E-BUSINESS MS-114
Books Text Books: • Whitley, David (2000). E-Commerce Strategy, Technologies and Applications. Tata McGraw Hill. • Schneider Gary P. and Perry, James T (1st Edition 2000). Electronic Commerce. Thomson Learning • Bajaj, Kamlesh K and Nag, Debjani (Ist Edition 1999). E-Commerce: The Cutting Edge of Business. Tata McGraw Mc Graw Hill, Publishing Company Ltd., New Delhi. Reference Books: • Treese G. Winfield & Stewart C. Lawrance (Ist, Edition 1999). Designing Systems for Internet Commerce. Addison Wesley. • Trepper Charles (Ist Edition 2000). E-Commerce Strategies. Prentice Hall of India, New Delhi. • Rehman S.M. & Raisinghania (Ist Edition 2000). Electronic E lectronic Commerce Opportunity & Challenges. Idea Group Publishing, USA. • Knapp C. Michel (Ist Edition, 2003). E-commerce Real Issues & Cases. Thomson Learning.
E-BUSINESS • Electronic business, commonly referred to as "eBusiness" or "ebusiness", may be defined as the utilization of information and communication technologies (ICT (ICT)) in support of all the activities of business. • E-Commerce constitutes the exchange of products and services between businesses, groups and individuals 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, individuals, groups and other businesses . • Basically, electronic commerce (EC) is the process of buying, transferring, or exchanging products, services, and/or information via computer networks, including the internet. EC can also be benefited from many perspective including business process, service, learning, collaborative, community. EC is often confused with e-business. • The term "e-Business" therefore refers to the integration, integration, within the company, of tools based on information and communication technologies technologies (generally referred to as business software) to improve their functioning functioning in order to create value for the enterprise, its clients, and its partners.
Cont.. • In practice, E-business is more than just e-commerce. While e-business refers to more strategic focus with an emphasis on the functions that occur using electronic capabilities, e-commerce is a subset of an overall e-business strategy. • E-commerce seeks to add revenue streams using the World Wide Web or the Internet to build and enhance relationships with clients and partners and to improve efficiency using the Empty Vessel strategy (Empty vessel or the empty vessel approach is a business term describing the negative effects of how one ends up with a worthless outcome when trying to please everyone ). Often, e-commerce involves the application of knowledge of knowledge management systems.
Organizational Organizational Perspective It is widely acknowledged today that new technologies, in particular access to the Internet, tend to modify communication between the different players in the professional world, notably: • relationships between the enterprise and its clients, • the internal functioning of the enterprise, including enterprise-employee relationships, • the relationship of the enterprise with its different partners and suppliers.
Cont.. • E-Business no longer only applies to virtual companies (called click and mortar ) all of whose activities are based on the Net, but also to traditional companies (called brick and mortar ) • The term e-Commerce (also called Electronic commerce), which is frequently mixed up with the term e-Business, as a matter of fact, only covers one aspect of e-Business, i.e. the use of an electronic support for the commercial relationship between a company and individuals.
Creation of value The goal of any e-Business project is to create value. Value can be created in different manners: • As a result of an increase in margins margins,, i.e. a reduction in production costs or an increase in profits. E-Business makes it possible to achieve this in a number of different ways: – – – – –
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Positioning on new markets Increasing the quality of products or services Prospecting new clients Increasing customer loyalty Increasing the efficiency of internal functioning
As a result of increased staff motivation. motivation . The transition from a traditional activity to an e-Business activity ideally makes it possible to motivate associates to the extent that: – The overall strategy is more visible for the employees and favors a common culture – The mode of functioning implies that the players assume responsibilities – Teamwork favors improvement of competences
Cont.. • As a result of customer satisfaction. satisfaction. As a matter of fact, e-Business favors: – – – –
a drop in prices in connection with an increase in productivity improved listening to clients products and services that are suitable for the clients' needs a mode of functioning that is transparent for the user
• As a result of privileged relationships with the partners. partners. The creation of communication channels channels with the suppliers permits: – – – –
Increased familiarity with each other Increased responsiveness Improved anticipation capacities Sharing of resources that is beneficial for both parties
An e-Business project can therefore only work as soon as it adds value to the company, but also to its staff, its clients, and partners.
Time To Market • "Time To Market" Market" is the time that is necessary to bring a product on the market from a time an idea was put forward .Worldwide, new technologies provide an incredible source of inspiration to formalize ideas while making Time-ToMarket even more critical because of the rapid flow of information and speedy competition.
Reduction of costs and ROI • The use of new technologies for the functioning of an enterprise makes it possible to reduce the costs on the different levels of its organization in time. • Nonetheless, implementation implementation of such a project is generally very costly and necessarily leads to organizational changes, which may cause upheaval in the practices of its employees. It is therefore essential to determine the return on investment (ROI) ROI) of such a project, i.e. the difference between the expected profits and the required overall investment, taking into account the cost of human resources mobilized.
