E-BUSINESS+&+E-COMMERCE

E- Commerce, E- Process, E- Business.

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=E-Commerce and E-Business/Concepts and Definitions= **[|E-Commerce and E-Business]**

[|Preface] — [|Introduction] — **Concepts and Definitions** — [|E-Commerce Applications: Issues and Prospects] — [|E-Commerce in Developing Countries] — [|Notes] — [|For Further Reading] — [|Acknowledgment] — [|About the Author]



What is e-commerce?
Electronic commerce or e-commerce refers to a wide range of online business activities for products and services. [[|1]] It also pertains to “any form of business transaction in which the parties interact electronically rather than by physical exchanges or direct physical contact.” [[|2]] E-commerce is usually associated with buying and selling over the Internet, or conducting any transaction involving the transfer of ownership or rights to use goods or services through a computer-mediated network. [[|3]] Though popular, this definition is not comprehensive enough to capture recent developments in this new and revolutionary business phenomenon. A more complete definition is: E-commerce is the use of electronic communications and digital information processing technology in business transactions to create, transform, and redefine relationships for value creation between or among organizations, and between organizations and individuals. [[|4]] International Data Corp (IDC) estimates the value of global e-commerce in 2000 at US$350.38 billion. This is projected to climb to as high as US$3.14 trillion by 2004. IDC also predicts an increase in Asia’s percentage share in worldwide e-commerce revenue from 5% in 2000 to 10% in 2004 (See Figure 1).
 * Figure 1: Worldwide E-Commerce Revenue, 2000 and 2004 (as a % share of each country/region)**
 * [[image:http://upload.wikimedia.org/wikibooks/en/5/56/Eprimer_ecom_figure_1.jpg width="500" height="248" caption="Eprimer ecom figure 1.jpg" link="http://en.wikibooks.org/wiki/File:Eprimer_ecom_figure_1.jpg"]] ||

Asia-Pacific e-commerce revenues are projected to increase from $76.8 billion at year-end of 2001 to $338.5 billion by the end of 2004. //Is e-commerce the same as e-business?//

While some use e-commerce and e-business interchangeably, they are distinct concepts. In e-commerce, information and communications technology (ICT) is used in inter-business or inter-organizational transactions (transactions between and among firms/organizations) and in business-to-consumer transactions (transactions between firms/organizations and individuals). In e-business, on the other hand, ICT is used to enhance one’s business. It includes any process that a business organization (either a for-profit, governmental or non-profit entity) conducts over a computer-mediated network. A more comprehensive definition of e-business is: //“The transformation of an organization’s processes to deliver additional customer value through the application of technologies, philosophies and computing paradigm of the new economy.”//Three primary processes are enhanced in e-business: [[|5]] 1. **Production processes**, which include procurement, ordering and replenishment of stocks; processing of payments; electronic links with suppliers; and production control processes, among others; 2. **Customer-focused processes**, which include promotional and marketing efforts, selling over the Internet, processing of customers’ purchase orders and payments, and customer support, among others; and 3. **Internal management processes**, which include employee services, training, internal information-sharing, video-conferencing, and recruiting. Electronic applications enhance information flow between production and sales forces to improve sales force productivity. Workgroup communications and electronic publishing of internal business information are likewise made more efficient. [[|6]]

[ Is the Internet economy synonymous with e-commerce and e-business?
The Internet economy is a broader concept than e-commerce and e-business. It includes e-commerce and e-business. The CREC (Center for Research in Electronic Commerce) at the University of Texas has developed a conceptual framework for how the Internet economy works. The framework shows four layers of the Internet economy-the three mentioned above and a fourth called intermediaries (see Table 1). //Based on Center for Research in Electronic Commerce, University of Texas, "Measuring the Internet Economy," 6 June 2000; available from [|http://www.internetindicators.com]// This image is available under the terms of [|GNU Free Documentation License] and [|Creative Commons Attribution License 2.5]
 * Figure 2. Table 1. Internet Economy Conceptual Frame**
 * [[image:http://upload.wikimedia.org/wikibooks/en/thumb/7/7f/Eprimer_ecom_table_1.jpg/500px-Eprimer_ecom_table_1.jpg width="500" height="594" caption="Eprimer ecom table 1.jpg" link="http://en.wikibooks.org/wiki/File:Eprimer_ecom_table_1.jpg"]] ||

