The way business is done has undergone fundamental changes during the last decade or so. The manner of conducting business is referred to as the ‘mode of business,’ and, the prefix ‘emerging’ underlines the fact, that these changes are happening here and now, and, that these trends are likely to continue. The newer modes of business are not new business. These are rather simply the new ways of doing business attributable to a number of factors. You are aware that business as an activity is aimed at creating utilities or value in the form of goods and services which the household and industrial buyers purchase for meeting their needs and wants. In an effort to improve the business processes — be it purchase and production, marketing, finance or human resources business managers and business thinkers keep evolving newer and better ways of doing things. Business firms have to strengthen their capabilities of creating utilities and delivering value to successfully meet the competitive pressures and ever-growing demands of consumers for better quality, lower prices, speedier deliveries and better customer care. Besides, the quest for benefitting from emerging technologies means that business as an activity keeps evolving.
What is e-Business?
If the term business is taken to mean a wide range of activities comprising industry, trade and commerce; e-business may be defined as the conduct of industry, trade and commerce using the computer networks. The network you are most familiar with as a student or consumer is the internet. Whereas internet is a public thorough way, firms use more private, and, hence more secure networks for more effective and efficient management of their internal functions.
e-Business vs e-Commerce:
Though, many a times, the terms e-business and e-commerce are used interchangeably, yet more precise definitions would distinguish between the two. Just as the term ‘business’ is a broader term than ‘commerce’, e-business is a more elaborate term and comprises various business transactions and functions conducted electronically, including the more popular gamut of transactions called ‘e-commerce.’ e-commerce covers a firm’s interactions with its customers and suppliers over the internet. e-business includes not only e-commerce, but also other electronically conducted business functions such as production, inventory management, product development, accounting and finance and human resource management. e-business is, therefore, clearly much more than buying and selling over the internet, i.e., e-commerce.
Scope of e-Business
We have mentioned above that the scope of e-business is quite vast. Almost all types of business functions such as production, finance, marketing and personnel administration as well as managerial activities like planning, organising and controlling can be carried out over computer networks. The other way of looking at the scope of e-business is to examine it in terms of people or parties involved in electronic transactions. Viewed from this perspective, a firm’s electronic transactions and networks can be visualised as extending into three directions.,
- B2B which is a firm’s interactions with other businesses
- B2C i.e., a firm’s interactions with its customers and
- intra-B or a firm’s internal processes.
Understanding B2B Commerce:
Here, both the parties involved in e-commerce transactions are business firms, and, hence the name B2B, i.e., business -tobusiness. Creation of utilities or delivering value requires a business to interact with a number of other business firms which may be suppliers or vendors of diverse inputs; or else they may be a part of the channel through which a firm distributes its products to the consumers. For example, the manufacture of an automobile requires assembly of a large number of components which in turn are being manufactured elsewhere — within the vicinity of the automobile factory or even overseas. To reduce dependence on a single supplier, the automobile factory has to cultivate more than one vendor for each of the components.
A network of computers is used for placing orders, monitoring production and delivery of components, and making payments. Likewise, a firm may strengthen and improve its distribution system by exercising a real time (as it happens) control over its stock-in-transit as well as that with different middlemen in different locations. For example, each consignment of goods from a warehouse and the stock-at-hand can be monitored and replenishments and reinforcements can be set in motion as and when needed. Or else, a customer’s specifications may be routed through the dealers to the factory and fed into the manufacturing system for customised production. Use of e-commerce expedites the movement of the information and documents; and of late, money transfers as well.
Historically, the term e-commerce originally meant facilitation of B2B transactions using E lectronic Data Interchange (EDI) technology to send and receive commercial documents like purchase orders or invoices.
Understanding B2C Commerce:
As the name implies, B2C (business-to-customers) transactions have business firms at one end and its customers on the other end. Although, what comes to one’s mind instantaneously is online shopping, it must be appreciated that ‘selling’ is the outcome of the marketing process. And, marketing begins well before a product is offered for sale and continues even after the product has been sold. B2C commerce, therefore, entails a wide gamut of marketing activities such as identifying activities, promotion and sometimes even delivery of products (e.g., music or films) that are carried out online. e-commerce permits conduct of these activities at a much lower cost but high speed. For example, ATM speeds up withdrawal of money. Customers these days are becoming very choosy and desire individual attention to be given to them. Not only do they require the product features be tailor-made to suit their requirements, but also the convenience of delivery and payment at their pleasure. With the onset of e-commerce, all this has become a reality.
