How important is the e-business in todays world and in what ways does it affect

decision making in corporations.

Student name: Rasheed Olawale Soetan, Student no: 7254432
University of Southcentral LosAngeles
INTRODUCTION
Technological breakthrough in such areas as fax machines, telephone, video
player, audio devices and televisions took many years to commercialize and
measure their impacts on business compared to this breakthroughs,
telecommunications, information communication technology, miniaturization,
computers and internet went through shorter product life styles and achieved
widespread diffusion and reformed the nature of business operation and
enhanced competitive business environment instantly. This technological
advancement has resulted in evolution and innovation of many products,
services and business processes. One of them is the emergence of e-commerce
or electronic business. The internet had resulted in emergence of virtual markets
with four primary distinctive characteristics, which are real time, shared, open
and global. The application of internet is divided into three major activities that
are publishing corporate information, conducting electronic commerce and
business transformation. The greatest feature of the internet is absence of
intermediaries; the manufacturers are able to sell their products relatively easier
to buyers via the internet. E-business today is no longer a technological issue,
but also business issue- commerce a core aspect of e-business involves a
number of forms, varying level of cost and complexities, depending on the
business need.
In the past few years, enterprises across the globe have experienced significant
changes in their business information system (BIS). Huge investments were
made in business enterprise resource planning , system implementations but still
they struggle to get timely information that is needed to make effective business
decisions and to ensure continuous growth of enterprises. Placing e in front
of any process or function seemed to be the magic prescription for never ending
story of success and rapid returns for enterprises. E-business, e-procurement, esales, e-payment-banking, e-CRM, e-CAD, e-delivery are just a few.
The emergence of the internet and e-business throughout the world has been
contributing such a variety medium in doing business as well as people lifestyle.

AN OVERVIEW OF KEY TERMS

Definitions of e-business and e-commerce
E-business has many definitions some of which are explored below; according to
Elizabeth Hardcastle in 2008 e-business involves several key activities including
improving business processes , enhancing communication and providing the

means to carry out business transactions securely.E-business is a part of internet

economy which encompasses all of the activities involved in using the internet
for commerce(1).
Electronic business commonly referred to as e-Business or e-business ``,
may be defined as the utilization of (ICT) in support of all the activities of
business. 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.( 2 ).
E-business is buying and selling, servicing customers, collaborating with business
partners and conducting electronic transactions within an organisation. (3)
E-business refers primarily to the digital enablement of transactions and
processes within a firm, involving only the information systems under the control
of the firm. They are those activities other than buying and selling via electronic
channels.(4)
E-business is all about time cycle speed, globalisation, enhanced productivity,
reaching new customers and sharing knowledge across institutions for
competitive advantage.(5)
E-COMMERCE
A common activity associated with e- business is e-commerce which can be
described as using technology to conduct business transactions, such as buying
and selling goods and services.
However e- commerce involves more than merely conducting electronic
transactions: it also encompasses a wide range of associated activities, such as
after sales support and even logistics.
E-business can take a varieties of forms, including electronic data interchange
(EDI), direct link ups with suppliers, internet, intranet, extranet, electronic
catalogue ordering and e-mail.
An e-business model must have:
1. A shared digital business infrastructure including digital production and
distribution technologies (broadband/wireless networks ,content creation
technologies and information management systems)which will allow
business participants to create and utilize network economies of scale and
scope.
2. A sophisticated model for operations, including integrated value chainsboth supply and buy chains.
3. An e-business management model consisting of business teams and or
partnerships; and

4. Policy , regulatory and social systems that is business policies consistent

with e-commerce laws, teleworking / virtual work, distance learning
,incentive schemes among others.

E-commerce activities can be broken down into the following basic types :
-

Business-to-business (B2B).Transactions take place between

companies.Approximately 80percent of all e-commerce is of this type.
Business-to- consumer (B2C). Companies sell products directly to
consumers.B2C can involve activities such as product research ( where
consumers gather information and compare prices)and electronic delivery(
where information products are delivered to consumers via e-mail or other
means).
Business to-government (B2G).Transactions take place between
companies and public sector organizations.
Consumer -to- consumer (C2C).Transactions take place between private
individuals. Perhaps the best examples of C2C commerce are online
auction sites and peer-to-peer systems.
Mobile Commerce (m-commerce).M- commerce is a relatively new
development and involves selling goods or services via wireless
technology, especially mobile phones.