The major different types of e-commerce are: business-to-business (B2B); business-to-consumer (B2C); business-to-government (B2G); consumer-to-consumer (C2C); and mobile commerce (m-commerce).
//What is B2B e-commerce?// B2B e-commerce is simply defined as e-commerce between companies. This is the type of e-commerce that deals with relationships between and among businesses. About 80% of e-commerce is of this type, and most experts predict that B2B e-commerce will continue to grow faster than the B2C segment. The B2B market has two primary components: e-frastructure and e-markets. E-frastructure is the architecture of B2B, primarily consisting of the following:9 E-markets are simply defined as Web sites where buyers and sellers interact with each other and conduct transactions.10 The more common B2B examples and best practice models are IBM, Hewlett Packard (HP), Cisco and Dell. Cisco, for instance, receives over 90% of its product orders over the Internet. Most B2B applications are in the areas of supplier management (especially purchase order processing), inventory management (i.e., managing order-ship-bill cycles), distribution management (especially in the transmission of shipping documents), channel management (i.e., information dissemination on changes in operational conditions), and payment management (e.g., electronic payment systems or EPS).11 eMarketer projects an increase in the share of B2B e-commerce in total global e-commerce from 79.2% in 2000 to 87% in 2004 and a consequent decrease in the share of B2C e-commerce from 20.8% in 2000 to only 13% in 2004 (Figure 3). This image is available under the terms of [|GNU Free Documentation License] and [|Creative Commons Attribution License 2.5] Likewise B2B growth is way ahead of B2C growth in the Asia-Pacific region. According to a 2001 eMarketer estimate, B2B revenues in the region are expected to exceed $300 billion by 2004. Table 2 shows the projected size of B2B e-commerce by region for the years 2000-2004. This image is available under the terms of [|GNU Free Documentation License] and [|Creative Commons Attribution License 2.5] The impact of B2B markets on the economy of developing countries is evident in the following: //Transaction costs//. There are three cost areas that are significantly reduced through the conduct of B2B e-commerce. First is the reduction of search costs, as buyers need not go through multiple intermediaries to search for information about suppliers, products and prices as in a traditional supply chain. In terms of effort, time and money spent, the Internet is a more efficient information channel than its traditional counterpart. In B2B markets, buyers and sellers are gathered together into a single online trading community, reducing search costs even further. Second is the reduction in the costs of processing transactions (e.g. invoices, purchase orders and payment schemes), as B2B allows for the automation of transaction processes and therefore, the quick implementation of the same compared to other channels (such as the telephone and fax). Efficiency in trading processes and transactions is also enhanced through the B2B e-market’s ability to process sales through online auctions. Third, online processing improves inventory management and logistics. //Disintermediation//. Through B2B e-markets, suppliers are able to interact and transact directly with buyers, thereby eliminating intermediaries and distributors. However, new forms of intermediaries are emerging. For instance, e-markets themselves can be considered as intermediaries because they come between suppliers and customers in the supply chain. //Transparency in pricing//.Among the more evident benefits of e-markets is the increase in price transparency. The gathering of a large number of buyers and sellers in a single e-market reveals market price information and transaction processing to participants. The Internet allows for the publication of information on a single purchase or transaction, making the information readily accessible and available to all members of the e-market. Increased price transparency has the effect of pulling down price differentials in the market. In this context, buyers are provided much more time to compare prices and make better buying decisions. Moreover, B2B e-markets expand borders for dynamic and negotiated pricing wherein multiple buyers and sellers collectively participate in price-setting and two-way auctions. In such environments, prices can be set through automatic matching of bids and offers. In the e-marketplace, the requirements of both buyers and sellers are thus aggregated to reach competitive prices, which are lower than those resulting from individual actions. //Economies of scale and network effects//. The rapid growth of B2B e-markets creates traditional supply-side cost-based economies of scale. Furthermore, the bringing together of a significant number of buyers and sellers provides the demand-side economies of scale or network effects. Each additional incremental participant in the e-market creates value for all participants in the demand side. More participants form a critical mass, which is key in attracting more users to an e-market. //What is B2C e-commerce?// Business-to-consumer e-commerce, or commerce between companies and consumers, involves customers gathering information; purchasing physical goods (i.e., tangibles such as books or consumer products) or information goods (or goods of electronic material or digitized content, such as software, or e-books); and, for information goods, receiving products over an electronic network.12 It is the second largest and the earliest form of e-commerce. Its origins can be traced to online retailing (or e-tailing).13 Thus, the more common B2C business models are the online retailing companies such as Amazon.com, Drugstore.com, Beyond.com, Barnes and Noble and ToysRus. Other B2C examples involving information goods are E-Trade and Travelocity. The more common applications of this type of e-commerce are in the areas of purchasing products and information, and personal finance management, which pertains to the management of personal investments and finances with the use of online banking tools (e.g., Quicken).14 eMarketer estimates that worldwide B2C e-commerce revenues will increase from US$59.7 billion in 2000 to US$428.1 billion by 2004. Online retailing transactions make up a significant share of this market. eMarketer also estimates that in the Asia-Pacific region, B2C revenues, while registering a modest figure compared to B2B, nonetheless went up to $8.2 billion by the end of 2001, with that figure doubling at the end of 2002-at total worldwide B2C sales below 10%. B2C e-commerce reduces transactions costs (particularly search costs) by increasing consumer access to information and allowing consumers to find the most competitive price for a product or service. B2C e-commerce also reduces market entry barriers since the cost of putting up and maintaining a Web site is much cheaper than installing a “brick-and-mortar” structure for a firm. In the case of information goods, B2C e-commerce is even more attractive because it saves firms from factoring in the additional cost of a physical distribution network. Moreover, for countries with a growing and robust Internet population, delivering information goods becomes increasingly feasible. //What is B2G e-commerce?// Business-to-government e-commerce or B2G is generally defined as commerce between companies and the public sector. It refers to the use of the Internet for public procurement, licensing procedures, and other government-related operations. This kind of e-commerce has two features: first, the public sector assumes a pilot/leading role in establishing e-commerce; and second, it is assumed that the public sector has the greatest need for making its procurement system more effective.15 Web-based purchasing policies increase the transparency of the procurement process (and reduces the risk of irregularities). To date, however, the size of the B2G e-commerce market as a component of total e-commerce is insignificant, as government e-procurement systems remain undeveloped. //What is C2C e-commerce?// Consumer-to-consumer e-commerce or C2C is simply commerce between private individuals or consumers. This type of e-commerce is characterized by the growth of electronic marketplaces and online auctions, particularly in vertical industries where firms/businesses can bid for what they want from among multiple suppliers.16 It perhaps has the greatest potential for developing new markets. This type of e-commerce comes in at least three forms: Consumer-to-business (C2B) transactions involve reverse auctions, which empower the consumer to drive transactions. A concrete example of this when competing airlines gives a traveler best travel and ticket offers in response to the traveler’s post that she wants to fly from New York to San Francisco. There is little information on the relative size of global C2C e-commerce. However, C2C figures of popular C2C sites such as eBay and Napster indicate that this market is quite large. These sites produce millions of dollars in sales every day. //What is m-commerce?// M-commerce (mobile commerce) is the buying and selling of goods and services through wireless technology-i.e., handheld devices such as cellular telephones and personal digital assistants (PDAs). Japan is seen as a global leader in m-commerce. As content delivery over wireless devices becomes faster, more secure, and scalable, some believe that m-commerce will surpass wireline e-commerce as the method of choice for digital commerce transactions. This may well be true for the Asia-Pacific where there are more mobile phone users than there are Internet users. Industries affected by m-commerce include: Forrester Research predicts US$3.4 billion sales closed using PDA and cell phones by 2005 (See Table 3). This image is available under the terms of [|GNU Free Documentation License] and [|Creative Commons Attribution License 2.5]
 * logistics - transportation, warehousing and distribution (e.g., Procter and Gamble);
 * application service providers - deployment, hosting and management of packaged software from a central facility (e.g., Oracle and Linkshare);
 * outsourcing of functions in the process of e-commerce, such as Web-hosting, security and customer care solutions (e.g., outsourcing providers such as eShare, NetSales, iXL Enterprises and Universal Access);
 * auction solutions software for the operation and maintenance of real-time auctions in the Internet (e.g., Moai Technologies and OpenSite Technologies);
 * content management software for the facilitation of Web site content management and delivery (e.g., Interwoven and ProcureNet); and
 * Web-based commerce enablers (e.g., Commerce One, a browser-based, XML-enabled purchasing automation software).
 * Figure 3. Share of B2B and B2C E-Commerce in Total Global E-Commerce (2000 and 2004)**
 * [[image:http://upload.wikimedia.org/wikibooks/en/thumb/d/d5/Eprimer_ecom_figure_2.jpg/600px-Eprimer_ecom_figure_2.jpg width="600" height="188" caption="Eprimer ecom figure 2.jpg" link="http://en.wikibooks.org/wiki/File:Eprimer_ecom_figure_2.jpg"]] ||
 * Figure 4. Projected B2B E-Commerce by Region, 2000-2004 ($billions)**
 * [[image:http://upload.wikimedia.org/wikibooks/en/thumb/0/04/Eprimer_ecom_table_2.jpg/600px-Eprimer_ecom_table_2.jpg width="600" height="254" caption="Eprimer ecom table 2.jpg" link="http://en.wikibooks.org/wiki/File:Eprimer_ecom_table_2.jpg"]] ||
 * Box 1. Benefits of B2B E-Commerce in Developing Markets**
 * auctions facilitated at a portal, such as eBay, which allows online real-time bidding on items being sold in the Web;
 * peer-to-peer systems, such as the Napster model (a protocol for sharing files between users used by chat forums similar to IRC) and other file exchange and later money exchange models; and
 * classified ads at portal sites such as Excite Classifieds and eWanted (an interactive, online marketplace where buyers and sellers can negotiate and which features “Buyer Leads & Want Ads”).
 * **Financial services**, including mobile banking (when customers use their handheld devices to access their accounts and pay their bills), as well as brokerage services (in which stock quotes can be displayed and trading conducted from the same handheld device);
 * **Telecommunications**, in which service changes, bill payment and account reviews can all be conducted from the same handheld device;
 * **Service/retail**, as consumers are given the ability to place and pay for orders on-the-fly; and
 * **Information services**, which include the delivery of entertainment, financial news, sports figures and traffic updates to a single mobile device.17
 * Figure 5. Table 3. Forrester’s M-Commerce Sales Predictions, 2001-2005**
 * [[image:http://upload.wikimedia.org/wikibooks/en/thumb/1/1c/Eprimer_ecom_table_3.jpg/600px-Eprimer_ecom_table_3.jpg width="600" height="193" caption="Eprimer ecom table 3.jpg" link="http://en.wikibooks.org/wiki/File:Eprimer_ecom_table_3.jpg"]] ||

