E- BUSINESS FUNDAMENTALS
INTRODUCTION
The term "e-business" was coined by IBM's marketing and Internet team in 1996 that defines e-business as "a secure, flexible and integrated approach to delivering differentiated business value by combining the systems and processes that run core business operations with the simplicity and reach made possible by Internet technology."
E-business means the administration of conducting business via the internet or doing business with the help of internet network. It covers all the aspects of business such as firm, clients, suppliers, customers, communication, selling, marketing research etc.
Electronic Business or e-business is a term which can be used for any kind of business or commercial transaction that includes sharing information across the internet. It is a more generic term than E-Commerce because it refers to not only buying and selling but also servicing customers and collaborating with business partners.
The scope of E-business includes all types of business functions and transforms business relationships such as B-B (Business to business), C-C (Company to company) in a strategic manner and drives efficiencies, speed, innovation and new value creation for an organization.
While a website is one of the most common implementations, e-Business is much more than just a web presence. There is a vast array of internet technologies all designed to help businesses work smarter not harder. Think about collaboration tools, mobile and wireless technology, Customer Relationship Management and social media to name a few.
FEATURES: E-BUSINESS
1. Medium
· One thing that sets an e-business apart is the online niche it occupies. E-business encompasses a broad variety of businesses, but the basic premise is its reliance on the Internet for commerce. The organization uses online media to promote, buy and sell various products and services. Additionally, being solely online allows an e-business to access the entire world market with ease.
2. Website
· Although many businesses have websites, this decision is not optional for a focused e-business. To sell itself to the world and perform transactions, the organization requires a website. While websites are advantageous for any business, an e-business cannot exist -- let alone be labeled as such -- without this tool.
3. Location
· Another key feature of an e-business is its versatility. While conventional businesses require an office or store, e-businesses can be run without this added expense. In fact, many e-businesses are home-based. This makes it easy for entrepreneurs to work from home at much lower cost than traditional businesses. However, this also means that e-businesses are much more focused, competing only with similar businesses in their niche.
4. Communication
· Communication is crucial for any business, but the seamless nature of online communication makes it a key feature in e-business. By placing your business online, you can provide all the necessary contact information to your clients. In turn, the business has instant access to both current and potential clients. This is especially true of media like email.
5. Access
· Access is always a useful feature, one that an e-business greatly benefits from. By focusing so heavily online, the organization is always open and selling its products or services. In short, customers do not have to worry about operating hours. Similarly, it is easy for e-business owners to quickly interact with and receive feedback from clients through online questionnaires or surveys.
BENEFITS OF E-BUSINESS
1. Ease of Formation
· Unlike a host of procedural requirements for setting up an industry, e-business is relatively easy to start. The benefits of internet technology accrue to big or small business alike. In fact, internet is responsible for the popularity of the phrase 'networked individuals and firms are more efficient than networked individuals'.
2. Easy Marketing
· With an e-business, all of the marketing efforts of the company drive the target traffic to one central point that is the business website and allows to use many online marketing tactics including email marketing, article marketing, social media networking and e-newsletters that are low cost or free.
3. Convenience
· E-business breaks down the time barriers that location-based businesses encounter as the Internet is available 24 hours a day, seven days a week, your business never closes (24*7). An e-business can literally be making money while one is fast asleep.
4. Global Reach
· An e-business also allows broadening the reach of the traditional business and eliminates the geographic boundaries. An online business can reach customers in the four corners of the Earth and as long as someone has an Internet connection, business is able to reach and sell their product or service to these visitors to the company’s business website.
5. Reduces Cost
· Transaction Cost- Running an online business reduces the cost per transaction because it takes less manpower to complete an online transaction. The customer can place the order online on the website, which removes the need for a salesperson.
· Overhead Cost- Running an e-business cut back or out most of the costs involved in running a physical location as it do not require any additional space and can be run from home or office.
6. Other benefits:
· Speed: Internet has high speed. This benefit becomes all the more attractive in the case of information regarding intensive products.
· Movement towards a paperless society: Dependence on paper work has been considerably reduced through internet. Many companies and even the government departments and regulatory authorities are going in this direction.
DISADVANTAGES OF E-BUSINESS
1. Security and Integrity Issues
- Hackers are adept at manipulating online business websites to harvest financial data. The customer information required by the company like the shipping address, credit card details and email, potentially provides ample resource for hackers to initiate identity theft. This risk keeps some people from shopping online.
- Company has to assure customers of the security of their personal data as they interact with the e-business and ensure high site integrity by implementing good security measures, including digital signatures and data encryption, to protect client information lest it falls in the wrong hands and lawsuits ensue.
2. Momentary Intangibility
- The personal touch is a missing factor in online transactions. An e-business normally offers the customer no physical proximity to the items purchased until delivery. Experiencing the feel, taste or smell of a product can influence the decision to buy. Unless it's a repeat buyer, a typical customer would want to feel the texture of the leather wallet, the comfort of the shoe or smell the cologne before ordering. The absence of an opportunity to physically examine the product places a major limitation on e-businesses.
3. Less privacy
· The nature of internet technology e-business is such that private information of the online customers can be easily collected and recorded on the server side. The buying pattern of a customer can be known to an e-shop with the help of certain sophisticated tools. You know that cookies can be used to track customers online in Electronic business. On one hand these technologies are useful for doing customization but on the other, they can be said to have caused the breach of informational privacy rights in E-Commerce of a person.
4. Technical Disadvantages
- There can be lack of system security, reliability or standards owing to poor implementation of e-Commerce.
- Software development industry is still evolving and keeps changing rapidly.
- In many countries, network bandwidth might cause an issue as there is insufficient telecommunication bandwidth available.
- Special types of web server or other software might be required by the vendor setting the e-commerce environment apart from network servers.
- Sometimes, it becomes difficult to integrate E-Commerce software or website with the existing application or databases.
- There could be software/hardware compatibility issue as some E-Commerce software may be incompatible with some operating system or any other component.
