1. E-Business Definition
E-business or Electronic business, is a set of procedures and workflow steps that carry out specific business processes, simultaneously legitimizing the Internet as a mainstream communications medium for buying and selling products, Electronic data interchange, Payroll, ordering, inventory control, shipping and more.
E-Business activities include not only the e-commerce transactions with customers and suppliers but also the supporting internal transactions-some of which may not be e-commerce.
When you do E-Business, you will likely employ a mixture of some of the following E-Business components:
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- Internet or web site
- ED1 (Electronic Data Interchange)
- Business to business sales over a supply or value chain
- Provision of services and tasks over the internet by application service providers
- Web-based e-commerce
- Call center integration
- Intranets and Extranet for the supply chain network
Surveys indicate that firms have gotten a rapid payback for their E-Business investment if the underlying business activities were improved correctly.
2. E-Commerce Vs E-Business
E-commerce refers to all types of electronic transactions takes place while buying and selling online. It may be financial transactions or exchanges of information or other services.
Electronic commerce (e-commerce) is also known for buying and selling using the Internet.
E-commerce is not just about buying and selling it also includes all the electronically mediated transactions between a company and any third party it deals with.
E-commerce is all about exchanging, among customers, vendors and business partners.
E-business is also integrated with these same elements, but also includes operations that are handled within the business itself.
E-commerce and e-business play a very important role and makes it very fast and easier for business transactions.
So that it becomes very important for any business to constantly upgrading with the new technologies, integrate newer and faster systems to serve better the needs of people around the world.
Preparing inventories for orders is no longer works: rather, products are manufactured to meet specifications for consumer demands.
Ecommerce requires business entities to adopt new strategies to survive in the market.
3. E-Business Models
To a conceptual understanding of e-business, it needs to be defined from both the B2C and the B2B perspectives.
This section also introduces the Internet, or digital, supply chains and reveals their underlying significance to both the B2C and B2B e-business channels.
The Business-to-Consumer Phenomenon
When consumers purchase goods or services directly from the Internet, online retailers are servicing them.
In other words, online retailers, or e-tailers, have initiated a consumer-oriented supply, or value, chain for the benefit of Internet consumers.
This phenomenon is known as business-to-consumer (B2C) electronic commerce.
In this discussion, the supply chain is used interchangeably with the value chain.
However, the supply chain, in the traditional sense, refers to manufacturing, storage, transportation, or the administration of data, that are purchased by a given enterprise to use in manufacturing or developing the products and services for customers or in regular business processes.
In B2C models, the supply chain enables the system, or infrastructure, that delivers goods or services directly to consumers through Internet-based channels.
But what exactly is B2C e-commerce? But more importantly, why has it grown into a multibillion-dollar industry?
The Business-to-Business Phenomenon
B2B is the poster child for e-business. One forecast has B2B commerce growing from $150 billion in 1999 to $1.2 trillion by 2021.
Presently, the median transaction for B2B sites is three to four times the size of the median transaction for B2C sites or $800 versus $244.
If you are able to build an effective B2B channel, the payoff could be significant, resulting in improved economies of scale and productivity, reduction in overhead, improved information flow and processing, and increased operating efficiencies, to name a few.
E-Business success comes from making the best selection of business activities for E-Business as well as implementation.
There will have to be multiple related activities for E-Business because of the need to provide a complete set of services to customers or sufficient benefits to warrant supplier involvement.
In any organization, there are a large number of business processes that yield many different combinations of activity groups.
4. Methods for E-Business
1. Understand the Basic Business
Read up on your organization in magazines, periodicals, and the financial press. &Business at its core must be aligned with the basic objectives of the enterprise.
What do outsiders say about your company? What do they list as their strengths and weaknesses? Who do they mention as competitors?
What challenges does the firm face? What is said about your firm now as compared with two or three years ago? Use the web and CD-ROM databases in libraries to search for articles.
Search for chat rooms and forums where customers mention things about the company and its products and services.
Consider the politics of the business. Where is the center of power? What recent organizational changes have taken place? How secure are the people in power?
Why are the answers to these questions important? You cannot approach E-Business casually.
It is a long-term proposition and not a casual whim to be played with by a transitory manager.
Look to see where customers or suppliers touch the organization and business activities most frequently.
This may not be obvious. In the case of Ricker Catalogs, there were a large number of contacts from customers related to returns of merchandise that Ricker did not produce themselves. This might be a target area for E-Business.
2. Identify Previous Attempts At Improvement
This may seem irrelevant to E-Business, but you want to learn from the past for the future.
Tied to culture is the desire of the organization to improve itself. Over the past 20 years, many management improvement approaches have been tried in organizations.