What forces are fueling e-commerce?
There are at least three major forces fueling e-commerce: economic forces, marketing and customer interaction forces, and technology, particularly multimedia convergence.18 Economic integration is either external or internal. External integration refers to the electronic networking of corporations, suppliers, customers/clients, and independent contractors into one community communicating in a virtual environment (with the Internet as medium). Internal integration, on the other hand, is the networking of the various departments within a corporation, and of business operations and processes. This allows critical business information to be stored in a digital form that can be retrieved instantly and transmitted electronically. Internal integration is best exemplified by corporate intranets. Among the companies with efficient corporate intranets are Procter and Gamble, IBM, Nestle and Intel. SESAMi.NET is Asia’s largest B2B e-hub, a virtual exchange integrating and connecting businesses (small, medium or large) to trading partners, e-marketplaces and internal enterprise systems for the purpose of sourcing out supplies, buying and selling goods and services online in real time. The e-hub serves as the center for management of content and the processing of business transactions with support services such as financial clearance and information services. It is strategically and dynamically linked to the Global Trading Web (GTW), the world’s largest network of trading communities on the Internet. Because of this very important link, SESAMi reaches an extensive network of regional, vertical and industry-specific interoperable B2B e-markets across the globe. Brazil’s Submarino is a classic example of successful use of the Internet for improved customer service and support. From being a local Sao Paulo B2C e-commerce company selling books, CDs, video cassettes, DVDs, toys, electronic and computer products in Brazil, it expanded to become the largest company of its kind in Argentina, Mexico, Spain and Portugal. Close to a third of the 1.4 million Internet users in Brazil have made purchases through this site. To enhance customer service, Submarino has diversified into offering logistical and technological infrastructure to other retailers, which includes experience and expertise in credit analysis, tracking orders and product comparison systems. Moreover, the principle of universal access can be made more achievable with convergence. At present the high costs of installing landlines in sparsely populated rural areas is a disincentive to telecommunications companies to install telephones in these areas. Installing landlines in rural areas can become more attractive to the private sector if revenues from these landlines are not limited to local and long distance telephone charges, but also include cable TV and Internet charges. This development will ensure affordable access to information even by those in rural areas and will spare the government the trouble and cost of installing expensive landlines.21
 * Economic forces**.One of the most evident benefits of e-commerce is economic efficiency resulting from the reduction in communications costs, low-cost technological infrastructure, speedier and more economic electronic transactions with suppliers, lower global information sharing and advertising costs, and cheaper customer service alternatives.
 * Box 2. SESAMi.NET.: Linking Asian Markets through B2B Hubs**
 * Market forces.** Corporations are encouraged to use e-commerce in marketing and promotion to capture international markets, both big and small. The Internet is likewise used as a medium for enhanced customer service and support. It is a lot easier for companies to provide their target consumers with more detailed product and service information using the Internet.
 * Box 3. Brazil’s Submarino19: Improving Customer Service through the Internet**
 * Technology forces**. The development of ICT is a key factor in the growth of e-commerce. For instance, technological advances in digitizing content, compression and the promotion of open systems technology have paved the way for the convergence of communication services into one single platform. This in turn has made communication more efficient, faster, easier, and more economical as the need to set up separate networks for telephone services, television broadcast, cable television, and Internet access is eliminated. From the standpoint of firms/businesses and consumers, having only one information provider means lower communications costs.20

