Thus, within the Tanzanian context, there is a need for examining

on how efficiency and effectiveness of solid waste management

can be improved through local resources mobilization. Such an
examination should seek to show how various dimensions of local
resource pool would contribute to effective solid waste
management. These dimensions include: physical, financial,
social, economic, legal, institutional, spatial, political, cultural and
other resources.

Problems with Mobile Commerce

30-38 minutes

The recent years have seen an explosive growth in the mobile phone industry.
Research has shown that the number of mobile phone subscribers at the end of the
year 2004 has passed 1.6 billion. Mobile commerce more popularly known as m-
commerce has made the business mobility a reality. The concept of anytime and
anywhere internet facility with an inexpensive and comparatively smaller computing
infrastructure is the driving force towards mobile commerce. With the advancements
in the Wireless communication, mobile commerce has become a new paradigm for
personal communication without any constraints in location. There are no age
limitations in conducting mobile commerce. Starting from the teenagers to the
retirees, everyone is depending on mobile devices. Mobile Commerce is defined as
any direct or indirect transaction conducted through the handheld devices such as
PDAs and mobile phones facilitated through mobile or wireless telecommunication
networks. It is a subset of electronic commerce.

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E-Commerce and M-Commerce differ in the way the business is conducted. In E-

commerce, online auction systems act as an intermediary between the buyer and a
seller whereas mobile commerce is more personalized and is ideal for the location
based services. The characteristics of mobile devices such as mobility, cost,
portability, voice, more personalization and global positioning system (GPS) have
made the establishment of new business models around mobile devices. Many
applications such as mobile payment systems, entertainment, content distribution and
business services have been developed. Consumers can use mobile phones as an ATM
or debit card to purchase tickets or pay the bills online. Content distribution services
such as real time information and notifications and location tracking systems are
increasing every day. Consumers can get real time information such as stock quotes,
traffic information, news and weather forecasts anywhere anytime on their mobile
phones via the internet. In addition to the real time content services, mobile phones
have become an entertainment medium. Entertainment services such as ringtone
downloads, watching live TV broadcasts, online games and music downloads has
become a youth trend today. A report from Screen Digest Ltd., a global market
research company, shows that Korea and Japan accounted for 80% of the worldwide
online game downloading revenues (approx. 380 million Euros). According to Juniper
research, a company that specializes in mobile market and technologies, adult mobile
services and mobile gambling services accounted for total revenue of US $1 billion
and US $ 15 billion respectively.

Mobile Commerce has a great impact on business services and applications.

Extending the Enterprise Resource Planning (ERP) systems to have mobile
functionality will provide the sales personnel and marketing staff with real time
management and corporate data. Mobile inventory management applications benefit
the logistic related business in their supply chain management. Also, no time and
location based constraints helps in making the offices going paperless in which case a
sales person need not have to carry loads of paper for the client delivery.

Mobile Commerce is creating new opportunities for the mobile service providers as
well as for mobile users. Experts have proposed that the next wave of computing
would be mobile commerce and the first decade of 21st century would be considered
as the decade of mobile computing and mobile commerce. The driving factors of
mobile commerce include various interrelated forces. The social trends where every
person is depending on his or her mobile for communication (mobile society),
technological advancements and economics are some of the driving forces of mobile
commerce. The success of the electronic commerce itself is another major driving
factor for mobile commerce. Consumers have embraced the web based e commerce in
their day to day life in such a way that they cannot think of doing their tasks without
any electronic channel and this has made businesses to extend their services beyond
electronic channel into mobile channel. In addition to the above factors, the lowered
provider costs, increased internet speed and reliability, availability of content and
information anytime through an instant access and reduced time to market have
contributed for the growth of mobile services.

Although the above mentioned factors indicate that mobile commerce is creating
various opportunities for businesses, users and service providers, a report from the
Business Studies 2009 shows that only 7% of the 90% of the Americans who own a
mobile phone have used their mobile phones to conduct mobile commerce
transaction. Electronic Commerce can be divided into four different categories such as
Business to Business (B2B), Business to Consumer (B2C), Consumer to Business
(C2B) and Consumer to Consumer (C2C). Mobile commerce is mainly concerned
with the B2B or B2C market. With the widespread adoption of mobile phones, mobile
commerce has a prosperous future in business to consumer (B2C) category.

As Business to Consumer (B2C) is considered the future of mobile commerce,

businesses and consumers are becoming more concerned about security issues since
identity theft has become a growing problem. The wireless telecommunication
industry has seen enormous advancements in technology and hence the development
of standards. But a question arises on whether the early adoption of the standards may
hinder future developments in mobile commerce.
Let us have a look at the major differences between mobile commerce and electronic
commerce and what drives the consumer to adopt m-commerce over e-commerce.
The attributes such as ubiquity that is anytime, anywhere availability, high
interactivity, convenience, personalization, that is mobile phones are more personal
with most probably a single owner when compared to home computers or internet
cafes which is shared between a number of people, and finally localization are some
of the benefits of mobile commerce which is driving the consumer market. In short,
mobile commerce offers more enticing market opportunities than e- commerce.

While live internet on the mobile may sound intuitively appealing, it is very difficult
to estimate the utility and the extent of its usage. Businesses, governments, service
providers, mobile users and stakeholders still need to address many issues and
obstacles before mobile commerce pervades in to our daily lives. The next section of
the paper discusses the major issues in mobile commerce such as application issues,
network challenges, consumer privacy and trust, security concerns, infrastructure
problems and legal and regulatory issues.

Key Issues in Mobile Commerce

* Security in mobile commerce

* Location management issues

* Limitations of mobile devices

* Ethics and Privacy

* Wireless Infrastructure

* Usability

* Legal and Regulatory challenges

* Consumer Trust

* Interoperability and Compatibility

Analysis

Security in mobile commerce

Wireless communications are more vulnerable than wired communication. Although

most of the wireless data networks provide reasonable encryption, security has
become a major concern with the introduction of high end mobile devices in the
market and the anticipated increase in the number of devices. Many issues exists with
the use of mobile devices to conduct transactions such as: Data could be lost and the
mobile terminals itself could be misplaced or stolen due to its smaller size and
contents stored in the device could be accessed by anyone who possesses the device
due to lack of proper authentication techniques . Although mobile commerce enjoys
mobility, it raises many serious security threats. In particular, as it plays a very
important role in business and personal life, security issues have to be considered
seriously.

