Software

This software deals with aligning CRM. It is used to retrieve information from operations software that performs various activities, such as sales automation, customer service center operations, and marketing campaigns. It also collects data about customers’ visits to the company’s website or from other points of contact the company has with its existing and potential customers.

Supply Chain Management Software

It involves the collection of software that helps in the coordination of various activities, such as product development, raw material sourcing, production, and logistics. SCM software helps an organization coordinate planning and operations with associates in the industrial supply chain. It performs planning and execution functions to aid SCM in organizations.

Content Management Software

All websites consist of text, graphics, and media files that are unique to the organization and vital for conducting business over the Internet. The content management software helps to update and manage the content of the website to keep it attractive and convenient for visiting users.

With the introduction of wireless devices, such as mobile phones and Personal Digital Assistants (PDAs), content management has become even more important for organizations.

Wireless devices enable the use of online services at a click. This has significantly increased the number of Internet users all over the world. Thus, websites should be updated more frequently to gain more customers. The web page and design should be in line with these media to support the software used by them.

Knowledge Management (KM) Software

It comprises various software that helps in collecting, storing, and accessing information. Knowledge management software provides the following benefits to organizations:

  • Collect and organize information
  • Share information among users
  • Enhance the ability of users to collaborate
  • Preserve the knowledge gained through the use of information

KM software helps prospective users to benefit from the experience of existing users. It contains tools that can read electronic documents (in formats, such as Microsoft Word or Adobe PDF), scanned paper documents, e-mail messages, and Web pages.

Article Source
  • Awad Elias M. (2004). Electronic commerce. Boston, MA: Pearson/ Prentice Hall.

  • Kalakota Ravi, Andrew B. Whinston (1997). Electronic commerce. Reading, MA: Addison-Wesley.

  • Kalakota Ravi, Andrew B. Whinston (1996). Frontiers of electronic commerce. Reading, MA: Addison-Wesley Pub. Co.

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