E-business processes are usually quite simple. In most instances, it is the buyers
who dictate terms, yet many systems are very supply-centric. Within some
sectors, notably aerospace, there have been a number of e-business portals and
hubs to encourage e-business, particularly for those within existing supply
chains. (11)
Adoption steps of e-business services involves:
Step 1.

Messaging (internal and external e-mail).

2.

Marketing and stock availability checks.

3.

Online ordering.

4.

Online payment.

5.

Monitor order progress.

6.

E- business.

Source DTI (2000) Chaffey 2nd Edition.

Six e-business strategic decisions :

-E-business priorities

-Business and revenue models

-Market place restructuring
-Market and product development
-Positioning and differentiation
-Organisational restructuring
Source: Chaffey (2007) fig 5.6

CORPORATIONS
A corporation is a company recognised by law as a single body with its own
powers and liabilities, separate from those of individual members. Corporations
perform many of the functions of private business, government, educational
bodies and the professions.

DECISION MAKING
A decision is a choice or judgement that you make after a period of discussion,
thought or consideration. Decision making is a process of making important
decisions.Every organisation makes decisions at every point in time of their
existence.There are various methods and processes of decision making.However,
the main aim of all decisions of corporations is to achieve their corporate
objectives .The core of these objectives is profit making and profit maximisation.

HOW IMPORTANT IS E-BUSINESS IN TODAYS WORLD

E-business has gained a lot of popularity in todays world due to a multitude of
operational benefits it can bring to purchasing practices. Examples of benefits
are: cost savings resulting from reduced paper transactions, Shorter order cycle
time and the subsequent inventory reduction, resulting from speedy transmission
of purchase order related information and enhanced opportunities for the
supplier/buyer partnership through the establishment of a web business-tobusiness communication networks.
E- Business is enhancing supply chain efficiency by providing real time
information regarding product availability, inventory level, and shipment status
and production requirements. It is vastly facilitating collaborative planning
among supply chain partners by sharing information on demand forecasts and
production schedules that dictate supply chain activities.

Moreover, it effectively links customer demand information to upstream supply

chain functions e.g. (manufacturing, distribution and sourcing) and subsequently
facilitating pull (demand driven) supply chain operations. (7)
Aside from the above importance, e-commerce serves as an equalizer . It
enables start-up and small-and medium sized enterprises to reach the global
market.
Example of: Levelling the playing field through e-commerce the case of
Amazon.com.
Amazon.com is a virtual bookstore .It does not have a single square foot of
bricks and mortar retail floorspace .Nonetheless , Amazon.com is posting an
annual sales rate of approximately $1.2 billion,equal to what about 235 Barnes &
Noble (B&N) superstores. Due to efficiencies of selling over the web,Amazon has
spent only $56million on fixed assets while (B&N) has spent about $118million
for 235 superstores.( To be fair Amazon has yet to turn a profit ,but this does not
obviate the point that in many industries doing business through e-commerce is
cheaper than conducting business in traditional brick-and-mortar company).(8).

E-commerce as a major tool of e-business is making mass

customizationpossible.e-commerce applications in this area include easy -touse ordering systems that allow customers to choose and order products
according to their personal and unique specifications.For instance ,a car
manufacturing company with an e-commerce strategy allowing for online orders
can have new cars built within a few days (instead of several weeks it currently
takes to build a new vehicle) based on customers specifications. This is working
more effectively where a companys manufacturing process is advanced and
integrated into the ordering system.

E-commerce allows network production. This refers to the parcelling out of the
production process to contractors who are geographically dispersed but who are
connected to each other via computer networks. The benefits of network
production include: reduction in costs, more strategic target marketing,and the
facilitation of selling add-on-products,services, and new systems when they are
needed.With network production, a company can assign tasks within its own core
competencies to factories all over the world that specialize in such tasks e.g. the
assembly of specific components.
To be consumers in C2B transactions,customers/consumers are given more
influence over what and how products are made and how services are
delivered,thereby broadening consumer choices.E-commerce allows for a faster
and more open process with customers having greater control.
E-business has now become an element of overall business strategy and it is still
widely seen as a way of transforming business operations and thinking.

