E-BUSINESS

MS-114
 Books
Text Books:
• Whitley, David (2000). E-Commerce Strategy, Technologies and
Applications. Tata McGraw Hill.
• Schneider Gary P. and Perry, James T (1st Edition 2000). Electronic
Commerce. Thomson Learning
• Bajaj, Kamlesh K and Nag, Debjani (Ist Edition 1999). E-Commerce: The
Cutting Edge of Business. Tata McGraw Hill, Publishing Company Ltd., New
Delhi.

Reference Books:
• Treese G. Winfield & Stewart C. Lawrance (Ist, Edition 1999). Designing
Systems for Internet Commerce. Addison Wesley.
• Trepper Charles (Ist Edition 2000). E-Commerce Strategies. Prentice Hall of
India, New Delhi.
• Rehman S.M. & Raisinghania (Ist Edition 2000). Electronic Commerce
Opportunity & Challenges. Idea Group Publishing, USA.
• Knapp C. Michel (Ist Edition, 2003). E-commerce Real Issues & Cases.
Thomson Learning.
 E-BUSINESS
• Electronic business, commonly referred to as "eBusiness" or "e-
business", may be defined as the utilization of information and
communication technologies (ICT) in support of all the activities of
business.
• E-Commerce constitutes the exchange of products and services
between businesses, groups and individuals and can be seen as one of
the essential activities of any business. Electronic commerce focuses on
the use of ICT to enable the external activities and relationships of the
business with individuals, groups and other businesses .
• Basically, electronic commerce (EC) is the process of buying,
transferring, or exchanging products, services, and/or information via
computer networks, including the internet. EC can also be benefited
from many perspective including business process, service, learning,
collaborative, community. EC is often confused with e-business.
• The term "e-Business" therefore refers to the integration, within the
company, of tools based on information and communication
technologies (generally referred to as business software) to improve
their functioning in order to create value for the enterprise, its clients,
and its partners.
 Cont..
• In practice, E-business is more than just e-commerce.
While e-business refers to more strategic focus with
an emphasis on the functions that occur using
electronic capabilities, e-commerce is a subset of an
overall e-business strategy.
• E-commerce seeks to add revenue streams using the
World Wide Web or the Internet to build and enhance
relationships with clients and partners and to improve
efficiency using the Empty Vessel strategy (Empty
vessel or the empty vessel approach is a business
term describing the negative effects of how one ends
up with a worthless outcome when trying to please
everyone ). Often, e-commerce involves the
application of knowledge management systems.
 Organizational Perspective
It is widely acknowledged today that new
technologies, in particular access to the Internet,
tend to modify communication between the
different players in the professional world, notably:
• relationships between the enterprise and its
clients,
• the internal functioning of the enterprise,
including enterprise-employee relationships,
• the relationship of the enterprise with its different
partners and suppliers.
 Cont..
• E-Business no longer only applies to virtual
companies (called click and mortar) all of whose
activities are based on the Net, but also to
traditional companies (called brick and mortar )
• The term e-Commerce (also called Electronic
commerce), which is frequently mixed up with the
term e-Business, as a matter of fact, only covers
one aspect of e-Business, i.e. the use of an
electronic support for the commercial relationship
between a company and individuals.
 Creation of value
The goal of any e-Business project is to create value. Value can be
created in different manners:
• As a result of an increase in margins, i.e. a reduction in
production costs or an increase in profits. E-Business makes it
possible to achieve this in a number of different ways:
– Positioning on new markets
– Increasing the quality of products or services
– Prospecting new clients
– Increasing customer loyalty
– Increasing the efficiency of internal functioning
• As a result of increased staff motivation. The transition from a
traditional activity to an e-Business activity ideally makes it possible
to motivate associates to the extent that:
– The overall strategy is more visible for the employees and favors a
common culture
– The mode of functioning implies that the players assume responsibilities
– Teamwork favors improvement of competences
 Cont..
• As a result of customer satisfaction. As a matter of
fact, e-Business favors:
– a drop in prices in connection with an increase in productivity
– improved listening to clients
– products and services that are suitable for the clients' needs
– a mode of functioning that is transparent for the user
• As a result of privileged relationships with the
partners. The creation of communication channels with
the suppliers permits:
– Increased familiarity with each other
– Increased responsiveness
– Improved anticipation capacities
– Sharing of resources that is beneficial for both parties
An e-Business project can therefore only work as soon as it
adds value to the company, but also to its staff, its
clients, and partners.
 Time To Market
• "Time To Market" is the time that is
necessary to bring a product on the
market from a time an idea was put
forward .Worldwide, new technologies
provide an incredible source of inspiration
to formalize ideas while making Time-To-
Market even more critical because of the
rapid flow of information and speedy
competition.
 Reduction of costs and ROI
• The use of new technologies for the functioning
of an enterprise makes it possible to reduce the
costs on the different levels of its organization in
time.
• Nonetheless, implementation of such a project is
generally very costly and necessarily leads to
organizational changes, which may cause
upheaval in the practices of its employees. It is
therefore essential to determine the return on
investment (ROI) of such a project, i.e. the
difference between the expected profits and the
required overall investment, taking into account
the cost of human resources mobilized.
 Characterization of the e-Business
