What is E-Business ?
Electronic business is popularly known as 'e-business' or 'eBusiness'. When communication and information technologies are used to support the various business activities then it is known as e business.
E-commerce is only considered to be a subset of the overall e-business strategy in which greater emphasis is given to the strategic focus on the implementation of business functions using electronic capabilities.
Definition of E-Business
According to ICT :
"E-business (Electronic Business) includes any process that a business organisation conducts, business over a computer mediated network".
In e-business, the main processes associated with the business are transformed with the help of internet technologies.
The process of e-business spans the entire value chain which involves cooperating with business partners, processing orders electronically, electronic purchasing, handling customer service and supply chain management. With the help of special technical standards, companies are able to exchange data with each other. It is possible to integrate inter and intra firm business processes using the various e-business software solutions. The internet, extra-nets, web, intranets and their combination facilitate e-business.
E-business consists of e-commerce, e-marketing and e-operations :
1) E-Business :
All the aspects of business processes are streamlined by applying Internet technology.
2) E-Marketing :
Online presence of the company can be built and it can be showcased by providing detailed information. Most of the small businesses are carrying out e-marketing these days.
3) E-Commerce :
It includes supporting customer inquiries automatically, conducting payment, online selling of services and products and handling transaction details.
4) E-Operations :
The business efficiencies within the functional departments of a company are streamlined using various steps. The supply chain between the key suppliers and the company is also streamlined.
E-Business = E-Marketing + E-Commerce + E-Operations
Processes of E-Business
The processes of an e-business can be broadly categorized in three categories:
1) Production :
This category includes processes like business procurement, ordering and replacement of stocks from suppliers, payment processing, transactions with suppliers and processes related to production control etc.
2) Customer Relation :
This category of business processes consists of product marketing and promotion, online product sale, customer order processing, payments from customers, customer support service, after sale service etc.
3) Internal Management :
This category business processes normally consists of of employee's management, employee recruitment, training, and information transmission within the organisation among various departments likes production and sales to improve productivity of the departments.
E-commerce and e-business substitute each other frequently.
Features of E-Business
The E business features explain below :
1) Ubiquity :
E-business is widespread, that is, it is available everywhere always. It sets free market from being restricted to a physical space and makes it possible to shop from computer (such as desktop, laptop). The result is called a market. space.
For consumers, ubiquity cuts transaction costs for exploring products in a market. Consumers. can acquire any information whenever and wherever they want, regardless of their location. It is no longer necessary that buyer spend time and money for traveling to a market. In all, it saves the cognitive energy needed to transact in a market space.
2) Global Reach :
Electronic business technologies enable a business to easily reach across geographic boundaries around the earth far more conveniently and effectively as compared to traditional commerce. Globally, companies are acquiring greater profits and business results by expanding their business with e-business solutions. As a result, the potential market size for e-commerce merchants is approximately equal to size of online population.
3) Universal Standards :
Universal Standards are standards shared by all the nations around world. These are technical standards of Internet for conducting e-business. It gives all the ability to connect at the same "level" and it provides network externalities that will benefit everyone. Universal technical standards lower entry costs and minimal search costs.
4) Interactivity :
E- business technologies permits two-way communication between customer and sellers which makes it interactive. It proves as significant feature of e-business technology over the commercial traditional technologies of the 20th century.
5) Information Density :
Information density means total amount and quality of information available over Internet to all market buyers and sellers. Internet vastly increases information density. Information density offers better quality information to consumer and merchants. E commerce technologies increase accuracy and timeliness of information.
For example, flipkart.com store has variety of products with prices.
6) Richness :
Richness refers to the complexity and content of a message. Richness means all commercial activity and experience, conducted through a variety of messages.
For example, text, pictures, videos, sound, links, SMS (Short Message Services) etc.
7) Personalization :
E-business technology offers, personalization. Personalization means designing marketing messages according to particular individuals by customizing it as per customer personal details like name, interests and past purchases record. Products or services can be modified or altered according to the user's choice or past buying record.
Types of E-Business Models
A set of business entities and the relationship that exists between them is described by a business model. It is also possible to identify the participants. of the business and describe the sources from where the revenue will come by using business model. With the help of the business model, it is possible to identify suitable solutions on a broad perspective at a certain abstraction level. The solution that has been identified must generate sustainable revenue and the stated objectives should be realizable with it.
The fundamental components of a business that can be carried-out completely or partially over the internet are represented using the e-business models. E-business is a method by which one can redirect his/her business into the digital world to generate more revenue. E-business model is an approach to directing business electronically through which a company can generate profitable revenue.