In addition, your firm may have a faltering or only partially successful e-commerce effort. The following is a partial listing of sample management approaches.
A vision of the organization: This is a popular device to get a common framework and understanding of the focus of the organization.
If there is a vision, it is tangible or fuzzy? Could it fit a hundred other organizations in different industries? Does the vision reflect reality?
Do actions support the vision, or does the vision simply hang on a nice frame in the visitor entrance? For E-Business the vision must be more precise than just, “Establish an E-Business presence.
Competition Analysis: This is an increasingly popular method. Talk to the people who perform this analysis.
Find out if they are satisfied with the actions taken. Ask whether the analysis translated into action or remained passive information. Try to get leads for E-Business activities.
Alliances with customers and suppliers: There may be existing automated relationships with customers and suppliers.
Some companies have found such alliances beneficial in terms of quality improvement, electronic linkage, product design, and industrial practice.
Finding out about alliances may provide clues to which business activities are the most important
Benchmarking: Does your firm do benchmarking? Does it look for good practices and then fit them into the organization?
Does the firm benchmark, and then do nothing with the results? Benchmarking will help in the measurement of business activities and can assist in identifying critical business activities.
3. Innovation
E-Business is innovation with a capital “I.” Organizations approach methods differently. Some are “innovators.”
They analyze a method and then try to implement it and achieve results.
Where is further innovation needed?
Professional skills will be needed to increase the dynamic on-demand business world?
Research is going to play a vital role to establish the foundation for the future.
Technological innovations interdisciplinary approach is needed to foster the transition of e-services into an innovative discipline, encompassing and combining business, technology, and organizational aspects.
4. Determine Your Business Strategy For E-Business
You will refine this as you go. However, you should begin early. Here are some basic questions you should answer.
What is your current value chain and what will be the value chain with the web?
How will E-Business impact the value chain?
What new business areas could you enter with E-Business?
How can E-Business be employed to challenge the common means of doing business?
What new value will E-Business provide to your customers or suppliers?
What is the vision for E-Business? How will it be communicated?
Is senior management aware of the threats offered by the web?
Posing and then answering these will raise the level of awareness of E-Business and its implications for your firm.
5. Collect Data
First, gather as much data as you can by passive means. Utilize organization charts, vision statements, long-range plans, policies, and procedures, and some external information on the company and industry.
Passive information is readily available with little effort. Use the information to help generate interview questions.
Try to develop some “strawman” statements related to the questions in Step 4.
Data collection should not take a lot of time. The project clock is ticking. You will have an opportunity later to collect detailed information.
Some who prefer detail find this frustrating, but it is in this step that you get the big picture.
You will relate everything that follows to the understanding of the organization obtained in this step.
This information will provide suggestions for business activities. It will aid you in Action 5 when you collect information for business activities, infrastructure, and organizations.
6. Identify Candidate E-Business Activities
You have gained an understanding of the business. Now define candidate business activities for later evaluation and selection for E-Business.
Your goal is to identify several candidate activities. An organization might have more than 250 business processes, depending on the definition of its scope, making it important to narrow the field of candidates.
You want to choose 10-15 business processes because it is easier to choose at this stage than to add in the future and politically you must demonstrate a comprehensive approach.
7. Summarize the Chosen Business Activities
You now have a list of individual business activities to consider. To understand these more fully, prepare a brief summary table.
In the first column list business activities. In the second column place characteristics of the activity, and in the third list characteristics of the systems and infrastructure.
When you look at the Ricker Catalogs, you can see the daunting challenges they face. The other firms faced similar challenges.
And, keep in mind, all of these hard-working business activities and systems that made money.
Creating such a table has several benefits, beyond the support of the grouping of business activities.
First, people can review the table quickly. Second, it provides a basic understanding of activities at a high level.
Third, the table will eventually help you select and market the chosen activity group.
Critical success factors in E-Business implementation are collecting data and interacting with people through interviewing and observing the work.
While these factors are important in traditional projects, their stature increases in E-Business because of the following:
Implementing E-Business tends to be political. There is fear among the people involved in the work as well as in middle management and supervision levels.
What you say and how you work can have a direct impact on whether the project will succeed.
Collecting data is the principal means of interacting with the staff and management involved in the business activity.
Keep in mind that you are not only collecting data but also showing your confident attitude.
During this phase of E-Business implementation, you create an impression with the staff who will make your changes succeed or fail?
Through the interaction, you have the opportunity to get people involved and committed to E-Business.
While traditional methods of interviewing and data collection have value, a total approach that supports E-Business politically is more effective.
Change and implementation are marketed at the same time that information is collected.
Note that with pressure to implement E-Business, the detailed data collection effort discussed here is conducted in parallel with the infrastructure assessment and the competitive and industry assessment.