Further, B2C variant of e-commerce enables a business to be in touch with its customers on round-the-clock basis. Companies can conduct online surveys to ascertain as to who is buying what and what the customer satisfaction level is.
By now, you might have formed the opinion that B2C is a one-way traffic, i.e., from business-to-customers. But do remember that its corollary, C2B commerce is very much a reality which provides the consumers with the freedom of shopping-at-will. Customers can also make use of call centres set up by companies to make toll free calls to make queries and lodge complaints round the clock at no extra cost to them. The beauty of the process is that one need not set up these call centres or help lines; they may be outsourced. W e shall discuss this aspect later in the section devoted to Business Process Outsourcing (BPO).
Understanding Intra-B Commerce:
Here, parties involved in the electronic transactions are from within a given business firm, hence, the name intra-B commerce. As noted earlier too, one critical difference between e-commerce and e-business is that, e-commerce comprises a business firm’s interaction with its suppliers, and distributors/other business firms (hence, the name B2B) and customers (B2C) over the internet . While e-business is a much wider term and also includes the use of intranet for managing interactions and dealings among various departments and persons within a firm. It is largely due to use of intra-B commerce that today it has become possible for the firms to go in for flexible manufacturing. Use of computer networks makes it possible for the marketing department to interact constantly with the production department and get the customised products made as per the requirements of the individual customer.
In a similar vein, closer computer-based interactions among the other departments makes it possible for the firm to reap advantages of efficient inventory and cash management, greater utilisation of plant and machinery, effective handling of customers’ orders, and effective human resource management.
Just as intercom facilitated voice communication within the office, intranet facilitates multimedia and even 3-D graphic communication among organisational units for wellinformed decisions, permitting better coordination, faster decisions and speedier workflows.
Take for example, a firm’s interactions with its employees, sometimes referred to as B2E commerce. Companies are resorting to personnel recruitment, interviewing and selection, training, development and education via e-commerce (captured in a catch-all phrase ‘e-learning’). Employees can use electronic catalogues and ordering forms and access inventory information for better interaction with the customers. They can send field reports via e-mail and the management can have them on real time basis.
In fact, Virtual Private Network (VPN) technology would mean that employees do not have to come to office. Instead, in a way the office goes to them and they can work from wherever they are, and at their own speed and time convenience. Meetings can be held online via tele/ video conferencing.
Understanding C2C Commerce:
Here, the business originates from the consumer and the ultimate destination is also consumers, thus the name C2C, consumer-to-consumer commerce. This type of commerce is best suited for dealing in goods for which there is no established market mechanism, for example, selling used books or clothes either on cash or barter basis. The vast space of the internet allows persons to globally search for potential buyers. Additionally, e-commerce technology provides market system security to such transactions which otherwise would have been missing if the buyers and sellers were to interact in anonymity of one-to-one transactions?
An excellent example of this is found at eBay where consumers sell their goods and services to other consumers. To make this activity more secure and robust, several technologies have emerged. Firstly, eBay allows all the sellers and buyers to rate one another. In this manner, future prospective purchasers may see that a particular seller has sold to more than 2,000 customers —all of whom rate the seller as excellent.
In another example, a prospective purchaser may see a seller who has previously sold only four times and all four rate the seller poorly. This type of information is helpful. Another technology that has emerged to support C2C activities is that of the payment intermediary. PayPal is a good example of this kind. Instead of purchasing items directly from an unknown, untrusted seller; the buyer can instead send the money to Pay Pal. From there, PayPal notifies the seller that they will hold the money for them until the goods have been shipped and accepted by the buyer.
An important C2C area of interactive commerce can be the formation of consumers’ forum and p ressure groups. You might have heard of Yahoo groups. Like a vehicle owner in a traffic jam can alert others via message on radio (you must have heard traffic alerts on FM) about the traffic situation of the area he is stuck in; an aggrieved customer can share his experience with a product/service/ vendor and warn others by writing just a message and making it known to the entire group.