What are the components of a typical successful e-commerce transaction loop?
E-commerce does not refer merely to a firm putting up a Web site for the purpose of selling goods to buyers over the Internet. For e-commerce to be a competitive alternative to traditional commercial transactions and for a firm to maximize the benefits of e-commerce, a number of technical as well as enabling issues have to be considered. A typical e-commerce transaction loop involves the following major players and corresponding requisites: The //Seller// should have the following components: //Transaction partners// include: //Consumers// (in a business-to-consumer transaction) who: //Firms/Businesses// (in a business-to-business transaction) that together form a critical mass of companies (especially within supply chains) with Internet access and the capability to place and take orders over the Internet. //Government//, to establish: And finally, //the Internet//, the successful use of which depends on the following: For e-commerce to grow, the above requisites and factors have to be in place. The least developed factor is an impediment to the increased uptake of e-commerce as a whole. For instance, a country with an excellent Internet infrastructure will not have high e-commerce figures if banks do not offer support and fulfillment services to e-commerce transactions. In countries that have significant e-commerce figures, a positive feedback loop reinforces each of these factors.22
 * A corporate Web site with e-commerce capabilities (e.g., a secure transaction server);
 * A corporate intranet so that orders are processed in an efficient manner; and
 * IT-literate employees to manage the information flows and maintain the e-commerce system.
 * Banking institutions that offer transaction clearing services (e.g., processing credit card payments and electronic fund transfers);
 * National and international freight companies to enable the movement of physical goods within, around and out of the country. For business-to-consumer transactions, the system must offer a means for cost-efficient transport of small packages (such that purchasing books over the Internet, for example, is not prohibitively more expensive than buying from a local store); and
 * Authentication authority that serves as a trusted third party to ensure the integrity and security of transactions.
 * Form a critical mass of the population with access to the Internet and disposable income enabling widespread use of credit cards; and
 * Possess a mindset for purchasing goods over the Internet rather than by physically inspecting items.
 * A legal framework governing e-commerce transactions (including electronic documents, signatures, and the like); and
 * Legal institutions that would enforce the legal framework (i.e., laws and regulations) and protect consumers and businesses from fraud, among others.
 * A robust and reliable Internet infrastructure; and
 * A pricing structure that doesn’t penalize consumers for spending time on and buying goods over the Internet (e.g., a flat monthly charge for both ISP access and local phone calls).

