Other reasons for the rise of the internet could be the The Development of the New Economy creation of new communication channels which provide
Internet, digital technology, or information and an ideal platform for bringing people together cheaply and communications technologies (ICT) create the term “new efficiently, offering opportunities and challenges for the economy”: e-Business. It is also called as ‘the internet business community such as expanding markets, economy’, ‘the information economy’, and ‘the digital developing new products and services and achieving a economy’ in other references. competitive advantage and profitability.
This new economy is global and it enables intangible Definition of e-Business things such as ideas, information, and relationships. The e-Business is conducting business by applying digital new economy is based not only on capital and human technology and media to improve the competitiveness of resources, but also on information. In order to compete the organization. well in the market, organizations need to use the right information at the right time. e-Business is a revolution because it is not business as usual; it is not conducting old business in a new way, it is From the point of business, organizations are no longer radical. individual entities. They are a part of an integrated network of organizations which is called supply chain The word “electronic” in e-Business term is used for management and the information and communication interactive, inter-organizational processes and therefore technologies play a key role in conducting transactions “electronic” is defined as a combination of and collaborative ventures between partners. telecommunications and computing capabilities.
Key Concepts Related to Electronic Business In order to be successful in managing e-Business, “The Internet” is a term used for the physical network that organizations need knowledge that comes from different links computers across the globe. It consists of the business processes and activities such as marketing and infrastructure of network servers and communication links sales, new product development, manufacturing and between them that are used to hold and transport inbound and outbound logistics.
information between the client PCs and web servers. The e-Business vs e-Commerce growth in digital business and the advances in information Although the terms ‘e-Business’ and ‘e-Commerce’ are and communication technologies have created extra often used synonymously, e-Business is not the same as requirements for e-Business applications offering mobile e-Commerce. solutions in the management of enterprises. Electronic-Commerce If there is a restriction to employees in an organization for accessing the information needed, this is called intranet Electronic commerce (e-Commerce) is simply defined as (Chaffey, 2007). Intranet enables companies to operate in buying and selling via computer networks. Since a virtual network beyond the geographical barriers. e-Business includes the process of transacting with suppliers and customers, e-Commerce is defined as a If the access to information is extended to some others particular form of e-Business. (customers, suppliers and collaborators), but not everyone beyond the organization, it is called extranet. e-Commerce perspectives are as follows:
e-Business can be defined as a business management 1. A communications perspective – the delivery of method using information technologies especially Internet. information, products or services or payment by The internet has been used as a global communication tool electronic means. since the development of the World Wide Web (WWW) 2. A business process perspective – the application in the early 1990s. Hypertext transfer protocol (HTTP) of technology towards the automation of business which enables access to particular parts of documents or transactions and workflows. even to other relevant documents held on other servers by 3. A service perspective – enabling cost cutting at extending the functionality of the internet is derived from the same time as increasing the speed and quality a mark-up language called hypertext markup language of service delivery. (HTML). As in the servers, each document, or pages are 4. An online perspective – the buying and selling of given a unique address, the addresses are called as products and information online.
universal resource locators (URL’s). With the ability to It can be said that electronic commerce is not restricted to access pages, documents and servers from many different the buying and selling activities. It also includes pre-sale websites gave rise to the term the World Wide Web. and post-sale activities along the supply chain.
The World Wide Web (WWW) transformed the business e-Commerce is further divided into sell-side perspective environment and many firms realized that they should and buy-side perspective. Sell-side e-Commerce refers to integrate their traditional business models with those selling the products of the organization to its customers online. whereas buy-side e-Commerce refers to electronic
transactions to procure resources needed by the Benefits and Challenges of e-Business organization from its suppliers. Before focusing on the benefits of e-Business,
The Differences Between e-Commerce and e-Business organizations should consider the key characteristics of Both of them use the newest web technology in e-Business which are summarized as follows:
organizational and business processes. In order to • The speed at which transactions can occur, implement e-Business and e-Commerce, organizations • The ability to connect multiple parties at the need to improve their hardware, software, and same time, technological infrastructure. • The ability to gather and manipulate information
While there are similarities between e-Business and in new ways, and e-Commerce, there exist some differences between them: • The absence of traditional business tools such as paper forms and face-to-face retail contact. • e-Commerce is defined primarily as buying and selling activities through the internet. e-Business impacts more than just the sales side of the • Placing orders, making payments and tracking business. Electronic connectivity not only improves order delivery via the internet are the main efficiencies across the full value chain, but also has the transactions included in e-Commerce. power to transform the traditional business models • e-Commerce is facilitated by a range of digital entirely.
technologies including Internet communications The benefits of e-Business are: through web sites and e-Mail as well as other digital media such as wireless or mobile and • Improved operational efficiency and productivity media for delivering digital television such as • Reduction in operating costs and costs of goods cable and satellite, mobile phones, mobile and services applications, planes, trains and automobiles all • Improved competitive position access the Internet. • Penetration into new markets through new channels In short, e-Business is a broader term than e-Commerce. • Improved communications, information, and As e-Business enables companies to link their internal and knowledge sharing external processes more efficiently and flexibly, work • Harmonization and standardization of processes more closely with suppliers and better satisfy the needs • Improved internal information access and expectations of their customers, it is a more generic • Improved relationships with suppliers and term than e-Commerce. improved customer service
Taxonomy of e-Business Models e-Business is creating a rough competitive environment e-Business varies in scope and type of activities for industries. The biggest challenges of e-Business are undertaken. And it can be broadly divided into the internal such as existing organizational structure and following categories: business processes. Organizations are also faced with challenges in determining their customers’ changing • Business-to-Business (B2B) needs. In order to remain competitive, many of the • Consumer-to-Consumer (C2C) organizations try to define their customers’ changing • Government-to-Government (G2G) needs effectively. Besides, supplying a mobile • Business-to-Consumer (B2C) or Consumer-to- environment, supporting applications themselves and the Business (C2B) telecommunications infrastructure are much more • Business-to-Administration (B2A) or expensive than the traditional desktop environment. In Administration-to-Business (A2B) addition, although e-Business is an economic and • Consumer-to-Administration (C2A) or technological phenomenon, it also causes a social change. Administration-to-Consumer (A2C) Companies should adopt e-Business strategies that are aligned with the strategies of the entire value chain. Business-to-consumer (B2C): Commercial transactions between an organization and consumers.
Business-to-business (B2B): Commercial transactions between an organization and other organizations
Consumer-to-consumer (C2C): Informational or financial transactions between consumers, but usually mediated through a business site.
Consumer-to-business (C2B): Consumers approach the business with an offer.