There are many aspects to consider in security which includes physical security, risk
assessment, secure wireless transmission, secured access and malware. The built in
security features such as passwords and locking keypads are not used by majority of
wireless users and the data stored on these handheld devices are often not encrypted
which makes it easy for anyone to access the information stored without any
authorized access. The article ‘Mobile Commerce: issues and obstacles’ mentions that
Motorola, Ericsson and Nokia did provide industry standard digital signature for
authentication but was discarded in 2006.

Data transmitted over the wireless medium is more vulnerable for attacks. Wireless
transmission can be intercepted and if is not encrypted or encrypted with a flawed
protocol, then the information can be made known. Unsecured data transmission may
be exploited by hackers for eavesdropping or ï’man- in-the-middle’ attacks. Tradeoff
between performance and security remains an issue of concern for low power mobile
devices.

Communication between mobile devices is in the form of ad hoc networks where one
node communicates with another without a fixed infrastructure. Network decision
making in ad hoc networks is decentralized, as a result all the network protocols rely
on the cooperation between the nodes. An attacker can utilize this to compromise a
single node with false routing information or can instruct all the routing to go through
the compromised node. In addition to compromising the nodes, hackers may route the
mobile users to download malicious or miscellaneous information or may even launch
denial of service attacks. An attacker need not always target a mobile user but instead
if a mobile user roams in an attacker’s zone he or she is vulnerable to attacks.
Roaming in an attacker’s zone may lead to the alteration or stealing of data and
information without the end user’s knowledge. The difficulty in tracing the wireless
devices as they roam in different wireless zones, no fixed geographic points and the
ability to go online and offline easily gives the malicious users an excellent advantage
to launch the attacks.

A question of who would be responsible for the financial or data loss remains a
challenge in security. Is it the user or the wireless provider or the financial institution
or the software provider held responsible for the loss? Someone has to be responsible
for the loss and it is quite costly and becomes a risk for stakeholders. Hence there is a
need for wireless risk management.

There are some false impressions that only laptops or computers are exposed for
viruses and cell phones or handheld devices such as PDAs and smart phones are
immune to viruses. These viruses when downloaded by cell phones drain battery life
or can simply increase the load on the network.28 The compromised security function
may affect not only the network but also can lead to the loss of revenue in business.

Location management issues

Mobile Commerce is an emerging field which involves many applications such as

financial applications, user applications, entertainment, mobile inventory management
applications, mobile business re-engineering, mobile games and location specific
mobile advertisements. All these applications require the support of location tracking
to track devices, products or the people. The following figure shows possible mobile
commerce architecture.

The important components of mobile commerce include wireless infrastructure, user

interfaces, devices, database, mobile middleware and servers. In general, mobile
commerce is very dependent on the location information of the users, devices,
products, services and servers. Because of the mobility involved in mobile commerce,
the location management becomes a challenging task. With the varying requirements
in precision, scalability and delay between different m-commerce applications,
tracking becomes more challenging. Issues in location management include precision
in tracking, updating the location, storage and access of the tracked information,
updating of the existing location management schemes with few modifications,
difficulty in modeling the ‘context-awareness’ related to the location management, the
overhead of location management for various mobile commerce applications under
different network size, mobility patterns and transaction size.

There are a number of location intensive mobile commerce applications which require
location management support as their primary requirement in wireless network. The
article ‘Addressing Location Issues in Mobile Commerce’ identifies some of the
location intensive mobile commerce applications which include mobile advertising,
mobile financial applications, mobile inventory management and proactive service
management. One of the most important components of mobile commerce is financial
applications which include mobile banking, mobile money transfer, brokerage
services and mobile payments. If implemented properly, these applications may
eventually become a business tool. Mobile advertising is another category of
application where advertising is targeted to the users depending on the demographic
information collected by the wireless service providers and the location of the user.
Location sensitive advertisements such as shopping deals or on-going specials can be
accomplished depending on the surrounding area of the mobile users. Issues in mobile
advertising are: who owns the location information, how to share this information
between wireless providers, what are the storage requirements and how to satisfy the
need of real time processing in order to capture the user information.

Mobile inventory management is tracking the location of products, goods and

services. This application is very helpful for logistic providers to determine the time
taken for delivery to their customers in order to provide a better customer service and
to compete against other businesses. Amongst different inventory management
applications, ‘rolling inventory’ is one of the interesting applications which involve
tracking of multiple trucks carrying large amount of inventory which helps for just in
time delivery of goods when a store needs certain goods or services. Another category
of mobile commerce application is proactive service management which involves
collecting pertinent information of current or future needs of a user and providing the
service proactively. Some of the issues in these applications are security, reliability
and the cost of deployment.

Limitations of mobile devices

Mobile phones, hand held devices such as Personal Digital Assistants (PDA) and
pagers, palm sized computers and laptops such as tablets and vehicle mounted
interfaces are some of the examples of the current wireless devices. Although
mobility and flexibility are the main advantages of the mobile terminals, they lack in
several aspects when compared to personal computers. Most of the mobile devices
have constrained display capabilities with low resolution and small screen size.
Limited and complicated input options due to small and multifunctional keypad. The
requirement of mobile devices to be physically light and small hinders the
development of user friendly interfaces and graphical applications. Mobile devices
also have limited processing and computational power, memory and disk capacity,
limited battery life and surf ability. All these drawbacks which do not support
complex applications and transactions may lead to the limited usage of mobile
commerce.

