e Business12

E BUSINESSE-business in its variety of forms that use information communication Technologies (ICT) has changed the way that business transactions can take place (Sawhney and Parikh, 2001). E-Procurement has drastically altered the value generation equation by ICT reducing transaction costs (Duyshart,1997; Duyshart, Mohamed, Hampson and Walker, 2003) and facilitating internetcommerce (Lawrence, Lawrence, Newton, Dann, Corbitt and Thanasankit, 2003). In todays market, many companies present themselves to the world via their internet site, they tender and respond to tenders use web enabled technologies, manage and control their accounting and information exchange using electronic means and they also use groupware internet technologies for sharing knowledge, decision making, coor dination and project control. Moving from paper-based to object oriented data models has transformed much of the procurement process and improves supply chain integration.

business units within an organisation; processing transaction data (eg electronic data exchange EDI) between organizations relationship marketing processes that bind parties more closely together using customer relationship management (CRM) applications and inter-operability of data exchange; and e-business (Sharma, 2002). Also the journey takes us from substantially paper-based to fully integrated electronic form of information exchange, financial tran sactions, coordination and monitoring and control of resources and activities. This is illustrated in Figure The literature presents case study examples of e-business for major companies, such as BHP Billiton one of Australias largest companies and a major global resource company (Chan and Swatman, 2000) as well as medium sized construction companies such as Kane Constructionin Australia who are typical of many organisations that undertake projects using ICT to not only present themselves to potential customers and supply chain partners but also as part of a portal that allows them to interact with their supply chain using e-business applications. This particular organisation uses its web presence to project its corporate image and market its services. Kane Constructions web siteprovides an example of how this project-based organisation can interact with the world as well as presenting its e-face to prospective clients and supply chain partners who may use e-business as a matter of course. The relevance of linking e-business to procurement in a book such as this, relates to general changes in procurement patterns th at includes closer alignment (and hence the need for ICT interoperability) as well as business process alignment. Companies that use ICT as a given may be unlikely to want to deal with organisations that have failed to develop e business capability or might choose to exploit a superior ICT capability. The rationale is that much of th e value that integrating organisations in a supply chain through common platform ICT with interoperable data provides a critical competitive advantage (Sawhney and Parikh, 2001). The nature and extent of this capability varies amongst organisations involved in projects and so this chapter seeks to: help us understand what is meant by e-business; how it operates so that we can gain an historical perspective and better appreciate this evolving business paradigm; and to be better prepared for e-business demands in a turbulent, demanding and highly competitive global business environment. Finally, government has seen e- business as a strategic interest for proc urement and have established or sponsored organisations to help develop standards and to promote e-procurement. The Australian Procurement and Construction Council Incis one example (Australian Procurement & Construction Council Inc and DOLAC, 1997)

DEFINATIONE-business (or electronic business) is the term used to describe using the internet to operate your business. E-business represents only a fraction of worldwide business, but is one of the fastest growing sectors and provides entrepreneurs with excellent opportunities to enter the market.In a historical sense, the internet is a relatively new way in which to do business, with the growth of e-business taking off in the 1990's. The internet provides consumers with an increasing amount of ways to interact with businesses and has made buying and selling more competitive worldwide. The rate of globalisation has been significantly impacted by the internet, making it easier for people and organisations separated by distance to communicate and interact with each other.E-businesscan be as simple as using the internet to send emails between staff or communicate with suppliers. A business can be considered an e-business even if it doesn't buy and sell products over the internet, as the term refers to business activities that areassisted by the internet. For example, a successful shop front business may decide to create a website to promote their business but not actually sell products directly through the internet. Almost all businesses are now an e-business to at least some extent, however, many have taken a step further and are involved with e-commerce.E-commercespecifically refers to ordering, buying, selling and paying for products and services using the internet. E-commerce is a subset of e-business and can make up the entirety of the business or be used alongside existing, traditional business models. E-commerce uses the internet to market, sell and conduct transactions with customers without face to face contact between the buyer and seller. Many e-businesses now conduct all of their operations online and have no physical store that customers are able to visit.As the internet continues to grow in popularity, technology improves and access becomes more widely available, more and more entrepreneurs are expected to capitalise on the potential of using the internet to operate their business.