• A company can be viewed as an entity
providing products or services to clients with
the support of products or services of partners
in a constantly changing environment.
The functioning of an enterprise can be roughly
modeled in accordance with a set of
interacting functions, which are commonly
classified in three categories:
 Cont..
• Performance functions, which represent the core of its
activity (core business), i.e. the production of goods or
services. They pertain to activities of production, stock
management, and purchasing (purchasing function);
• The management functions, which cover all strategic
functions of management of the company; they cover
general management of the company, the human
resources (HR) management functions as well as the
financial and accounting management functions;
• The support functions, which support the performance
functions to ensure proper functioning of the enterprise.
Support functions cover all activities related with sales (in
certain cases, they are part of the core business) as well
as all activities that are transversal to the organization,
such as management of technological infrastructures (IT,
Information Technology function).
What does E-business Involve ?
E-business involves business processes spanning
the entire value chain:
• Electronic purchasing and supply chain
management
• Processing orders electronically,
• Handling customer service, and cooperating with
business partners.
• Special technical standards for e-business facilitate
the exchange of data between companies.
• E-business software solutions allow the integration
of intra and inter firm business processes.
• E-business can be conducted using the Web, the
Internet, intranets, extranets, or some combination
of these.
ORGANIZATIONAL WORK FLOW
E-Business Application Components
Enterprise Applications can be divided into three components:
1)Business systems:
– customer relationship management
– enterprise resource planning
– document management systems
– human resources management
2)Internal communication and collaboration:
– VoIP
– content management system
– e-mail
– voice mail
– Web conferencing
– Digital work flows (or business process management)
3)Electronic commerce - business-to-business electronic
commerce (B2B) or business-to-consumer electronic
commerce (B2C):
– internet shop
– supply chain management
– online marketing
– offline marketing
 E-Business Models
When organizations go online, they have to decide which e-business models best suit
their goals. [A business model is defined as the organization of product, service
and information flows, and the source of revenues and benefits for suppliers and
customers. The concept of e-business model is the same but used in the online
presence. The following is a list of the currently most adopted e-business models
such as:
 E-shops
 E-commerce
 E-procurement
 E-malls
 E-auctions
 Virtual Communities
 Collaboration Platforms
 Third-party Marketplaces
 Value-chain Integrators
 Value-chain Service Providers
 Information Brokerage
 Telecommunication
 E-BUSINESS CATEGORIES
Enterprises are generally characterized by the type of commercial
relationships they maintain. Dedicated terms therefore exist to quality this
type of relationship:
• B To B (Business To Business, sometimes written B2B) means a
commercial relationship business to business based on the use of a
numerical support for the exchange of information.
• B To C (Business To Consumer, sometimes wrritten B2C) means a
relationship between a company and the public at large (individuals). This
is called electronic commerce, whose definition is not limited to sales, but
rather covers all possible exchanges between a company and its clients,
from the request for an estimate to after-sales service;
• B To A (Business To Administration, sometimes written B2A) means a
relationship between a company and the public sector (tax administration,
etc.) based on numerical exchange mechanisms (teleprocedures, electronic
forms, etc.).
• As an extension of these concepts, the term B To E (Business To
Employees, sometimes written B2E) has also emerged to refer to the
relationship between a company and its employees, in particular through
the provision of forms directed at them for managing their carreer,
vacation, or their relationship with the company committee.
 CONT..
Roughly dividing the world into providers/producers and
consumers/clients one can classify e-businesses into the
following categories:
• business-to-business (B2B)
• business-to-consumer (B2C)
• business-to-employee (B2E)
• business-to-government (B2G)
• government-to-business (G2B)
• government-to-government (G2G)
• government-to-citizen (G2C)
• consumer-to-consumer (C2C)
• consumer-to-business (C2B)
 How Does e-Business Work?
• E-Business refers to the employment of
information and communication technologies in
business processes and is more than just the
employment of computers in business
processes. Besides computers, other tools
through which information and communication
technologies can be applied in business include
fax, mobile phones and PDAs (personal digital
assistants), though the Internet (and Intranets)
remain the main avenues through which
information and communication technologies are
applied in business processes.
 Advantages of e-Business
E-business has many advantages,
• The possibility for a bigger marketing outreach (thanks to the
Internet)
• Quicker access to information for decision-making purposes
• better customer support and reduced transaction costs, among
others.
• Operationally, e-business can improve the way a company obtains
its raw material (through e-procurement, for instance), the way a
company processes the raw material into a complete product
(through the use of an enterprise resource planning system) and the
way a company subsequently markets the end product (through the
use of an e-commerce system).
E-business has come to be seen as the only way of doing business
in some industries, and a business organization that doesn't adopt
the model risks losing customers, clients and profit.
• In the coming years, companies will either
be E-Business or no business”

Andy Grove, past CEO of Intel