Some of the must have features of smart phones are as follows: In order to satisfy
multi-tasking and multi-application nature in smart phones, multi-tasking operating
system is a necessary feature. Second feature for smart phones to conduct mobile
commerce is a real QWERTY keyboard. The third feature is the QVGA or a high
resolution display which is necessary for web browsing, gaming and MMS. Business
productivity tools and application software for smart phones is a necessary feature to
access business, sales, financial, inventory and real time information. Support of the
3rd generation technology for internet access is another important feature. Video and
audio streaming, GPS and navigation capability and digital camera are another set of
requirements which needs to be incorporated into the ideal client platform. Packing
the above mentioned functionalities into a small handheld device with the multi-
tasking operating system and a user friendly interface is a formidable task.

Figure 2 shows a graph of the global cell phone and the smart phone shipment. As
seen from the figure the percentage of the fully featured handsets are growing every
year. Although the growth of the smart phones makes smart phones an ideal client
platform for mobile commerce, the specifications of today’s smart phones are not
adequate for the transactions required for conducting mobile commerce. The success
of the mobile commerce lies in the user satisfaction and the user experience in the
new technology. Thus mobile device limitations have to be overcome for the
widespread adoption of mobile commerce.

Figure 2: Global Cell phone and smart phone graph

Ethics and Privacy

In the recent years ethics and privacy have become a major and touchy issue where
consumers do not want to expose every aspect of their daily lives. Web applications
such as maps and financial applications require personal information from the users
which has created a negative impact with consumers. The risk of openness is
comparatively more in a mobile environment which has created higher demands of
privacy protection amongst the users. Being able to control information about oneself
is what has made privacy a major concern for the society.

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Inappropriateness of the ringing of cell phones such as in a meeting is one of the

annoying situations. This raises an ethical concern of the intrusion of cell phones at
inappropriate circumstances. This gives rise to several questions on if mobile
commerce evolves in such a way that it follows us around, monitors us and tries to
anticipate our needs and delivers services, how much does it intrude in our private
lives and the lives of people around us? Will there be a boundary between the work
and the personal life? These issues if not addressed in a satisfied manner may become
the obstacles for the adoption of mobile commerce. The article ‘Mobile Commerce
Adoption in China and the United States: A Cross Cultural Study’ states in its
hypothesis 4 as ‘Privacy Perception is positively associated with consumer’s intention
to use mobile commerce’ which is in fact a true analysis.

Federal Trade Commission has to increase its efforts in the inspection on mobile
marketing industry. It is the responsibility of the wireless providers to protect the
privacy of the consumers in the services they provide. A recent report shows that
Verizon Wireless (VZW) customers were billed for downloading the ringtones and
other mobile content which was advertised as free by the online marketers. Privacy
has to be protected by the mobile service providers in order to make consumers feel
comfortable doing business using mobile devices. It is very important for the wireless
operators to protect their customers to the fullest and to stand by their word on
treating every customer with respect.

Mobile devices provide convenience to the consumers with the slimmer and compact
style. In addition to that with the increase in the storage capability consumers are able
to store more and more data. Research shows that ninety four percent of the mobile
users stored phone numbers, eighty three percent stored digital photos, sixty five
percent stored contacts and addresses, fifty five percent stored videos and forty eight
percent stored their calendar appointments and music and other important
information. With the vast amount of private data stored on the mobile devices raises
a question of the protection of these mobile devices. If lost or stolen or damaged there
is no way to back up the data.

Wireless Infrastructure

The wireless communication infrastructure required for mobile commerce is complex.

The development of appropriate services and standards determines the success of
mobile commerce. The technologies used for mobile commerce include wireless local
area networks and wireless telecommunication. Bandwidth and data transmissions are
some of the obstacles for mobile commerce. Wireless networks bandwidth are less
when compared to the wired network. Although applications are created in such a way
that it functions effectively in both the wired and mobile environments organizations
still need to research on the interaction of the users through the wireless devices and
network. Applications running successfully in a wired environment may encounter
new problems such as data availability, fault tolerance, concurrency control and
processing efficiency when ported to a mobile environment.

The table below shows some of the wireless networking issues.

Table 1: Comparison of mobile and wireless networks

As seen from table 1, bit rate and coverage are two important factors. In addition to
that the wireless quality of service which affects the performance in terms of delay
and loss, reliability and survivability of wireless networks where a user can access
mobile commerce application even during the network failures, roaming capabilities
where a user can have access to multiple heterogeneous networks other quality
attributes are some of the specific requirements of wireless infrastructure in order to
conduct mobile commerce.

Wireless Application Protocol or WAP is the protocol used as a standard for mobile
commerce in the United States. WAP uses a set of common protocols to facilitate the
interoperability among different wireless networks, applications and devices. But in
reality WAP has failed to fulfill the technological promises. WAP cannot handle
complex transactions such as sequencing of several services distributed over different
networks. WAP is not suitable for a distributed networking environment. Another
issue with WAP is it tends to be slower since it was not originally designed for
broadband communications. The last problem with WAP is its charges are minute
based; hence time consuming activities may become expensive. GPRS was designed
as an alternative to WAP which is faster than WAP but it has its own downside. Since
the charges are based on kilobyte download (kb) in GPRS, it may become expensive
if mobile commerce service download volume is considerable.

As there is an increase in the demand for bandwidth for new and existing applications,
a lot of problems arise on how to obtain the unused airspace. Although reuse of
frequency is increasing today the availability of frequency and bandwidth may
become more limited in future. Wired devices such as laptops and PC’s use a set of
established wireless standards such as IEEE 802.11 and IEEE 802.11b. Will the
mobile devices have the ability to interface with more than one communication
environment? Will the communication technologies itself have the ability to interfere
with one other? All these questions remain as a challenge. The table below
consolidates the wireless infrastructure and communication issues.