ADVANTAGESThe internet and the emergence of e-business has provided entrepreneurs with many newadvantagesand opportunities. The internet has created a business environment in which time and distance are less important, people have access to more information to help them make decisions and consumers have better access to a broader range of products and services.A significant benefit for entrepreneurs is that the initial investment for starting up an e-business is generally lower than the costs associated with starting an equivalent business using a traditional model. The technology used to setup and operate an e-business is becoming more advanced whilst also becoming cheaper to obtain. Many successful e-businesses are started using only a home based office with a personal computer, some basicsoftwareand a connection to the internet.Low start-up costs mean that more people are able to enter the marketwith their business ideas. Many of the barriers to opening your own business have been reduced or removed, with many people able to operate an e-business whilst remaining employed in their regular day job. People who lacked the confidence to start a full scale business are now able to test their abilities and ideas online for a relatively small initial outlay.The increases in technology and falling prices also provide online businesses with a steady stream of new customers as more people move online to shop for products and services. Cost and access is becoming less of a barrier for consumers and people are becoming increasingly comfortable with making purchasers online.E-business makes it easier, faster and cheaper for businesses to communicate with their suppliers and theircustomers. Using email and online ordering systems, communication and transactions can occur almost instantly between organisations situated anywhere in the world.The internet is accessible twenty-four hours a day, seven days a week. This means that buyers and sellers can conduct transactions at any time, as opposed to the regular trading hours of traditional business models. The internet can also make it easier and more cost effective for business managers to track and analyse the buying patterns of their customers, and in turn tailor the business to better suit their needs and expectations.E-business can provide cost saving advantages for both buyers and sellers. Online sellers are able to reduce their overheads as they don't need expensive shop fronts, as many employees or need to hold as much inventory on hand. In turn, this allows them to reduce their prices and pass the savings on to their customers, who save time and money by shopping from their own homes. The fact that consumers have such wide access to a diverse range of sellers also helps them to save money as they can search, shop around and compare prices quickly and easily.

DISADVANTAGES OF E BUSINESS

Although the Internet has continued to prop up mom-and-pop e-businesses to compete alongside large companies in meeting customer need for variety, online-based stores still face several challenges. Operating your e-business successfully means going beyond offering access across a range of platforms -- from desktops to smartphones -- you must provide timely delivery and transaction data security. Just as your website offers the convenience of purchasing at the click of a button, you need to invest in systems that ensure public trust and confidence in your company.1. Security and Integrity Issues Hackers are adept at manipulating online business websites to harvest financial data. The information you require of your customers -- shipping address, credit card details and email -- potentially provides ample resource for hackers to initiate identity theft. This risk keeps some people from shopping online. You have to assure customers of the security of their personal data as they interact with your e-business. Ensure site integrity by investing time and money in learning and implementing good security measures, including digital signatures and data encryption, to protect client information lest it falls in the wrong hands and lawsuits ensue.Purchase to Delivery Time As much as the Internet has the advantage of processing orders and payments in real time, this has little benefit to the customer who requires the purchased item equally fast. Unlike brick-and-mortar businesses, purchases from your e-business typically have a time lag from purchase to delivery of the physical goods. Some customers would rather go to the physical store and pick up the item unless it's of a digital kind, such as an e-book or music file.Momentary Intangibility The personal touch is a missing factor in online transactions. An e-business normally offers the customer no physical proximity to the items purchased until delivery. Experiencing the feel, taste or smell of a product can influence the decision to buy. Unless it's a repeat buyer, your typical customer would want to feel the texture of the leather wallet, the comfort of the shoe or smell the cologne before ordering. The absence of an opportunity to physically examine the product places a major limitation on e-businesses.Sectoral Limitations Not every company can participate in e-commerce. Some are challenged in terms of expertise and availability of technology, while others carry products that can't be shipped economically. For example, some large, odd-sized items may be uneconomical to transport across state lines, making it difficult to sell them online. Other products may be legally restricted, depending on state and federal laws, such as certain explosives, ammunition and alcoholic beverages.

Online Selling Opportunities

The internet has become the ultimate marketplace for buyers and sellers to do business. This is because practically anything can be bought or sold online. Anyone with internet access has the ability to advertise a product or service for sale and any internet user can respond with an offer to buy it. The limitations to online buying and selling only occur when it comes time to paying for or delivering a product or service, however, there are numerous solutions to these issues.The most common form of e-business is using a website to sell products to consumers either online or by encouraging them to visit a physical store. Sellers are able to post up as much information as they like about their product and provide images, reviews, testimonials or even video demonstrations to entice customers into buying the item.In some cases,consumerscan learn more about a product on the internet than they could by visiting a store and talking to a salesperson. A potential customer is able to conduct extensive research on the internet and compile a list of all their options, compare prices and features, readabout other customer's experiences and make a decision based on what they discover. The availability of information is one of the reasons why shopping online has become so popular.Specialist stores catering for niche markets are one type of business that has gained the most benefit from the internet. The opportunities for selling unique, high quality, hard to locate or customised products can sometimes be limited with traditional stores. Generally, there is simply not enough of a market in any location to support a shop that caters for a very small market. However, taking a niche business online can be very successful as you have access to a wider customer base, fewer overhead expenses and more opportunities to target your specialist market.Businesses that specialise in selling information can also find many potential benefits in moving their operations online. The internet is based on a collection of information and many businesses have been able to become successful by selling information online. However, finding, creating and providing high quality information that customer's value can be difficult due to the vast amount of useful information made available for free.Professional services can also be sold on the internet. You can use websites to attract and recruit new clients and use email to communicate with your existing clients about a range of issues. Professional services of any type can benefit from utilising the internet, particularly those that are able to provide their service online. For example, many IT support companies use the internet to solve their client's problems online.Creating a popular or informativewebsitealso gives you the opportunity to sell advertising space. There are many websites that don't sell any products or services to the public but are still able to generate income by charging a fee to allow other businesses to advertise on their site.There are virtually no limitations to how you can use e-business to generate income. From tiny, niche sellers to global corporations, practically anyone can build a successful e-business provided they have something that online consumers want.

