E-Business
(1793 words)
In general, the term e-business refers to the application of a variety of information technologies to the delivery of an organization’s mission. In particular, e-business assumes the application of Internet, extranets, intranets, and the World Wide Web to an organization’s processes and delivery systems. E-business was first coined by the CEO of IBM, in 1997. E-business is the conduct of business on the Internet. E-business methods allow companies to link their internal and external data processing systems more efficiently. It enables them to work more closely with their partners and suppliers. It also allows them to better satisfy the customers’ needs and meet the expectations of their clients.
Increasingly e-business assumes the integration of these technologies with a variety of related technologies (data warehousing, data mining, intelligent agents, and so forth) to replace physical processes with new processes that can be accomplished over networks. Some even think of e-business as an evolutionary step that reflects a progression of capabilities from online catalogues and electronic payments at the earliest stages of effort, to the adoption of so-called personalization technologies and supply-chain integration at later stages. Industry analysts and pundits are advising that ultimately (and perhaps soon) this ubiquitous e-prefixing of every human activity will abate as the majority of enterprises accomplish this integration and replacement of technologies and processes and as “e-business” becomes indistinguishable from business.
E-business is used as the generic and overarching term signifying all manner of internal and external operations and processes conducted over networks. In general, e-business also assumes the use of the World Wide Web as an infrastructure for “doing business” (for example, identifying goods or services, selecting a desired product, ordering a product, and in some cases actually delivering the product). According to (1999), “the dominant idea of e-business is that an organization “gains an advantage by being able to serve customers wherever they happen to be—in a store, on the phone, on-line, or offline”( p. 87).
E-business focuses more on the nature of the business. E-business works via electronic means. There are different business activities that can be carried forth in electronic form. They are as follows: Recruitment, Marketing, Customer support and education, Information resource sharing, Employee training, gathering of information for strategic planning, Inventory and Payroll and benefits management. It also incorporates electronic commerce or e-commerce. E-commerce has a narrower meaning than e-business. It primarily refers to the use of the Internet in ordering or paying for products or services. E-business covers the full range of business activities that can happen or be assisted via e-mail or the World Wide Web.
In order to fully understand E-business, let us first look at the history of the Internet and the development of Electronic business and Electronic commerce. And how the Internet is shaping businesses globally.
WHAT IS INTERNET?
It is made up of countless thousands of computers that are connected together by means of telecommunications systems. Not all these computers will be connected at any one time and hence it is impossible to define its size and presence. When one user’s computer is in communication with another user’s computer, the information that is sent and received by each will travel in different and unpredictable routes and will pass through many computers on its journey. All the computers and communications services providers that are not either the original sender or the final recipient of the information are intermediaries or `conduits’.
Internet connectivity is commonly established by using an Internet Service Provider (ISP). ISP’s are organisations that have a permanent presence on the Internet and provide a fixed line or dial-up service. Some ISP’s make a charge for this service, but many do not. However, most businesses will require a website, and hence web space on the ISP’s server, and this is normally a chargeable service. Businesses wishing to establish a web presence for the first time are advised to consult the trade press (business Internet magazines such as The Industry Standard) for information on ISP’s (Carey, 2001).
Internet and Worldwide Web Technologies:
The microcomputer or Personal Computer (PC) forms the basis of e-Commerce. The Internet would not have the wide reach that it has into peoples’ homes in the absence of the PC. Most office PCs are linked to a computer network and PCs at home are connected to the Internet via modems or dedicated data transfer cables.
Local area networks and wide area networks
PCs on local area networks (LANs) and wide area networks (WANs) are connected to the Internet. LANs and WANs are digital computer networks that connect PCs to enable sharing of information between separate computers. LANs are limited to a geographical area such as an office, whereas WANs connect computers over a wider geographical area. The computers on a LAN or WAN share information in the form of addressed packets of data. The capacity of a single computer is increased by connecting it to a LAN or WAN, as it can share computer programs and information. A computer that is linked to a network can download and use computer programs and share storage and printing facilities, and take advantage of network capabilities for sending and receiving data and information.
Intranet
An intranet consists of networked internal connection of computers owned by an organization and makes use of Web technology. An intranet offers several benefits to an organization: improved sharing and communication of information, open standards and cross-platform collaboration. For example, a car manufacturing company may connect its information systems on purchasing with its accounting information systems to form an intranet for sharing and processing information between two departments in the company.