Table 2: Wireless Infrastructure Issues

Usability

Usability and user experience issues are often neglected in most of the businesses. It
is necessary to understand and improve the usability of the web interfaces exposed
through the mobile devices. Users conduct communication such as information search
and transactions via user interface. Hence user interface is an important pre-requisite
for satisfying customer’s sensory and functional needs. While mobile devices today
can access a variety of applications, they enforce limitations in screen size resolution
and have cumbersome input mechanisms. A survey from an internet on mobile
internet users indicates usability as the biggest source of frustration. A complete
understanding of different aspects of usability and how it might differ in a wireless
context is necessary for all the designers and the organizations before leveraging the
commercial benefits of mobile commerce.

Device inefficiency may become a major issue for the adoption of mobile commerce.
User interfaces if not properly designed may lead to a fifty percent transaction
reduction via mobile devices. Addition of what is called ‘cool features’ may make
mobile devices less convenient for use. There are a number of guidelines available on
web site usability such as on how to improve the layout and design of a web page,
how to improve the components of a webpage. However these guidelines do not
specify which aspects are critical and also the criticality may differ for different
contexts and for different users. Furthermore there are limited guidelines on specific
situation implementations. Thus it is necessary to understand what is important to
users in order to create a more compelling mobile commerce and to drive revenues.

The following figure shows the linking of usability, context and value.

Figure 3: Linking of usability, context and value

Relevance, Structure and Personalization are the important factors for a successful
wireless interface experience. In addition to that it is necessary for the designers to
understand the value the consumers derive from these three relevance, structure and
personalization aspects in order to provide that value. Web presence is not equal to
wireless web presence i.e. ‘e’ # ‘m’. Mobile experience differs from web experience
in both designs as well as in usage.

Legal and Regulatory challenges

Mobile commerce raises various legal and regulatory issues and challenges which is
very broad as it includes safety along with many others. The difficulty in the
application of the traditional laws and principles in the usage of wireless technologies
is an issue facing mobile commerce. One particular case is when a seller tries to sell
goods or services through a portal which is allocated to receive requests from wireless
devices through specific network providers or when a person uses his or her mobile
device (cell phone or a PDA) to purchase something poses many legal challenges
between various parties as to who is responsible for regulating them and how should
they be regulated. There are various legal issues need to be considered in mobile
commerce, among them are the m-commerce contracts and identification of
contracting parties and their legal capacities.

Another legal issue in mobile commerce is determining the ideal method for payment.
What methods need to be devised for the payment of a purchase from one’s mobile?
Another important question is what is the applicable law and jurisdiction if mobile
devices are used for business transactions? The article on mobile commerce legal
issues gives an example for the above question. What law would apply if a person
residing in Lebanon who is a customer of Emarati uses his or her mobile to purchase
software from a German firm whose server is located in the USA? Is it the law of the
server location or the law of the country of citizenship of the customer or the law
where the customer resides or the law of jurisdiction where the customer purchased
software? If there is any dispute between the buyer and the seller, which court is
responsible for the jurisdiction? Is it the court of the buyer’s country or the seller’s
country or the court agreed by both the parties?

Digital cameras in mobile devices can be used for taking the photos and exchanging
or sharing them over the internet instantly. The sharing or exchanging of the photos
done without the proper authorization may result in the violation of the intellectual
property rights including the copyright law. In that case who is liable for the
infringement? The person who exchanged the photos on the internet or the network
providers or the operators who facilitated the exchange? Is it possible to identify the
person sharing the photo?

Another aspect of mobile commerce issue is the safety and health risks. Safety
includes many regulatory concerns such as terrorism and exposure to wireless
devices. Today cell phones and other handheld devices are used in airplanes,
automobiles, boats and more. This convenience has made the transactions on the go,
but is this safe? Cell phones or other mobile devices installed in an automobile or a
motor vehicle can distract the user from driving. Mobile commerce in the context of
driving may pose serious safety concerns. Health risks of using mobile devices for
conducting m-commerce include cancer. A research from the Foster and Moulder
from the medical college of Wisconsin indicated that the radiations produced by the
wireless devices may cause brain cancer.

Cell phones are being used to set off the bombs remotely. A report from a Cellular
news showed that terrorists used a cell phone to detonate the bomb in a min bus in
Indonesia. Another recent bombing in London England was attempted by cell phones.
A slight different issue in legal and regulatory is privacy. Today’s wireless
technologies provide a lot of information about the users to the network operators
which include tracking of the users’ location. Competitive companies can purchase
such information from the network operators which may lead to a privacy breach. The
last but not the least issue in mobile commerce is the risk of crime. Hackers can steal
the data and information from the mobile devices or simply overload the wireless
network traffic to deteriorate the service. Is there any criminal law to incorporate
these new types of crime and how will these penalties be enforced?

Consumer Trust

Trust plays an important role in mobile commerce. Trust is part of security issue but it
is more of a business and psychological issue than a technical issue. This does not
mean that trust has nothing to do with the technology, however it is necessary for the
potential mobile commerce users to perceive wireless environment as a secure
environment in order for the mobile commerce to reach its potential. Business
relationships would not exist today without the trust which exists in many forms in
business context such as laws and regulations, contracts, company policies and
personal reputations.

Building consumer trust in mobile commerce is a daunting task for the organizations,
network providers and mobile vendors. E commerce is also facing the same issue
because even today users do not trust technology. They are afraid to do any kind of
financial transaction or any purchases using mobile handhelds. Trust plays an
important role in business transaction too as trust lays the foundation between the
businesses and the customers. The key characteristics in forming the trust include
convenience, cost-efficiency, motivation, capacity and integrity. They all play an
important role in gaining the consumer trust.

Interoperability and Compatibility

Interoperability is the ability of a mobile device to be used anywhere around the

world. Compatibility as defined by the Gera and Chen is the ‘degree to which an
innovation is consistent with existing facilities and practice’. Mobile commerce
applications are said to be compatible if the applications and services satisfy the needs
or lifestyle of a user. Compatibility can be classified into two types: Behavioral and
Needs Compatibility. Behavioral compatibility is achieved when an innovation is
consistent with the current technology and the users’ existing value. Needs
compatibility is achieved when an innovation satisfies the needs of the users. Both
behavioral and needs compatibility play a very important role in the adoption of
mobile commerce.

