E-business Introduction - Business Environment

This is undoubtedly an exciting time to be considering developments in the technological environment, with the emergence of new business terms and concepts such as electronic markets (e-markets), electronic business (e-business) and electronic commerce(e-commerce). In the so-called ‘new economy’ digital networking and communication infrastructures provide a global platform through which enterprises and people interact, collaborate, communicate and search for information.The potential growth for electronic business worldwide is impressive. A wealth of complementary digital technologies, including digital communications networks(Internet, intranets, extranets), computer hardware and software, and other related networks, databases and information systems, distribution and supply chains, knowledge management and procurement are being merged into a powerful combination for business change using the World Wide Web (WWW) as the driving force. Starting more or less from zero in 1995, e-commerce has recently celebrated its tenth anniversary, and for many of us it is difficult to remember the pre-Internet business environment. In the US, it is estimated that the 200 million Americans with access to the web will soon bespending more than $145 billion annually online, equivalent to 7 per cent of all US retail sales. Similarly, in western Europe, a quarter of all Europeans do some shopping via the Internet. Globally, e-business has grown from $26 billion in 1997 to an estimated $1 trillion by 2005. Predicting the future growth of e-business is fraught with difficulty, but given that it has the potential to deliver a low-cost, universal, interactive and global medium that provides a simple and secure method for exchanging information instantaneously, the business case appears compelling.In addition, we might speculate that an Internet-based society will also notice a dramatic change to other aspects of people’s lives, outside of the workplace. For instance, changes such as new distance-learning methods and material are starting to emerge in education and many other areas of daily life are increasingly being affected by technological developments.However, we should also remember that while terms such as e-business and e-commerce are relatively new, they are part of an evolutionary technology process dating back over 30 years. The concept of e-business has actually emerged from a fusion of various separate technologies, such as electronic data interchange (EDI), electronic fund transfer (EFT), electronic point-of-sale (EPOS) and smart cards that had previously struggled in isolation to achieve mass acceptance.
Indeed, the terms ‘electronic business’ and ‘electronic commerce’ have no universally accepted definitions, and confusingly are often used interchangeably. However,for our purposes there is a significant difference between the two terms.
Broadly, e-business means doing any element of business over the Internet, and embraces activities such as servicing customers and collaborating with partners, in addition to buying goods, services and information. E-business can be formally defined as the exchange of products, services or information, whether paid or unpaid, across electronic networks, at any stage within the value system, including the supply chain, the value chain and the distribution chain. There are a number of potential sub-sets within the general term ‘e-business’.
E-commerce covers a narrower sphere of activities than e-business, and refers in particular to the process of electronic transactions involved in the exchange of products, services and information between buyer and seller. The activities of e-retailers such as Amazon would fall under this category. Within an organisation, there are several activities (for example, information and knowledge management, resource co-ordination etc.) that might be more effectively achieved through use of an intranet. Table provides a common classification of e-business by nature of transaction. For the purposes of analysis, business organisations have been sub-divided into private sector (B), public sector (G) and third sector (T)organisations. There is also a column for consumers (C).It can be seen from Table that e-business encompasses a wide spectrum of potential external commercial and information exchanges and applications. However, the classifications business-to-business (B2B) and business-to-consumer (B2C) represent the core of electronic commerce and these are the areas that have received the most interest and development to date. These classifications are now considered below in some detail.Business applications 1: business-to-business(B2B) commerce


Broad-spectrum of e business applications

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