E-Business and E-Commerce; Benefits, limitations and Barriers in E Commerce

Part-2

E-business & E-commerce

Electronic business or e-business is the use of information and communication technologies ICT to improve business. It is the conduct of business on the Internet, in supply-chain planning, tracking, fulfillment, invoicing, and payment. E-business goes beyond a Web site on the internet to affect all aspects of business from strategy and process to trading partners and the ultimate consumer. Electronic commerce or e-commerce is where business transactions take place via electronic communication networks, especially the Internet.

E-commerce vs. E-business

The main difference between them is that ecommerce defines interaction between organizations and their customers, clients, or constituents. On the other hand, e-business is broader term that also encompasses an organizations internal operations. Electronic commerce describes the buying and selling of products, services, and information via computer networks including the Internet. Where E-Business describes the broadest definition of EC. It includes buying and selling of products and services, servicing customers, collaborating with business partners, and conducting other intra-business tasks.

E-business and e-commerce

Three alternative definitions of the relationship between e-business and e-commerce

Features of E-commerce Technology

Features E-commerce:
is ubiquitous has global reach operates according to universal standards provides information richness is interactive increases information density permits personalization

Advantages of E-Commerce
Lower cost to the E-merchant
It reduces logistical problems and give small business equal visibility with giants like amazon.com. Every financial transaction gets converted into an electronic process. The sooner the conversion the more cost effective is the transaction.

Economy
There is no rental of physical store space, insurance, or infrastructure investment

Higher margins
As compared to manual transactions, e-transactions are flexible and save time. Example conventional air ticket would cost $8 while eticket would cost $1.

Advantages of E-Commerce
Better customer service
It provides a quicker customer service. Adding customer service on the web is a competitive advantage.

Quick comparison shopping

Helps consumer to comparison shop.

Productivity gains
Weaving a web through out an organization means improved productivity.

Teamwork
It means working together. E-mail is one example of how people collaborate to exchange information

Advantages of E-Commerce
Growth in knowledge markets
Helps create knowledge market like: small groups inside big firms can be created to develop new ideas and look for new trends.

Information sharing, convenience and control

Improves information sharing among merchants and customers, promote quick and just in time delivery.

Customization
Digital products are easy to reorganize, revise, or edit.

Advantages of E-Commerce
For the seller
Increases sales/decreases cost Makes promotion easier for smaller firms Can be used to reach narrow market segments

For the buyer

Makes it easier to obtain competitive bids Provides a wider range of choices Provides an easy way to customize the level of detail in the information obtained

Advantages of E-Commerce
In general:
Increases the speed and accuracy with which businesses can exchange information Electronic payments (tax refunds, paychecks, etc.) cost less to issue and are more secure Can make products and services available in remote areas Enables people to work from home, providing scheduling flexibility

Issues and Constraints in E-Commerce

The Cost Factor
To set up an E-Commerce infrastructure beyond a sophisticated interactive web, we need networks, servers, terminals, software, staffing and training.

Security
With spamming, spying, file corruption, and malicious misuse, no company can afford to do business online without protection via firewalls and specialized antivirus products.

System and Data Integrity

Data protection and the integrity of the system that handles the data are serious concerns, as virus attacks can affect data, storage problems and system performance.

Issues and Constraints in E-Commerce

System Scalability
If the company expects 2million customers and 6 millions shows up, website performance is bound to experience degradation, slowdown and eventually loss of customer. Website must be scalable and upgradeable on regular basis.

E-Commerce is not free

Its usage for small retailers is still in question.

Fulfillment and customer relations problems

Shipping delays, merchandise mix-ups, and website crashing. Interpersonal part of e-commerce between e-merchants and customers continues to be setback.

Issues and Constraints in E-Commerce

Products people resists buying online:
Like furniture.com to purchase a sofa you need to sit on it to feel the texture and fabric etc for comfort. But commodities like airline tickets, books, brand name hardware etc. are standardized items, buying them through internet becomes a matter of price and convenience.

Cultural, language and trust issues:

A firm launching a product in a new country must be aware of the culture as well as the language of that culture. Example the in European country odd flowers are gifted while in North America there is the concept of a dozen of flowers.

Issues and Constraints in E-Commerce

Corporate vulnerability:
The availability product details, catalogs and information about a business to its competition leads to vulnerability. The idea of extracting business intelligence from the competitors web page is called Web Farming. Web Farming systematically refining information resources on the web for business intelligence gathering.

Lack of blueprint for handling E-Commerce:

Surveys conducted in 2003 and 2004 conclude that few managers have e-commerce skills, Internet experience, or foresight.

Benefits of the Internet

Marketing and Selling Products and Services:
The buy and sell aspect of Internet has attracted more media attention. Internet is Marketing heaven when it comes to advertising and reaching customer quickly and cheaply.

Doing business fast:

E-selling is conducted in minutes rather than hours or days. Speed compresses business processes and promotes the growth of a customer base.

Benefits of the Internet

Gathering options and trying out new ideas
Internet is an ideal place for trying out new ideas at low cost. Interactive surveys provide quick feedback. Companies unsure about going all out to do business on Internet can start small.

Leveling the playing field

Internet is a great equalizer. It is a benign way of expanding a business and creating new selling opportunities.

Benefits of the Internet

Promoting a paper free environment
Catalogs, promotional material, reports etc can be placed on intranet and retrieved or circulated electronically at any time by authorized personnel.

Providing superior customer service and support resources

Most web sites generate customer feedbacks via comments, suggestions and complaints. Challenge is to provide adequate staff to address feedback in a timely fashion. Common support resource is FAQ list.

Efficiency and unequal cost effectiveness

Benefits of the Internet

Supporting managerial functions, spreading ideas, ease of technical support Planning, Organizing, Directing and Controlling requires managers to collect, evaluate and distribute management information- e-mail, chat rooms, discussion groups, online interactive sessions. Example IBM- through Internet offer customers support Technical support Fixes bugs Handles software upgrades Research and Development Groups.

Benefits of the Internet

Triggering new business Mere Web presence is bound to trigger one type of business activity or another. Exp: a tiny commercial filter maker in Lynchburg, Virginia, landed a $6 million contract with the govt. of Saudi Arabia from the internet. Providing web services Technology is enabler of e-services or web service. Web services are essentially business services, composed of standards that allow different platforms-OS and languages to exchange information or carry out business process together. It is a customer centric concept.

Limitations of Internet
Security and Privacy How do I know I am paying for a product on secure line. How do I know the website assures me privacy for a product I am buying. Fakes and Forgeries The availability of Internet has spawned the online sale of fake ID documents. Cyber Terrorism The legal environment is uncertain: Courts and legislators are trying to catch up.

Limitations of Internet
Problems and Stress
Upgrade and maintain more complex network to ensure site performance. Problems processing and fulfilling online customer order. Maintain and upgrading website security. Despite sophisticated FAQs, e-mail and other technologies, customers still have problems with simple issues like returning unwanted items and securing information. Some business processes are not suited to e-commerce, even with improvements in technology

Limitations of Internet
Many products and services require a critical mass of potential buyers (e.g. online grocers) Costs and returns on e-commerce can be difficult to quantify and estimate Cultural impediments: People are reluctant to change in order to integrate new technology

Abuses in the workplace:

Non-work related surfing called Cyberloafing.