An example for the lack of the interoperability is when a network provider offers a
text message acknowledgement within their own network and not on other network
carriers. Mobile commerce is impeded by the existence of a variety of network
communication standards. Applications are developed around the network standards
and device characteristics which is the main cause for the interoperability issues.
Efforts are being made to overcome

2
E-commerce is widely considered the buying and selling of products
over the internet, but any transaction that is completed solely
through electronic measures can be considered e-commerce. E-commerce
is subdivided into three categories: business to business or B2B,
business to consumer or B2C and consumer to consumer or C2C also
called electronic commerce. M-commerce is a term that is used to
refer to the growing practice of conducting financial and promotional
activities with the use of a wireless handheld device. The term m-
commerce is short for mobile commerce, and recognizes that the
transactions may be conducted using cell phones, personal digital
assistants and other hand held devices that have operate with
Internet access. E-commerce Security is a part of the Information
Security framework and is specifically applied to the components that
affect e-commerce that include Computer Security, Data security and
other wider realms of the Information Security framework. E-commerce
security has its own particular nuances and is one of the highest
visible security components that affect the end user through their
daily payment interaction with business. The purpose of this research
paper is to identify factors affecting the adoption of M-commerce.
The significant growth of M-commerce application is remarkable in
India. More and more consumer is transferring to M- commerce to
achieve better and fast transaction into market. M-commerce is
emerging level in India. The astounding rate growth in mobile
penetration in India, higher mobile technology and networking is
coming day by day. Now a mobile phone is not only use for text SMS or
phone call but also be used for many other activities like browsing
of net chatting or other virtual activities. This paper’s
theoretical contribution is to explain how’s M-commerce is
developing in India and to identify clear contexts and assistant
mechanism.
3

E-commerce provides an easy way to sell products to a large customer base.

However, there is a lot of competition among multiple e-commerce sites. When users
land on an e-commerce site, they expect to find what they are looking for quickly and
easily. Also, users are not sure about the brands or the actual products they want to
purchase. They have a very broad idea about what they want to buy. Many customers
nowadays search for their products on Google rather than visiting specific e-
commerce sites. They believe that Google will take them to the e-commerce sites that
have their product.

The purpose of any e-commerce website is to help customers narrow down their
broad ideas and enable them to finalize the products they want to purchase. For
example, suppose a customer is interested in purchasing a mobile. His or her search
for a mobile should list mobile brands, operating systems on mobiles, screen size of
mobiles, and all other features as facets. As the customer selects more and more
features or options from the facets provided, the search narrows down to a small list
of mobiles that suit his or her choice. If the list is small enough and the customer likes
one of the mobiles listed, he or she will make the purchase.

The challenge is also that each category will have a different set of facets to be
displayed. For example, searching for books should display their format, as in
paperpack or hardcover, author name, book series, language, and other facets related
to books. These facets were different for mobiles that we discussed earlier. Similarly,
each category will have different facets and it needs to be designed properly so that
customers can narrow down to their preferred products, irrespective of the category
they are looking into.

The takeaway from this is that categorization and feature listing of products should be
taken care of. Misrepresentation of features can lead to incorrect search results.
Another takeaway is that we need to provide multiple facets in the search results. For
example, while displaying the list of all mobiles, we need to provide facets for a
brand. Once a brand is selected, another set of facets for operating systems, network,
and mobile phone features has to be provided. As more and more facets are selected,
we still need to show facets within the remaining products.

What Is a Problem Statement:

Definition and Example
7-9 minutes
Process improvement projects are used by many businesses and organizations to make
improvements in the way they operate. Several things are important to a successful
process improvement project, but every project begins with identifying the problem
that needs to be resolved. Understanding what a problem statement is and how to
write one can help you become more successful when working on process
improvement projects. In this article, we discuss what a problem statement is and the
key elements of a problem statement with an example.

What is a problem statement?

A problem statement is a concise description of the problem or issues a project seeks
to address. The problem statement identifies the current state, the desired future state
and any gaps between the two. A problem statement is an important communication
tool that can help ensure everyone working on a project knows what the problem they
need to address is and why the project is important.

Related: Problem-Solving Skills: Definitions and Examples

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Importance of a problem statement

A problem statement is important to a process improvement project because it helps
clearly identify the goals of the project and outline the scope of a project. It also helps
guide the activities and decisions of the people who are working on the project. The
problem statement can help a business or organization gain support and buy-in for a
process improvement project.

Related: Analytical Skills: Definitions and Examples

What are the key elements of a problem

statement?
There are four key elements you should include when writing a problem statement:

1. Ideal situation
2. Reality
3. Consequences
4. Proposal

1. Ideal situation

The first thing your problem statement should describe is what the ideal situation
would be if there wasn't a problem you needed to address. This section identifies the
goals and scope of the project are. This section should create a clear understanding of
what the ideal environment will be once the issue has been resolved.
2. Reality

The next section of your problem statement should describe what the current reality is
for your company or organization. This section will identify what the problem is, state
why it is a problem and identify who the problem is impacting. It will also describe
when and where the problem was identified.

3. Consequences

The next section of your problem statement should identify what the consequences of
the problem are. This section describes the effects of the problem by describing how
the people affected by the problem are being impacted and quantifying how much the
problem is impacting them. Common consequences can include the loss of time,
money, resources, competitive advantage, productivity and more.

4. Proposal

The proposal section of a problem statement may contain several possible solutions to
the problem, but it is important to remember that it does not need to identify a specific
solution. The purpose of the proposal section should be to guide the project team on
how they can research, investigate and resolve the problem.

How to write a problem statement

A good problem statement can be created by identifying and answering several
questions related to the problem. The process used to write a problem statement
should involve answering questions using a method commonly known as 5W2H. This
process involves identifying what the problem is, why it is a problem, when and
where the problem was identified, who the problem impacts, how they are impacted
by the problem and how much of an impact the problem has. You can use the
following process to craft a problem statement that addresses the following:

1. Identify the problem.

2. Begin your statement with your ideal situation.
3. Describe current gaps.
4. State the consequences of the problem.
5. Propose addressing the problem.