How is the Internet relevant to e-commerce?
The Internet allows people from all over the world to get connected inexpensively and reliably. As a technical infrastructure, it is a global collection of networks, connected to share information using a common set of protocols.23 Also, as a vast network of people and information,24 the Internet is an enabler for e-commerce as it allows businesses to showcase and sell their products and services online and gives potential customers, prospects, and business partners access to information about these businesses and their products and services that would lead to purchase. Before the Internet was utilized for commercial purposes, companies used private networks-such as the EDI or Electronic Data Interchange-to transact business with each other. That was the early form of e-commerce. However, installing and maintaining private networks was very expensive. With the Internet, e-commerce spread rapidly because of the lower costs involved and because the Internet is based on open standards.25

How important is an intranet for a business engaging in e-commerce?
An intranet aids in the management of internal corporate information that may be interconnected with a company’s e-commerce transactions (or transactions conducted outside the intranet). Inasmuch as the intranet allows for the instantaneous flow of internal information, vital information is simultaneously processed and matched with data flowing from external e-commerce transactions, allowing for the efficient and effective integration of the corporation’s organizational processes. In this context, corporate functions, decisions and processes involving e-commerce activities are more coherent and organized. The proliferation of intranets has caused a shift from a hierarchical command-and-control organization to an information-based organization. This shift has implications for managerial responsibilities, communication and information flows, and workgroup structures.

Aside from reducing the cost of doing business, what are the advantages of e-commerce for businesses?
Amazon.com is a virtual bookstore. It does not have a single square foot of bricks and mortar retail floor space. Nonetheless, Amazon.com is posting an annual sales rate of approximately $1.2 billion, equal to about 235 Barnes & Noble (B&N) superstores. Due to the efficiencies of selling over the Web, Amazon has spent only $56 million on fixed assets, while B&N has spent about $118 million for 235 superstores. (To be fair, Amazon has yet to turn a profit, but this does not obviate the point that in many industries doing business through e-commerce is cheaper than conducting business in a traditional brick-and-mortar company.) However, this does not discount the point that without a good e-business strategy, e-commerce may in some cases discriminate against SMEs because it reveals proprietary pricing information. A sound e-business plan does not totally disregard old economy values. The dot-com bust is proof of this. According to Webmergers.com statistics, about 862 dot-com companies have failed since the height of the dot-com bust in January 2000. Majority of these were e-commerce and content companies. The shutdown of these companies was followed by the folding up of Internet-content providers, infrastructure companies, Internet service providers, and other providers of dial-up and broadband Internet-access services.26 From the perspective of the investment banks, the dot-com frenzy can be likened to a gamble where the big money players were the venture capitalists and those laying their bets on the table were the small investors. The bust was primarily caused by the players’ unfamiliarity with the sector, coupled with failure to cope with the speed of the Internet revolution and the amount of capital in circulation.27 Internet entrepreneurs set the prices of their goods and services at very low levels to gain market share and attract venture capitalists to infuse funding. The crash began when investors started demanding hard earnings for sky-high valuations. The Internet companies also spent too much on overhead before even gaining a market share.28
 * E-commerce serves as an “equalizer”**. It enables start-up and small- and medium-sized enterprises to reach the global market.
 * Box 4. Leveling the Playing Field through E-commerce: The Case of Amazon.com**
 * Box 5. Lessons from the Dot Com Frenzy**
 * E-commerce makes “mass customization” possible**. E-commerce applications in this area include easy-to-use ordering systems that allow customers to choose and order products according to their personal and unique specifications. For instance, a car manufacturing company with an e-commerce strategy allowing for online orders can have new cars built within a few days (instead of the several weeks it currently takes to build a new vehicle) based on customer’s specifications. This can work more effectively if a company’s manufacturing process is advanced and integrated into the ordering system.
 * E-commerce allows “network production.**” This refers to the parceling out of the production process to contractors who are geographically dispersed but who are connected to each other via computer networks. The benefits of network production include: reduction in costs, more strategic target marketing, and the facilitation of selling add-on products, services, and new systems when they are needed. With network production, a company can assign tasks within its non-core competencies to factories all over the world that specialize in such tasks (e.g., the assembly of specific components).