E-business models have been benefitting communities that are sustaining

significant collaborative relationships despite geographical diversity of
membership. Meanwhile e-commerce focuses primarily on enterprises
customers,it enlarges the connectivity of the enterprises to include their
suppliers, employees and potential investors or partners.
E-commerce is the most important application of the new communication
technology,manufacturers,traders and consumers can now reach the market
more quickly and get more information that they could ever get before.The
electronic commerce has penetrated the businesses in many ways.E-business
has reduced the transaction costs via e-commerceallied with purchase, sales,
operating, holding,inventory and financial cost.The application of e-commerce
through development of websites enhances the potential global market and sales
revenue,bring forth new products,potential new customers,services and
geographical areas.In term of non financial benefits , e-commerce has
significantly helped in improving human resources and timeliness, quality of
services, customers satisfaction and some indirect effects.
Research forecasts that e-commerce will account for 86% of worldwide sales of
goods as services by year 2004.The potential for e-commerce is brighter,
specifically in those markets where buyers and sellers are motivated to reduce
costs, increase efficiency and cut delivery time.By 2003 estimated revenue from
e-commerce across the globe was to be approximately 1.5 trillion dollars the
rate of growth varies due to the development of infrastructure especially in
developing countries.Projected internet users by the end of 2000 are
approximately 48%(North America),22% (Western Europe),17% (Asia Pacific) and
7% (Middle East/Africa) which of course stimulate further growth of e-commerce.
(6)
As at September, 2002 the internet the carriage of e-business reached two
important milestones with 200 million IP Host and 840 million internet user.(12)

WAYS BY WHICH E BUSINESS AFFECTS DECISION MAKING IN CORPORATIONS

Any organisation that will embark on e-business must take a decision on its
business information system ( BIS)as there will be the need for the corporation to
have a good understanding of computer based systems before it embarks ebusiness solutions .More often than not corporations do not opt for radical
changes to their purchasing and customer supply systems- indeed paper based
systems are often maintained in parallel .Usually, they modify and extend
existing computer based systems such as ED I ,or they extend e-business options
but retain older non computing systems. (7)

Since there are many factors affecting the e-business strategy such culture,
leadership, motivation, infrastructure, globalisation, industry, size ,competition,
supply chain integration mechanisms.
Basically on e-business strategy corporations these days are taking various
decisions, while some have decided to improve on their supply chain
management strategies such as repackaging their e-marketing tools,improving
on planning,scheduling and change management,e-business analysis and design
implementation and maintenance of existing infrastructure and control.
Others have busy themselves with taking decisions on selling directly to their
customers(disintermediation) while some involves new intermediaries though
with its risks.
Some corporations have decided to hold on to old customers relationships
others enter partnership with intermediaries and a host of others do nothing to
automate their existing structures.

Taking to cognisance product and market development decisions of corporations

the following are some of the ways e-business affects them: more corporations
have firmly decided to enhance their market penetration via selling more of their
existing products to existing market relying on favourable customers
perceptions.
On market development on the other hand, some corporations are using new
channels for new markets for existing products which includes geographical
expansion i.e. international sales.
Particular trend can easily be noticed on product development decisions of
corporations in the field of information/news delivery that have decided to be
having e-versions of newspapers or magazines that interested customer can
subscribe to for some fees.
Generally however, some corporations have decided to diversify by creating
varieties of new products to sell to new markets not minding the fact that this
involves more unknown factors and so higher risks.