1. Identify the problem

Before you can begin writing your problem statement, you first need to identify what
the problem is.

2. Begin your statement with your ideal situation

Next, you can begin writing your problem statement by describing what the ideal
environment would look like if your problem didn't exist. This section should try to
describe what your company hopes to accomplish as a result of the process
improvement project.
3. Describe current gaps

Next, write the reality section of your problem statement. Your goal in this section
should be to clearly identify what the current environment looks like. In this section,
you should identify what the problem is, what is causing the problem and why it is an
issue. You should also describe when, where and how you were able to identify the
problem.

4. State the consequences of the problem

Next, write the consequences section of your problem statement. This section is used
to quantify and support the claim of what the problem is. You can use this section to
identify specific numbers such as the amount of time or revenue being lost or the
number of resources being wasted. It is important to include concrete numbers that
support your claims in this section.

5. Propose addressing the problem

Finally, end your statement with a proposal section. In this section, you should try to
identify how your company will make progress toward reaching your goals and
accomplishing your ideal environment. While you may choose to identify several
possible solutions in this section, it is more important to focus on identifying how
your company will find those solutions than it is to identify the specific solution that
will be used.

Related: 6 Tips for Effective Teamwork

Problem statement example

Here is an example of a problem statement for a sales call center:

Ideal situation:

Ideally, our sales associates would be able to maximize their production by being
able to make more contacts with leads each day.

Reality:

Currently, our sales associates are unable to maximize the number of leads they are
contacting each day because they are spending too much time finding qualified leads
to call and inserting lead information into the system before making calls. This is a
problem because the time our sales associates are spending finding leads and
entering lead information into our system could be used to contact more qualified
leads and generate more sales. We identified this problem in our sales call center
while surveying to gather feedback from our sales associates about what limits their
ability to maximize their sales numbers.

Consequences:
Our sales associates currently spend about two hours per day finding qualified leads
and another two hours per day entering lead information into our system before they
begin making calls. This means our sales associates are only spending half of their
workday actually making calls to qualified leads. Because our sales associates are
not able to use their entire shift to make contact with leads, their overall sales
numbers are being impacted. Our company estimates that our sales associates would
be able to make at least double the number of sales if they were able to spend their
entire shift contacting qualified leads.

Proposal:

Our company seeks to resolve this issue by creating a process improvement team to
identify several potential solutions for how we can reduce the time our sales
associates spend not making contact with qualified leads.

What is ideal situation in research?

Part A (The ideal): Describes a desired goal or ideal situation;
explains how things should be. Part B (The reality): Describes a
condition that prevents the goal, state, or value in Part A from
being achieved or realized at this time; explains how the current
situation falls short of the goal or ideal.15 May 2018

A good research problem should have the following characteristics:

1. It should address a gap in knowledge.

2. It should be significant enough to contribute to the existing body of research
3. It should lead to further research
4. The problem should render itself to investigation through collection of data
5. It should be of interest to the researcher and suit his/her skills, time, and resources
6. The approach towards solving the problem should be ethical

What is the format for writing a statement of the problem?

A persuasive statement of problem is usually written in three parts:

Part A (The ideal): Describes a desired goal or ideal situation; explains how things
should be.

Part B (The reality): Describes a condition that prevents the goal, state, or value in
Part A from being achieved or realized at this time; explains how the current situation
falls short of the goal or ideal.

Part C (The consequences): Identifies the way you propose to improve the current
situation and move it closer to the goal or ideal.

Here is an example:

Statement 1
 The Ministry of Youth is dedicated to allocating enterprise development funds
to both the youth and women. These funds are made available in order to start
entrepreneurial ventures that create and expand employment. (Provide relevant
statistics and quote)

Statement 2

One of the main focuses of the ministry is consistency. Unfortunately,

consistency in allocating funds to the next generation of recipients requires
prior knowledge of previous allocations and established practices. The current
continuous disbursement method does not allow for adequate analysis of
previous disbursements before a current disbursement is done.

Statement 3

Continuing with this current disbursement method prevents consistency and

causes decisions to become grossly political, which in turn inhibits the
achievement of the goals of the funds. Developing a more informed
disbursement system could help better implement the consistency focus of the
ministry and at the same time help the ministry better monitor and evaluate its
funds.

This proposed research aspires to explore options for a new funds disbursement
system that would focus on consistency. To do this, the researcher will carry
out a full stakeholder analysis and use it to propose appropriate policy
interventions.

Sample statement of a problem

An established trend in the small business start-up financing in Kenya is to establish

funds. Some of these funds include the youth fund and women fund. These funds have
helped improve the rate of start-ups in the country. However, after the start-up stage,
the ventures start developing problems. First, they face problems in management
which lead to a marketing problem and eventually to stagnation and early exit.

A study by the Institute of Development Studies (RoK, 2004) revealed that only 38%
of the businesses are expanding while 58% have not added workers. According to the
survey, more enterprises are likely to close in their first three years of operation. Four
years later the same institute conducted another study in Central Kenya. This study
revealed that 57% of small businesses are in stagnation with only 33% of them
showing some level of growth.
In our current project, we propose to examine factors that have an impact on small
business sustainability. We will employ both qualitative and quantitative approaches
to gather both primary and secondary data and information with the objective of
determining success factors for the growth of small business in Kenya.

Specifically, we shall employ the product life cycle (PLC) model to identify the needs
of a small business at the various stages of the PLC.

Now that you’ve learnt the basics, hone your skills and write an ideal statement of the
problem with this advanced course by our expert Prof. Henry Bwisa.

personal.psu.edu

Formulating Problem Statements

8-11 minutes

Formulating Problem Statements:

Using Audience Awareness to Contextualize Your Research Goals

A persuasive problem statement consists of three parts: 1) the ideal, 2) the reality, and
3) the consequences for the reader of the feasibility report. Well constructed problem
statements will convince your audience that the problem is real and worth  having you
investigate. Your strategy is one of contrast: by situating the the ideal scenario next to
the situation as it exists, you can not only persuade the reader that a problem exists,
but then go on to emphasize the consequences of ignoring or addressing the problem.