How is e-commerce helpful to the consumer?
In C2B transactions, customers/consumers are given more influence over what and how products are made and how services are delivered, thereby broadening consumer choices. E-commerce allows for a faster and more open process, with customers having greater control. E-commerce makes information on products and the market as a whole readily available and accessible, and increases price transparency, which enable customers to make more appropriate purchasing decisions.

How are business relationships transformed through e-commerce?
E-commerce transforms old economy relationships (vertical/linear relationships) to new economy relationships characterized by end-to-end relationship management solutions (integrated or extended relationships).

How does e-commerce link customers, workers, suppliers, distributors and competitors?
E-commerce facilitates organization networks, wherein small firms depend on “partner” firms for supplies and product distribution to address customer demands more effectively. To manage the chain of networks linking customers, workers, suppliers, distributors, and even competitors, an integrated or extended supply chain management solution is needed. //Supply chain management// (SCM) is defined as the supervision of materials, information, and finances as they move from supplier to manufacturer to wholesaler to retailer to consumer. It involves the coordination and integration of these flows both within and among companies. The goal of any effective supply chain management system is timely provision of goods or services to the next link in the chain (and ultimately, the reduction of inventory within each link).29 There are three main flows in SCM, namely: Some SCM applications are based on open data models that support the sharing of data both inside and outside the enterprise, called the extended enterprise, and includes key suppliers, manufacturers, and end customers of a specific company. Shared data resides in diverse database systems, or data warehouses, at several different sites and companies. Sharing this data “upstream” (with a company’s suppliers) and “downstream” (with a company’s clients) allows SCM applications to improve the time-to-market of products and reduce costs. It also allows all parties in the supply chain to better manage current resources and plan for future needs.30 This image is available under the terms of [|GNU Free Documentation License] and [|Creative Commons Attribution License 2.5]
 * The product flow, which includes the movement of goods from a supplier to a customer, as well as any customer returns or service needs;
 * The information flow, which involves the transmission of orders and the update of the status of delivery; and
 * The finances flow, which consists of credit terms, payment schedules, and consignment and title ownership arrangements.
 * Figure 6. Old Economy Relationships vs. New Economy Relationships**
 * [[image:http://upload.wikimedia.org/wikibooks/en/thumb/e/e5/Eprimer_ecom_figure_3.jpg/600px-Eprimer_ecom_figure_3.jpg width="600" height="176" caption="Eprimer ecom figure 3.jpg" link="http://en.wikibooks.org/wiki/File:Eprimer_ecom_figure_3.jpg"]] ||