Characterization of the e-Business • A company can be viewed as an entity providing products or services to clients with the support of products or services of partners in a constantly changing c hanging environment. The functioning of an enterprise can be roughly modeled in accordance with a set of interacting functions, which are commonly classified in three categories:
Cont.. • Performance functions, functions , which represent the core of its activity (core business), i.e. the production of goods or services. They pertain to activities of production, stock management, and purchasing (purchasing function); • The management functions, functions , which cover all strategic functions of management of the company; they cover general management of the company, the human resources (HR) management functions as well as the financial and accounting management functions; • The support functions, functions , which support the performance functions to ensure proper functioning of the enterprise. Support functions cover all activities related with sales (in certain cases, they are part of the core business) as well as all activities that are transversal to the organization, such as management of technological infrastructures (IT, Information Technology function).
What does E-business Involve ?
E-business involves business processes spanning the entire value chain: • Electronic purchasing and supply chain management • Processing orders electronically, • Handling customer service, and cooperating with business partners. • Special technical standards for e-business facilitate the exchange of data between companies. • E-business software solutions allow the integration of intra and inter firm business processes. • E-business can be conducted using the Web, the Internet, intranets, extranets, or some combination of these.
ORGANIZATIONAL WORK FLOW
E-Business Application Components Enterprise Applications can be divided into three components: c omponents: 1)Business systems: – – – –
customer relationship management enterprise resource planning document management systems human resources management
2)Internal communication and collaboration: collaboration : – – – – – –
VoIP content management system e-mail voice mail Web conferencing Digital work flows (or business process management)
3)Electronic commerce - business-to-business electronic commerce (B2B) or business-to-consumer electronic commerce (B2C): – – – –
internet shop supply chain management online marketing offline marketing
E-Business Models When organizations go online, they have to decide which e-business models best suit their goals. [A business model is defined as the organization of product, service and information flows, and the source of revenues and benefits for suppliers and customers. The concept of e-business model is the same but used in the online presence. The following is a list of the currently most adopted e-business models such as: E-shops E-commerce E-procurement E-malls E-auctions Virtual Communities Collaboration Platforms Third-party Marketplaces Value-chain Integrators Value-chain Service Providers Information Brokerage Telecommunication
E-BUSINESS CATEGORIES Enterprises are generally characterized by the type of commercial relationships they maintain. Dedicated terms therefore exist to quality this type of relationship: • B To B ( Business Business To Business, Business, sometimes written B2B written B2B)) means a commercial relationship business to business based on the use u se of a numerical support for the exchange of information. • B To C ( Business Business To Consumer , sometimes wrritten B2C wrritten B2C ) means a relationship between a company and the public pub lic at large (individuals). This is called electronic commerce, commerce, whose definition is not limited to sales, but rather covers all possible exchanges between a company and its clients, from the request for an estimate to after-sales service; • B To A ( Business Business To Administration, Administration , sometimes written B2A written B2A)) means a relationship between a company and the public pub lic sector (tax administration, etc.) based on numerical exchange mechanisms (teleprocedures, electronic forms, etc.). • As an extension of these concepts, the term B To E ( Business Business To Employees, Employees, sometimes written B2E written B2E ) has also emerged to refer to the relationship between a company and its employees, in particular p articular through the provision of forms directed at them for managing their carreer, vacation, or their relationship with the company committee.
CONT.. Roughly dividing the world into providers/producers providers/producers and consumers/clients consumers/clients one can classify e-businesses into the following categories: • business-to-business business-to-business (B2B) • business-to-consumer business-to-consumer (B2C) • business-to-employee business-to-employee (B2E) • business-to-government (B2G) • government-to-business government-to-business (G2B) • government-to-governmen government-to-governmentt (G2G) • government-to-citizen (G2C) • consumer-to-consumer (C2C) • consumer-to-business (C2B)
How Does e-Business Work? • E-Business refers to the employment of information and communication technologies in business processes and is more than just the employment of computers in business processes. Besides computers, other tools through which information and communication technologies can be applied in business include fax, mobile phones and PDAs (personal digital assistants), though the Internet (and Intranets) remain the main avenues through which information and communication technologies are applied in business processes.
Advantages of e-Business E-business has many advantages, • The possibility for a bigger marketing outreach (thanks to the Internet) • Quicker access to information for decision-making purposes • better customer support and reduced transaction costs, among others. • Operationally, e-business can improve the way a company obtains its raw material (through e-procurement, for instance), the way a company processes the raw material into a complete product (through the use of an enterprise resource planning system) and the way a company subsequently markets the end product (through the use of an e-commerce system). E-business has come to be seen as the only way of doing business in some industries, and a business organization that doesn't adopt the model risks losing customers, clients and profit.
• In the coming years, companies will either be E-Business or no business”
Andy Grove, past CEO of Intel