Remember, your problem statement is the backbone of the proposal and the feasibility
report.  By giving careful consideration to how you construct it now (for the
proposal), you can use it when doing your research and writing for the proposal as
well as the progress and the feasibility report.

STATEMENT 1  (DESCRIPTION OF THE IDEAL SCENARIO)

Describe the goals, desired state, or the values that your audience considers
important and that are relevant to the problem.

(BUT)

Connect statements 1 and 2 using a term such as "but," "however,"

"Unfortunately," or "in spite of";

STATEMENT 2 (THE REALITY OF THE SITUATION)

Describe a condition that prevents the goal, state, or value discussed in statement
1 from being achieved or realized at the present time.

STATEMENT 3 (THE CONSEQUENCES FOR THE AUDIENCE)

Using specific details, show how the situation in statement 2 contains little promise of
improvement unless something is done.  Then emphasize the benefits of research by
projecting the consequences of possible solutions as well.

RESEARCH (YOUR PROPOSED RESEARCH TO INVESTIGATE THE

POSSIBILITY OF MAKING THE REALITY MORE LIKE THE IDEAL.)

Describe the areas of inquiry you will use that could lead to solutions to the
problem--- how will you research the problem? What sources of information, types of
research (primary or secondary),or tools will you use to help you find solutions and
make recommendations to resolve the clash?

PROBLEM STATEMENT EXAMPLES

Example #1
STATEMENT 1

In order to provide excellent patient care at a minimal cost, Middletown Hospital

needs diagnostic procedures that are safe, efficient, and accurate. In addition, the
procedures should not be overly painful for the patient.

 STATEMENT 2

Right now, Middletown Hospital's main diagnostic tools are CAT scans and
myelograms (spinal taps). The CAT scan fails to make clear diagnoses 60% of the
time. When the CAT scan fails, doctors must resort to the myelogram. While the
myelograms are accurate, this procedure is very painful and sometimes dangerous for
the patient. 

STATEMENT 3

If Middletown Hospital continues to do the two procedures, they will not only be
wasting time and money, which jeopardizes their overall efficiency and earning
potential. Also, undue suffering could lead patients to choose another hospital with
more advanced facilities.

RESEARCH

A new diagnostic technique, nuclear magnetic resonance (NMR) may surpass the
CAT scan in accuracy and reduce the need to resort to the myelogram.  I propose to
research the feasibility of establishing an NMR lab at Middletown hospital. I will
investigate the accuracy, efficiency, and safety of NMR as well as implementation
issues.
Example #2
Audience:

  This proposal is directed to Alfred Academy’s headmaster, Dr. Smith Nyman. Alfred
Academy is a private high school with approximately 200 students in attendance. Dr.
Nyman is the primary liaison between the administration, the students and their
parents. Nyman works with private educational funds and the alumni in order to raise
money for student programs, e.g., a lecture series. Nyman then creates a task force of
parents and students who execute the program for him.

  STATEMENT 1

  In order to continue the fifty-year tradition of pacifist values, Alfred Academy's

administration needs a multifaceted mediation program that includes the
administration, the faculty, the students and the students' parents. This mediation
program needs to (1) serve as a preventative measure, (2) encourage peaceful
interactions, and (3) adapt to the changing needs of the school.

 STATEMENT 2

Currently, Alfred has three mediation, i.e., problem solving, resources: (1) an
unofficial peer mediation group, (2) an unofficial student court, and (3) a lecture
program entitled Peaces. Unfortunately, at the present time, only one of those three
methods are being utilized: lectures.  These lectures are not mandatory as a result, the
majority of students do not attend. Furthermore, neither the peer mediation group nor
the student court are legally certified and are, therefore, not credible resources and
remain unused.

STATEMENT 3

Without an effective mediation program to help Alfred Academy achieve its

educational goals, violence will continue to escalate.  A new, interactive approach to
non-violent problem solving is needed. A long-term mediation-training program may
help the administration to (1) reinstate the school’s pacifist values, (2) prevent
aggressive behavior from escalating, and (3) promote peaceful interactions in the
school. Current mediation programs are both abundant and diverse in nature.

RESEARCH

I propose to examine the advantages and disadvantages of the various current

mediation-training programs to determine which adequately suits Alfred’s present and
future needs.

Example #3
AUDIENCE:
I am writing to Mrs. Kelly.  She is the RAINBOWS director at Hills High School, in
P****, New Jersey.  RAINBOWS is an international organization that is run through
schools, churches, and other organizations.  It helps youth deal with a significant loss
in their life, mainly death or divorce. The program in PHHS is a pilot program that
has been in effect for about 4 years. 

STATEMENT 1

 In order to help individuals learn to deal with grief after a major loss has occurred in
their life, the Spectrum division of the RAINBOWS program in Hills High School
aims to provide each student in the program an environment in which they feel safe,
comfortable, and normal.  The goal of RAINBOWS is to help students learn,
understand, deal with, and move on from their loss.

STATEMENT 2 

However, often, students don't know other students in the optional weekly group
meeting very well, which causes them to be uncomfortable and hesitant about 
speaking.  In the presence of their peers, a student does not feel safe about speaking or
expressing their feelings in fear that they may be judged.  Also, optional weekly
meetings send the message that it is optional to deal with the loss, when in fact the
students must learn about their loss and how to live with it. 

STATEMENT 3

By not feeling comfortable or safe in the program, students are not able to fully learn,
understand, deal with, or move on from their loss.

RESEARCH

I would like to investigate different strategies such as family involvement, individual

meetings, more awareness of the program, and mandatory involvement and see if they
maybe might help a student to recover from their loss.  I would also like to look into
the probability of the implementation of these strategies.