Advantage and Disadvantage of eCommerce
E-commerce provides many new ways for businesses and consumers to communicate and conduct business. There are a number of advantages and disadvantages of conducting business in this manner. > ===E-commerce advantages=== Some advantages that can be achieved from e-commerce include: As a further thought, many businesses find it easier to buy and sell in U.S. dollars: it is effectively the major currency of the Internet. In this context, global online customers can find the concept of peculiar and unfamiliar currencies disconcerting. Some businesses find they can achieve higher prices online and in US dollars than they would achieve selling locally or nationally. Given that banks often charge fees for converting currencies, this is another reason to investigate all of your (national and international) options for accepting and making online payments. > In brief, it is useful to take a global view with regard the potential and organisation of your e-commerce activities, especially if you are targeting global customers. Some of these advantages and their surrounding issues are discussed below in further detail. > ===E-commerce disadvantages and constraints=== Some disadvantages and constraints of e-commerce include the following. Reflecting some of the comments above, the following chart (Figure 1.6) shows some of the complaints made by Australian e-consumers.
 * [[image:http://www.ifoundries.com/blog/wp-content/uploads/2009/03/ecommerce-website-development.png width="250" height="250" caption="ecommerce-website-development" link="http://www.ifoundries.com/blog/wp-content/uploads/2009/03/ecommerce-website-development.png"]]
 * **Being able to conduct business 24 x 7 x 365** . E-commerce systems can operate all day every day. Your physical storefront does not need to be open in order for customers and suppliers to be doing business with you electronically.
 * **Access the global marketplace** . The Internet spans the world, and it is possible to do business with any business or person who is connected to the Internet. Simple local businesses such as specialist record stores are able to market and sell their offerings internationally using e-commerce. This global opportunity is assisted by the fact that, unlike traditional communications methods, users are not charged according to the distance over which they are communicating.
 * **Speed.** Electronic communications allow messages to traverse the world almost instantaneously. There is no need to wait weeks for a catalogue to arrive by post: that communications delay is not a part of the Internet / e-commerce world.
 * **Marketspace.** The market in which web-based businesses operate is the global market. It may not be evident to them, but many businesses are already facing international competition from web-enabled businesses.
 * **Opportunity to reduce costs.** The Internet makes it very easy to ’shop around’ for products and services that may be cheaper or more effective than we might otherwise settle for. It is sometimes possible to, through some online research, identify original manufacturers for some goods – thereby bypassing wholesalers and achieving a cheaper price.
 * **Computer platform-independent** . ‘Many, if not most, computers have the ability to communicate via the Internet independent of operating systems and hardware. Customers are not limited by existing hardware systems’ (Gascoyne & Ozcubukcu, 1997:87).
 * **Efficient applications development environment** – ‘In many respects, applications can be more efficiently developed and distributed because the can be built without regard to the customer’s or the business partner’s technology platform. Application updates do not have to be manually installed on computers. Rather, Internet-related technologies provide this capability inherently through automatic deployment of software updates’ (Gascoyne & Ozcubukcu, 1997:87).
 * **Allowing customer self service and ‘customer outsourcing’.** People can interact with businesses at any hour of the day that it is convenient to them, and because these interactions are initiated by customers, the customers also provide a lot of the data for the transaction that may otherwise need to be entered by business staff. This means that some of the work and costs are effectively shifted to customers; this is referred to as ‘customer outsourcing’.
 * **Stepping beyond borders to a global view.** Using aspects of e-commerce technology can mean your business can source and use products and services provided by other businesses in other countries. This seems obvious enough to say, but people do not always consider the implications of e-commerce. For example, in many ways it can be easier and cheaper to host and operate some e-commerce activities outside Australia. Further, because many e-commerce transactions involve credit cards, many businesses in Australia need to make arrangements for accepting online payments. However a number of major Australian banks have tended to be unhelpful laggards on this front, charging a lot of money and making it difficult to establish these arrangements – particularly for smaller businesses and/or businesses that don’t fit into a traditional-economy understanding of business. In some cases, therefore, it can be easier and cheaper to set up arrangements which bypass this aspect of the Australian banking system. Admittedly, this can create some grey areas for legal and taxation purposes, but these can be dealt with. And yes these circumstances do have implications for Australia’s national competitiveness and the competitiveness of our industries and businesses.
 * **A new marketing channel.** The Internet provides an important new channel to sell to consumers. Peterson et al. (1999) suggest that, as a marketing channel, the Internet has the following characteristics:
 * the ability to inexpensively store vast amounts of information at different virtual locations
 * the availability of powerful and inexpensive means of searching, organising, and disseminating such information
 * interactivity and the ability to provide information on demand
 * the ability to provide perceptual experiences that are far superior to a printed catalogue, although not as rich as personal inspection
 * the capability to serve as a transaction medium
 * the ability to serve as a physical distribution medium for certain goods (e.g., software)
 * relatively low entry and establishment costs for sellers
 * no other existing marketing channel possesses all of these characteristics.
 * **Time for delivery of physical products** . It is possible to visit a local music store and walk out with a compact disc, or a bookstore and leave with a book. E-commerce is often used to buy goods that are not available locally from businesses all over the world, meaning that physical goods need to be delivered, which takes time and costs money. In some cases there are ways around this, for example, with electronic files of the music or books being accessed across the Internet, but then these are not physical goods.
 * **Physical product, supplier & delivery uncertainty** . When you walk out of a shop with an item, it’s yours. You have it; you know what it is, where it is and how it looks. In some respects e-commerce purchases are made on trust. This is because, firstly, not having had physical access to the product, a purchase is made on an expectation of what that product is and its condition. Secondly, because supplying businesses can be conducted across the world, it can be uncertain whether or not they are legitimate businesses and are not just going to take your money. It’s pretty hard to knock on their door to complain or seek legal recourse! Thirdly, even if the item is sent, it is easy to start wondering whether or not it will ever arrive.
 * **Perishable goods** . Forget about ordering a single gelato ice cream from a shop in Rome! Though specialised or refrigerated transport can be used, goods bought and sold via the Internet tend to be durable and non-perishable: they need to survive the trip from the supplier to the purchasing business or consumer. This shifts the bias for perishable and/or non-durable goods back towards traditional supply chain arrangements, or towards relatively more local e-commerce-based purchases, sales and distribution. In contrast, durable goods can be traded from almost anyone to almost anyone else, sparking competition for lower prices. In some cases this leads to **disintermediation** in which intermediary people and businesses are bypassed by consumers and by other businesses that are seeking to purchase more directly from manufacturers.
 * **Limited and selected sensory information.** The Internet is an effective conduit for visual and auditory information: seeing pictures, hearing sounds and reading text. However it does not allow full scope for our senses: we can see pictures of the flowers, but not smell their fragrance; we can see pictures of a hammer, but not feel its weight or balance. Further, when we pick up and inspect something, we choose what we look at and how we look at it. This is not the case on the Internet. If we were looking at buying a car on the Internet, we would see the pictures the seller had chosen for us to see but not the things we might look for if we were able to see it in person. And, taking into account our other senses, we can’t test the car to hear the sound of the engine as it changes gears or sense the smell and feel of the leather seats. There are many ways in which the Internet does not convey the richness of experiences of the world. This lack of sensory information means that people are often much more comfortable buying via the Internet generic goods – things that they have seen or experienced before and about which there is little ambiguity, rather than unique or complex things.
 * **Returning goods.** Returning goods online can be an area of difficulty. The uncertainties surrounding the initial payment and delivery of goods can be exacerbated in this process. Will the goods get back to their source? Who pays for the return postage? Will the refund be paid? Will I be left with nothing? How long will it take? Contrast this with the offline experience of returning goods to a shop.
 * **Privacy, security, payment, identity, contract.** Many issues arise – privacy of information, security of that information and payment details, whether or not payment details (eg credit card details) will be misused, identity theft, contract, and, whether we have one or not, what laws and legal jurisdiction apply.
 * **Defined services & the unexpected** . E-commerce is an effective means for managing the transaction of known and established services, that is, things that are everyday. It is not suitable for dealing with the new or unexpected. For example, a transport company used to dealing with simple packages being asked if it can transport a hippopotamus, or a customer asking for a book order to be wrapped in blue and white polka dot paper with a bow. Such requests need human intervention to investigate and resolve.
 * **Personal service** . Although some human interaction can be facilitated via the web, e-commerce can not provide the richness of interaction provided by personal service. For most businesses, e-commerce methods provide the equivalent of an information-rich counter attendant rather than a salesperson. This also means that feedback about how people react to product and service offerings also tends to be more granular or perhaps lost using e-commerce approaches. If your only feedback is that people are (or are not) buying your products or services online, this is inadequate for evaluating how to change or improve your e-commerce strategies and/or product and service offerings. Successful business use of e-commerce typically involves strategies for gaining and applying customer feedback. This helps businesses to understand, anticipate and meet changing online customer needs and preferences, which is critical because of the comparatively rapid rate of ongoing Internet-based change.
 * **Size and number of transactions.** E-commerce is most often conducted using credit card facilities for payments, and as a result very small and very large transactions tend not to be conducted online. The size of transactions is also impacted by the economics of transporting physical goods. For example, any benefits or conveniences of buying a box of pens online from a US-based business tend to be eclipsed by the cost of having to pay for them to be delivered to you in Australia. The delivery costs also mean that buying individual items from a range of different overseas businesses is significantly more expensive than buying all of the goods from one overseas business because the goods can be packaged and shipped together.