Extranet
An extranet is used for business-to-business (B2B) e-Commerce. It is the networked connection of computers of two or more companies. It is a private communication system to support trade and is used for communication and transactions between business partners, suppliers or special customers. For example, a car manufacturing company may connect its computers with its various suppliers of components for the cars it makes. Another example is the airline industry’s OneWorld network, which enables customers to transfer seamlessly between airlines to reach their destinations.
E-business Models:
Different organizations that go online choose which kind of electronic business model suit their business goals. The most adopted e-business models are as follows:
E-shops: Online shop lets the consumers purchase goods or services over the Internet. It is an e-commerce application used for business-to-business e-commerce or business-to-consumer e-commerce. It is popular because it is fast and easy to use. Another advantage is the consumers have the power to compare and search for better deals over the net.
E-procurement: E-procurement, sometimes referred as supplier exchange, is the business-to-business purchase and sale of supplies and services over the net. It also allows purchase and sale of networking systems like Electronic Data Interchange and Enterprise Resource Planning. Registered users are allowed to use e-procurement web sites to look for buyers or sellers of goods and services.
E-auction: E-auction is also called reverse auction because the role of the buyer and seller are reversed. This tool that is being used in industrial business-to-business procurement aims to drive prices downward. Unlike in traditional auctions, in reverse auction the sellers are the ones competing to obtain business.
Virtual Communities: A virtual community is a group of people that communicate or interact over the net.
Collaboration Platforms: Collaboration platforms allow groups of people to interact and work together for a common business goal. Communication is supported by unified electronic platforms through a variety of devices and channels. The major elements of a collaboration platform today are messaging, team collaboration and real-time collaboration.
Third-party Marketplaces: A third party market place allows sellers to survey their goods alongside with a third party market place’s offerings (i.e. Amazon.com) on a fixed price. The buyers are allowed to give feedbacks regarding the transactions made. If the feedback is negative, the seller’s products may be affected and other buyers may not purchase the product.
Value-chain Service Providers: A virtual value chain is a business model for the information services industry.
Planning for E- Business: E-business Strategies
In order for an e-business plan to succeed, the technology team of the company must be fully informed about the goals of the business and the management must be informed about the capabilities of the technology. The company must work on at least four different projects to fully develop the e-business opportunities. These projects are as follows;
Infrastructure and organizational development: This involves people, technology and knowledge. Technology includes 1. Local connectivity – intranets and local area networks 2. Broad Area connectivity – Internet 3. Universal Connectivity – World Wide Web.
Restructuring and integration of network based components: This project involves interface between an organization and it’s business partners. The goal of this project is to achieve the maximum efficiency of the organization – trading partner relations. The company’s performance can be monitored. The processes are continuously improved to achieve more and more efficiency. Organizations can look for ways to involve suppliers and consumers electronically.
New Process and market development: The Company must develop new processes or markets to make its e-business venture successful. Projects that seek to develop new ways of doing business that will become the standard in the future must be employed.
Capitalizing on new opportunities in the knowledge domain: The most successful businesses in e-business are the support businesses that grow up to support the development of e-business.
In the past, success was largely based on the size of a company’s investment, its location, its physical assets, or its history. Today, those criteria have been replaced by data, knowledge, and relationships. The current generation of successful companies is mining data and collating it into useful information and knowledge. Furthermore, these companies are using that knowledge to manage their relationships with suppliers, customers, and other business partners, seeking out new partners and finding new ways to work with old ones, moving from cooperation to collaboration, and using the right tools and skills to operate more efficiently and effectively. The end result is that customers are getting the highest value they have ever received, in the form of the best products and services.
There are four strategic options for an existing company seeking to become an e-business. One is to integrate e-business throughout the company. A second is to find an e-business partner who can take the company’s products and/or services and leverage them in an e-business model. A third is to spin off a separate e-business. And a fourth is to completely transform the company, rejecting the old physical model and recreating the enterprise as an e-business. Each of these models offers businesses opportunities in eight areas of competitive improvement Improved efficiency, Integrated processes, Reduced process costs, Extended reach, Reduced cycle time, Improved customer satisfaction, Reduced staff costs, Enhanced revenue.