E-business

Overview

E-business, or electronic business, refers to the application of information and communication technologies (ICT) in support of all the activities of business. Commerce constitutes the exchange of products and services between businesses, groups and 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, groups and other businesses, while e-business refers to business with the help of the internet.

History

The term "e-business" was coined by IBM's marketing and Internet team in 1996. In 1997, IBM, with its agency Ogilvy & Mather, began to use its foundation in IT solutions and expertise to market itself as a leader of conducting business on the Internet through the term "e-business". Then CEO, Louis V. Gerstner, Jr. described e-business as “an IBM initiative where we share – with customers, business partners, and even competitors – our profound conviction that the Internet is quickly transforming the way business is done.”

E-business Systems

E-business systems are a set of online technologies, equipment and tools that a business uses to conduct business via the Internet. These systems are the key components of a company's business strategy and must be carefully managed to ensure the business's success. E-business systems can include applications for customer relationship management (CRM), supply chain management (SCM), enterprise resource planning (ERP), and business intelligence (BI).

Customer Relationship Management (CRM)

CRM systems are used to manage a company's interactions with current and potential customers. They use data analysis about a customer's history with a company to improve business relationships with customers, specifically focusing on customer retention and ultimately driving sales growth.

Supply Chain Management (SCM)

SCM systems manage the flow of goods, data, and finances related to a product or service from the acquisition of raw materials to the delivery of the product at its final destination. This involves coordinating and integrating these flows both within and among companies.

Enterprise Resource Planning (ERP)

ERP systems are software systems that integrate all departments and functions across a company onto a single computer system that can serve all those different departments' particular needs. ERP integrates processes needed to run a company with the backend information technology.

Business Intelligence (BI)

BI systems are technologies, applications and practices for the collection, integration, analysis, and presentation of business information and also sometimes to the knowledge and skills necessary in analyzing business information.

E-business Models

E-business models are conceptual structures that support the viability of a product or company and explain how the company operates, makes money, and how it intends to achieve its goals. All business models also entail a product and/or service.

B2B Model

The B2B model (business to business) is the largest type of e-business. In this model, companies are both suppliers and clients at the same time. The final buyer is the consumer with his/her purchase of products in an online store.

B2C Model

The B2C model (business to consumer) involves companies selling to the general public through catalogues utilizing shopping cart software. The B2C model is the most common business model, so there are many unique approaches under this umbrella.

C2C Model

The C2C model (consumer to consumer) is a type of e-business where consumers trade products, services and information with each other online. These transactions are generally conducted through a third party that provides an online platform where the transactions are actually carried out.

C2B Model

The C2B model (consumer to business) is a type of e-business where consumers post their projects with a set budget online and companies bid on the project. The consumer reviews the bids and selects the company that will complete the project.

Advantages and Disadvantages of E-business

E-business has both advantages and disadvantages. It offers a number of benefits to companies, but there are also potential drawbacks that companies must consider.

Advantages

Global reach: E-business allows businesses to reach global markets without substantial investment.
Lower cost: E-business reduces costs in many ways, including through streamlined operations, reduced personnel, less office space, and lower marketing and advertising expenses.
Increased speed: E-business transactions can be conducted at any time, reducing cycle time and increasing productivity.
Enhanced customer service: E-business allows for improved customer service through greater flexibility in responding to customer needs and expectations.

Disadvantages

Security: The open nature of the Internet makes it vulnerable to a variety of security risks, which can damage a company's reputation and customer trust.
Privacy issues: E-business activities raise a host of privacy issues that companies must address.
Technological issues: E-business requires a sophisticated technological infrastructure that can be expensive and difficult to manage.
Regulatory issues: E-business activities are subject to a wide range of laws and regulations, which can vary by country.

Future of E-business

The future of e-business is bright. According to eMarketer, worldwide e-commerce sales will reach $4 trillion by 2020, making up 14.6% of total retail spending that year. Mobile commerce, or m-commerce, is a rapidly growing new avenue of e-business. It's largely driven by the expanding market and influence of smartphones and millennials' comfort with shopping online. In 2016, the m-commerce sector enjoyed a 39.1% increase in sales compared to the previous year.

References

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