Example #4
STATEMENT 1 

Ideally, the mission of the University Park Allocation Committee is dedicated to

allocating both University General Funds money as well as a portion of the Student
Activity Fee income.  These funds are made available in order to enhance student life
and the out-of-class experience or improve the educational climate at University Park.

STATEMENT 2 

One of the main focuses of the committee is consistency. Unfortunately, consistency

in allocating funds to student organizations requires prior knowledge of previous
allocations and established practices.  The current internal rotation system allows
committee members the ability to experience all four sub-committees, but in an
extremely quick and arbitrary manner. 

STATEMENT 3

Continuing with this current rotation system prevents consistency and causes
decisions to become grossly political, which in turn inhibits the committee of fully
enhancing the out-of-class experience of the students at University Park. Developing a
more informed rotation system could allow the committee to still fulfill the mission
statement of the committee.

RESEARCH

I would like to explore options for a new internal rotation system that would focus on
consistency. To do this, I will consult with representatives from two other big-ten
universities to look at how students are involved in the allocations decisions. I will
also survey existing members of PSU’s committee to find out preferences as well as
how long it would take for each member to familiarize themselves with student
organizations. 

Back to Assignment #1 Main

Handout Courtesy of Gayle Decker

Yenyewe

Remote workers across the company should be able to

communicate with one another seamlessly and effortlessly,
without getting bogged down in unnecessary or irrelevant
messages. (Vision)

Right now, messages tend to get lost or cluttered through

multiple email strings. This results not only in lost
productivity, but also multiple problems in
miscommunication. (Issue statement)

I propose that all employees sign up for Slack and use it

for the majority of in-company communication.
Conversations can be easily searched and organized by
channel. Only more formal communication, like official
announcements, should be sent over email. (Proposed
method)

Over the past 10-15 years, electronic trading platforms have emerged in the depths of
large enterprises as a system of resource allocation between departments. Shoes,
furniture, consumer electronics – there is almost nothing that cannot be ordered on the
Internet. But the consumption in the net has also dark sides. Bogus orders, fake
websites, illegal purchases, etc. are also more frequent. In such a case, the protection
of user data has also become a major challenge in the online world. With the growing
financial services, the type of payment your business accepts also effects the e-
commerce today. Payment solution like My Payment Savvy provides a custom
payment solution for your business which can maximize your conversion. We have
listed some of the major challenges facing e-commerce today, and their solutions.

1. Dependence on Google for traffic

Google is the world leader in search engines, and by extension, responsible for the
visibility of websites. More than 50% of online shops are dependent on Google for
traffic. Despite plans for new search engines that are competing with Google, the
supremacy of Google seems destined to last a few more years. And this can impact e-
merchants when Google changes the rules of the game. Recently, there was the
requirement to switch to HTTPS to make Google Shopping campaigns, in addition to
displaying the non-security of data in the Chrome and Firefox browsers. Unencrypted
web pages that query passwords, bank details or credit card information was marked
as “unsafe” by major browsers such as Google Chrome, Mozilla Firefox, Microsoft
Edge and others. Therefore, it is recommended changing the traffic acquisition
channels of websites, so as not to depend solely on Google for visibility and
transactions.

2.  Absence of online verification of customers

The genuineness of the new customers is questionable in an online portal. When a

visitor signs up, e-websites have nothing but the address and phone number entered
by them. If those visitors are a scam, and if they order cash on delivery purchases to a
fake address, it can be a huge loss for the company. It becomes impossible to contact
them if the number is also fake. Therefore, to be at the safe side, e-websites or online
portals should take all necessary steps required to decline these risks. It is necessary to
recognize bogus orders, fake phone numbers, invalid zip code, etc. Alternatively, they
can install services or software that automates a call on placing an order. These
services also send some verification code through SMS to validate the customers’
identity. It can help in reducing the number of cancellation and bogus orders which
may otherwise be expensive for the business.

3. Maintain Customer Loyalty

Customer loyalty is an important indicator of firm performance. The modern

consumer is so sophisticated and busy that showing content or sending offers that are
not relevant to him at all is a real failure. If the online store does not understand what
the potential consumer wants or does not consider it necessary to understand, then it
may cost the store a customer. Unlike normal street shopping, the buyer and seller do
not see each other in online shopping. Therefore, it is difficult to build trust between
them. Building trust, therefore, can take some time and transactions in online shops.
You can also earn customers loyalty through excellent customer service. By
displaying your address, answering calls, adding a live chat option on your website,
etc. can also help you in building trust among customers.

4. Customer Service

In a general store, the customer leaves the store with his product. However, this
situation is not the same as e-commerce. In e-shopping, the user sends you money for
a product he does not have yet. He waits impatiently for the arrival of his order.
Problems can still arise if the delivery service provider has lost a package, or the
product has been damaged during transport, or you have simply fallen behind before
shipping. This can cause customer dissatisfaction, which will then need to be
managed. The idea is to be transparent and responsive and to keep customers abreast
of the situation as soon as possible. If you are in a discussion with the delivery
provider to find a lost package, keep the user informed of your steps, do not wait for
him to come to the news. Similarly, if you are late in your parcel preparations, inform
him of the expected date of shipment. If the product has been damaged during
transport, quickly propose a solution according to your legal notice, whether a total or
partial refund or a replacement. Internet users who have received good
communication in the case of litigation generally keep good relations with the e-
commerce site, 95% of the negative opinions turn into loyal customers if a solution
has been made. The responsiveness of the after-sales service greatly affects the image
of a company.

5. Plan your digital strategy

In the continuity of the multidisciplinary profession, the e-merchant forgets to

promote and animate his merchant site that should be built by using a proper
eCommerce platform as Wix or Shopify. E-merchants should determine the
communication channels to be used (social networks, newsletters, partnerships, online
advertising) and define the messages to be transmitted, set up editorial planning,
create the visuals, etc. Getting help from an outside provider for some of these tasks
can help to free up time for managing your e-commerce site.

The everyday life of the e-shopkeeper is filled with things to manage, to plan, and lots
of small tasks to do. As such, it requires outstanding strategies to survive in the e-
commerce competition.