Successful E-business Models

Different organisations and individuals will choose to use different levels of e-business. Some businesses will only use email for communication and don't require a website, whereas others will operate almost entirely online. There are a number of successfule-business modelsthat you should consider when determining what level of e-business is right for your individual circumstances.An important point that you need to consider is the difference between operating an e-business and using a website to promote your traditional business. An e-business model maintains that revenue is generated as a direct result of operating some part of the business online, as opposed to just using the internet as a promotional method. Remember that none of the following e-business models have to be used exclusively, you can use them in addition to an existing traditional business model.Online shopfronts are one of the most popular and common types of e-business sites. Online shops are designed to provide information to consumers about products and services and to accept orders online.Generally, online shops utilise a "shopping cart" application that allows users to complete an online order form and process orders and payments. Physical products are then shipped to the customer or electronic products can be downloaded instantly.Online shops are only successful when they are able to offer something equal or better than traditional business models.Customerswant to be able to save time or save money when purchasing online. They also expect similar levels of customer service and the option to deal with a real person if a problem arises.It is possible to create a commercial viable e-business without actually selling products or services to the general public. Popular websites that feature high amounts of web traffic are able rent out advertising space on the website to other businesses for a fee. The key is to build a website that offers targeted, high quality content that users will return to view over and over, and to offer advertising to businesses that are in some way related to the information you provide.Some e-businesses operate simply by offering content that is useful enough for users to register and pay a fee to use. However, it can be difficult for paid subscription services to compete in a market where there is extensive information available for free. You need to be sure that people value what you offer highly enough to want to pay for it before you consider charging a fee for your online content.Online auctions are another popular and relatively successful model for operating a business online. Sellers post up items at a reserve price, and registered users bid on the item until the end of the auction. The website operator usually collects a small fee after the item is sold as commission on the transaction. Internet auctions are popular as they allow people to sell their products even if they aren't interested or don't have the need to set up a business or website of their own.E-learning is an expanding industry in which businesses can operate online. Offering education and training packages that can be completed either partially or entirely online can be a way for people with specialist skills to educate others about a particular area of interest. It could be in the form of an accredited program with a registered training organisation or as simple as posting up a how-to guide, advice and instructional video about a particular area of interest.

CHARACTERSTICS OF E BUSINESSAn e-business network is one that allows businesses to communicate via electronic means, but the term is most often used to denote business networks that use the Internet to conduct e-commerce and related activities. E-business networks allow businesses to communicate with each other and transmit information quickly and efficiently at cheaper costs than using a traditional electronic data interchange, resulting in lower prices for consumers while also facilitating collaborations between companies. This leads to innovative new products, knowledge exchange and reduced time-to-market.New Franchise OpportunityLow investment of 40-60 Lakh. High returns,booming industry.Know more!frankfinn.in/FranchiseE-business NetworkE-business networks vary in their setups and topologies, but generally are Internet-based networks that allow many businesses to access repositories of data and information, such as a shared database or a trade board with many listed suppliers. An e-business network allows its members to communicate with each other via electronic media, primarily using the Internet. Businesses typically use e-business networks to facilitate and support their supply chains, conduct e-commerce, trade, pay taxes and obtain and disseminate information. E-business networks allow users to share knowledge bases, data and files, and often have groupware and collaborative elements.BarriersE-business networks powered by the Internet leverage existing Web technologies and are therefore cheaper to implement than traditional electronic data interchanges, or EDIs, that big corporations used to require their partners to use in order to join their supply and distribution chains. This has lowered or eliminated the barriers to trade that small businesses once faced, which has opened trade and supply markets to greater competition. E-business networks are now often used alongside EDIs, allowing small businesses to access trade opportunities that were previously closed to them.PricesE-business networks leverage the Internet, so they have opened the door to global competition. As suppliers from cheaper markets compete with local suppliers, the competition tends to push prices down. This results in lower prices for consumers and can have stimulating effects on the wider economy. Greater competition often forces companies to innovate in order to succeed, which also creates improved products and more convenient services for customers while keeping prices down.CollaborationBusinesses can use e-business networks to share data, knowledge and pricing information. This allows them to collaborate on projects as well as reduce their research and development budgets and other resource costs, as they can eliminate redundancies and inefficiencies in their processes while honing their core competencies. Consumers benefit from faster technological advances and lower prices. This is especially true in the information technology and aviation industries, where products are usually the result of collaborative efforts.