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e-business discussion

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 * E-Commerce development services

“ E-commerce Solutions that fit your business needs ”

E-commerce is the latest mantra for selling your products/services across the globe. With the availability of online payment gateway, online integration with shipping companies like UPS etc., inventory management, online support, global reach, setting up an ecommerce website is the most convenient and most cost effective way of buying/selling products/services. ||  ||  ||

We provide high quality E-commerce development services to our clients all over India. To achieve this, we excel a team of expert E-commerce developers skilled with modern tools and techniques having expertise in the following: » Auctions » Shopping carts » E-commerce Portals » Yahoo Stores » Amazon Marketplaces » eBay Integration

E-power your Online Business
 * E-commerce Development Services

The focus for an **e-commerce business** will be a website incorporating product information and the ability to purchase or make orders online. At Cresco we use the latest database technology to create e-Commerce solutions for your new or existing business.

At Cresco, an **E-commerce Application Development Company** India we use the latest database technology to create e-Commerce solutions for your new or existing business. ||  ||  ||

If you are starting a new business for selling products, we can set up an online product database for your end users to browse and to purchase. If currently you only sell offline, Cresco can help you to expand on your business by creating online e-commerce website for you.

Cresco **E-commerce specialists** will set up online credit card purchasing facilities, booking request forms, design your database, store front and administration interface, program your website to interact with the database, set up your website with a payment processor and also host your site.

The terms ‘e-commerce’ and ‘e-business’ are often used interchangeably but what do these words really mean?
 * || =E-business versus e-commerce= ||  ||
 * ||  || ==Interchangeable terms?==


 * e-commerce** refers to online transactions - buying and selling of goods and/or services over the Internet.


 * e-business** covers online transactions, but also extends to all Internet based interactions with business partners, suppliers and customers such as: selling direct to consumers, manufacturers and suppliers; monitoring and exchanging information; auctioning surplus inventory; and collaborative product design. These online interactions are aimed at improving or transforming business processes and efficiency.

Potential e-business benefits include: If you are interested in exploring global e-business information further including the latest news, country-assessments, business models and best practice case studies than visit these recommended websites:
 * Improved accuracy, quality and time required for updating and delivering information on products and/or services.
 * Access for customers to catalogues and prices - 24 hours x 7 days.
 * Improved ease, speed and immediacy of customer ordering.
 * Enhanced market, industry or competitor intelligence acquired through information gathering and research activities.
 * New distribution channels via the electronic delivery of some products and services, for example, product design collaboration, publications, software, translation services, banking, etc.
 * Expansion of customer base and growth in export opportunities.
 * Reduces routine administrative tasks (invoices and order records) freeing staff to focus on more strategic activities.
 * Ebusiness forum - www.ebusinessforum.com - The Economists website providing information, analysis, research and latest news on the impacts of the Internet for business strategy.
 * www.line56.com - news, analysis, and research on business-to-business e-commerce. The website includes a global database of e-business companies and players.
 * www.brint.com - a portal for information on e-business, information, technology and knowledge management issues ||  ||   ||