Many corporations have already decided on having creative positioning of an ebusiness strategy. A good example can be found in the instance stated below;
Dawsons antiques is a 23 year old small antiques business .With the
emergence of online auction sites , the owner ,Linda Dawson ,foresaw the need
not only to accommodate the internet in their business strategy but also to take
advantage of it in order to survive as a business. This came with the recognition

that many of her clients were exposed to a wide of antiques from competitors at
online auction sites at prices lower than she was charging.
Meanwhile, Sothebys, then a growing online auction site (and now one of the
largest online auction sites), realised the merit of increasing its auction inventory
to attract a bigger audience on the internet .It revised its internet strategy by
opening its website, Sothebys.com, to smaller dealers and auction sites instead
of competing directly with its competitors in the online auction business. With
this approach, Sotheby experienced an exponential growth in its inventory, which
attracted a bigger market.
Dawsons enlistment in Sothebys was instrumental in expanding its client base.
To make things easier, Sothebys not only provided the web site for its members
(Dawsons included). (8)
WHERE WILL E-BUSINESS GO FROM HERE?
As we have seen , e-business has taken a number of paths since companies first
started using web, and since they began to take advantage of e-commerce
opportunities. As technology advances and the web users become more
immersed in it,e-business will inevitably have to evolve and adapt to change in
the web culture.
Overall, we can expect to see the following e-business movement s in the
coming years:
-

Renewed SME entrepreneurialism ; Economic drivers will catalyse the

resurgence of entrepreneurialism, as disenfranchised employees look to
the web for new opportunities .Small businesses in particular will also be
able to offer lower costs to their customers, so the coming years will be
an interesting time for small businesses with little capital to play with.
A social media slowdown may be witnessed as many organisations are
already feeling saturated by social media tools. Savvy businesses may
look to tools to help consolidate their use of social platforms-perhaps
through one port of entry or single sign on.
An online advertising revolution; Downloadable widgets (tools that allow
chunks of codes to be distributed through third party sites) will continue to
have far reaching possibilities-especially to drive online sales and further
marketing and PR. So instead of static banner ads, companies will
increasingly put interactive content in their place.
Greater customer-centricity ; Leaders in e-business already allow users to
choose what content they see ,and e-commerce sites in particular can
target products and service to those most likely to make a purchase .
However, sites that allow customers to choose what they see( as well as
buy) will strengthen trust and increase their sales.
The dawn of the e-commerce price wars; As the recession persists, price
wars will continue to break out between both store and online
rivals.However as retailers drop their prices further ,they risk devaluing
some of the brands they represent.Therefore, many manufacturersdependent on their product type-may choose only to work with more

established bricks & mortar outlets with an e-commerce channel-or

simply sell directly their customers online. (14)

CONCLUSIONS
The rapid growth in e-business around the world has prompted many to look for
better ways of measuring the phenomenon .As more and more countries and
international agencies become involved, it is important to develop plans to
ensure that there is no unnecessary duplication of efforts and that users have
the data necessary for informed decision making at the earliest opportunity.
Despite various potential benefits of e-business ,not every corporation is ready to
adopt it as a purchasing tool or business strategy .Some serious hurdles to the
successful implementation of e-business include a host of security, legal and
financial problems, all of which are significant factors in business decisions for ebusiness introduction .In particular ,the incoherence of the web and concerns
about security and flexibility limit the confidence of business in internet based
trading systems .Current e-business systems do not yet fully address these
concerns, and most concentrate on bilateral relationships between sellers and
buyers.
From the above discourse, it can be easily argued that e-business in todays
world is a silver bullet that is no doubt a very important and useful tool for many
corporations and individuals that are ready to catch up with the current trend of
change in the business world. Corporations leaders and individuals that want to
maximise their benefits should therefore not only listen to the popular press or
consultants, but rather put in place sense making approaches that questions ebusiness appropriateness to their corporations and its circumstances.

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3. Turban, Efraim,David King , Jae Lee and Dennis Viehland (2004) Electronic
Commerce: A Managerial Perspective , Pearson Prentice Hall, New Jersey.
4. Laundon , Kenneth C & Carol Guercio Traver (2003).E-Commerce:
Business,Technology and Society. 2nd edition. Pearson Addisson Wesley,
Boston.
5. Louis Gerstner (2002) Who Say Elephant Cant Dance.
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8. Zorayda Ruth Andam , E-Commerce and E-Business, May (2003) eASEAN

Taskforce UNDP-APDIP.
9. Tim Coltman et-al , E-business : Revolution , Evolution or Hype?
10.Van Hoek, R (2001) E-Supply Chains Virtually not existing Supply Chain
Management, Vol. 6 No 1 pp.21-28.
11.See www.aerohub.co.uk
12.See netsizer.com- from Tel cordia