LEARNING
FOR "WHAT IS E-BUSINESS?"
In this piece of learning, we'll introduce you to ideas and concepts in e-Business. We'll do this by:
- Asking what e-Business really is
- Looking at the historical and technological predecessors to e-Business
- Looking at what makes an e-Business today
- Looking at some important players in the development of e-Business since we first started using the word e-Business
- Exploring notions of cyberspace and the structure of organisations
- Investigating the importance of navigation and search
- Exploring the development of new and old business processes in e-Business
- Looking at benefits for consumers and businesses in e-Business
What is e-Business?
There are a number of ways of defining e-Business. It can often be referred to as e-Commerce or digital commerce or business. If you're aware of all of these different terms, you'll begin to understand the common themes of e-Business.
The simplest definition of e-Business is "doing business electronically". This is perhaps not enough. Why do you suppose this is not adequate?
- Now do Task 1 from the Tasks Page
Where does e-Business come from?
We know that commerce has gone on between humans in civilised society for tens of thousands of years. Commerce itself is the trading, buying and selling of goods and services. In more depth, commerce also involves ensuring the supply and availability of stock (supply chain management), ensuring transport and delivery support (logistics), and ensuring payment (transactions).
Electronic Business (e-Business) starts to address how all of these particular components of commerce can be dealt with 'electronically'.
Historically, the first signs of the e-Business world came in the form of electronic funds transfer. This allowed banks and organisations to transfer money between each other, without the need for a physical paperwork and money activity to take place. In many developed countries, organisations make salary payments for employees electronically.
The second vanguard of e-Business was the development of Electronic Data Interchange (EDI), which allowed organisations to conduct business transactions such as ordering, invoicing and paying. EDI is expensive to set up and own, so the development of technologies such as the World Wide Web over publicly accessible networks means that EDI has not taken off in the same way that generic e-Business has.
What is e-Business like today?
It's important to know that most e-Business is about buying and selling goods and services online and there's a simple process that demonstrates this.
- Now do Task 2 from the Tasks Page
What are the different types of e-Business?
There are a few commentators
who have produced some widely accepted ways of categorizing the different types
of e-Business. Turban,
Have a look at this diagram on Different Types of e-Business.
B2B
This is where the seller is a business and the buyer is another business. B2B relationships break down into buyer-oriented (where the system is geared to the needs of the buying business), seller-oriented (where the system is geared to the needs of the selling business) and a recent innovation in commerce, the virtual marketplace - where the systems is geared to the collective needs of groups of buyers and sellers. These sites are often difficult to observe, as they tend not to be available for public consumption.
B2C
This is where the seller is a business and the buyer is an individual consumer. This is often done in the form of retailing or online shops. Sellers tend to dictate the terms of the trade and the consumer tends to make a decision to purchase or not. This is perhaps best demonstrated by the book retail site Amazon.
C2B
This is where the seller is a consumer and the buyer is business. This is often done in the form of tendering or bargaining. The consumer provides details of their particular needs, and a variety of businesses may respond with specifications and prices. An example of this is Expedia, which provides flight ticket prices from differing airlines at different prices and specifications.
C2C
This is where the seller is an individual consumer and the buyer is another consumer. This often equates to the "private ads" in a newspaper where individuals are selling to other individuals. In an online situation, this might be demonstrated by an online auction site, such as eBay.
We'll look at these perspectives in more detail later
- Now do Task 3 from the Tasks Page
It's worth having a little understanding of who the important players in the game have been.
· Now do Tasks 4, 5 and 6 from the Tasks Page
The Virtual World and Organisations
The virtual world is a place where the traditional boundaries and processes that exist in organisations no longer seem to apply. In the virtual world (to name but a few), participants are not affected by issues such as where the physical border of one country or another is, or what time of the day a certain activity or transaction can take place.
This has an impact on how organisations shape up.
The traditional model of an organisation's structure is known as the Modern Organisation. It is likely to be made from the familiar hierarchical business structure. This approach denoted a top-down, highly structured and highly centralised organisation - but it also demonstrated, on many occasions, organisations which were also inflexible.
The change in the business environment through the late 80s and 90s was even more significantly affected by the introduction and widespread use of IT. One of the impacts of IT has been the adaptation of organisations to take advantage of the facilities it offered, and from this we get the emergence of "the virtual organisation".
- Now do Task 7 from the Tasks Page
So what keeps a virtual organisation 'in business?' There are probably about three or four things that are entrenched in the virtual organisation, with new things added every day:
- Email is the predominant communication tool
- There is extensive use of a group-working (or collaboration) technology
- There is extensive use of mobile communication tools
When we wrote this work, instant messaging technologies were a hot topic - but many organisations were worrying about the effect on their businesses in terms of productivity and security.
What do e-Businesses need to consider?
By being an Internet Business, the e-Business has to consider three things in its first wave of thinking.
The first is "How far will we reach?" Traditionally, businesses have measured their reach in terms of kilometres from their physical location. This has obviously grown with increasing globalisation, but the reach of an e-Business is limited only by the extent of the information infrastructure. So any e-Business can occupy a business space representing the globe.
"How rich can we be?" e-Businesses have an opportunity to provide much more information and service to customers than was previously possible. Such richness can also be personalised and made individual to each customer.
"Who do we affiliate to?" Whereas a traditional bricks-and-mortar business would have been closely linked with a supplier and their goods and services, an e-Business might become more closely affiliated with its customers. As customers find they have more choice and freedom in a virtual environment, the e-Business needs to make stronger gestures towards the loyalty of those customers.
Business processes in the Internet age
There are certain business processes which are evolving as a result of the Internet. These are important to e-Business opportunities and must be considered carefully. The processes in question are Business Process Re-engineering (BPR), Supply-chain management and procurement.
- Now do Task 8 from the Tasks Page
There seem to be a standard set of benefits that give e-Business opportunities an edge over traditional bricks-and-mortar business.
The first is a dynamic environment in which to interact with customers - people can actively investigate products and services in an interactive style, which they would not have previously been able to do with something like a paper catalogue. In addition, there is the increased "reach" of an e-Business, which is no longer contained within geographical, temporal or other manmade boundaries.
An e-Business venture may have much lower costs, particularly in things such as storage, distribution and service provision. These lower costs come about through situations such as disintermediation - whereby you remove the "middleman" - by speaking directly to customers and suppliers. Alternatively, there are opportunities for re-intermediation - whereby you become a source for buyers and sellers in a situation where no such source existed before. Akin to this is the concept of an infomediary, whereby the e-Business operates as an intermediate operator of information, the information being the commodity of sale.
- Now do Tasks 9 and 10 from the Tasks Page