There are several types of e-commerce business models which are classified based on the nature of interaction with players. Some of them are as below:
Consumer-to-Consumer (C2C) Models
Consumer-to-Consumer (C2C) e-business is a business model that facilitates the transactions of product and services between two consumers. In this e business model, consumers sell product and services directly to other consumers using Internet and Web technologies. An individual customer uses classified advertisements to advertise or promote different products and services on web or through online auction sites.
For example, eBay.com, quickr.com, craigslist.org, gittigidiyor.com. It entails lower cost for both buyer and seller customers. Using this e business model, customers can also advertise and sell their products and services to other employees over organizational Intranet.
Figure illustrates general C2C e-business model. In this figure, Internet service provider (ISP) is an organisation that provides services to user that participating in the Internet. Escrow is an electronic middleman under which money is held in trust by a trusted third party until certain agreed conditions are met.
Consumer-to-Business (C2B) Models
Consumer-to-Business (C2B) is an e-business model where consumers (individuals) sell products and services which are consumed by businesses and organizations. This model opposite to B2C model.
In this model, price and value for specific products and services are created by individuals. For example, when a customer writes reviews for new product or gives a useful idea for new product development then he/she is creating value for the company if the company adopts the review or idea. Company can facilitate C2B model by setting discussions forums on their websites.
For example, the websites such www.mobshop.com, www.pazaryerim.com and www.priceline.com are organizers of C2B transactions.
Figure illustrates the C2B e-business model.
Business-to-Consumer (B2C) Models
In B2C model of e-business, businesses sell products and services to individual consumers directly. All the products and services are offered online through electronic channels in e-business which supplements: the traditional commerce. Internet acts as an electronic channel.
For example, www.infibeam.com, www.homeshop18.com, www.flipkart.com, www.amazon.in are websites that comes under this category. Through these websites individual can purchase clothes, mobiles and electronic products etc.
Some of advantages of B2C business model are as follows:
- Provides better way to deal with suppliers
- Provides customer service centres that are physically located
- Provides opportunity to return purchase item
- Eliminates middlemen
Figure illustrates the B2C e-business model.
Business-to-Business (B2B) Models
Business-to-Business (B2B) e-business model describes electronic transactions between businesses such as between manufacturer and wholesaler.
The major factors in increasing the acceptance of B2B e-business are Internet and dependence of many business operations upon other businesses for supplying raw materials, utilities and services. It is very fast developing segment in e-business. Company can check and updates purchase orders, invoices, inventory and shipping status directly through the Internet.
The advantages of B2B e business model are as follows :
- Reduces cycle time of inventory and costs
- Enables business partners to share relevant information timely with accuracy.
- Improves supply-chain management among business partners.
- Eliminates manual activities and hence reduces errors.
Figure illustrates the B2B e-business model.
Applications of E-Business
The application/services of e-business can be seen in various industries and sectors. Some services are as below :
1) Electronic Ranking :
Electronic banking is abbreviated as E-banking. The other names of electronic banking are cyber banking, virtual banking, home banking, online banking and Internet banking.
E-banking is the electronic payment system that enables customers to conduct the transactions on a website operated by institution.
For example (E business example) , State bank of India (SBI) provides opportunity to their customer (account holders) to access their bank accounts as well as core services such as balance inquiry, funds transfer etc. SBI also provides premium services including financial calculators and insurance etc.
E-banking includes various banking activities conducted at anytime from anywhere around the world and do not need physical presence. E banking services are provided to customers through Internet and web. Customer can use e banking services if he/she has Internet connection and web browser software (Internet Explorer, Google Chrome, and Mozilla Firefox). The main advantages of e-banking are that it saves time and money :
- For banks, it provides inexpensive alternative to branch banking. It provides a choice to offer services to their customers from remote places around geographical boundaries.
- For customers, it provides secure money transfer over Internet. Customers can view their account details and funds transfer history. Customers can also pay bills and order cheques over web.
2) Electronic Trading :
Electronic trading is abbreviated as E-trading. E-trading is the method of buying and selling shares and financial assets through Internet in stock market.
E- Trading uses internet which provides a common virtual platform to buyers and sellers.
For example, in stock exchange industry, e trading is defined as purchase and sale of financial securities though internet. Some common advantages of e-trading are as follows :
- No need of Middlemen (broker).
- Offers real-time stock prices throughout the world.
- Provides information about market, historical data and graph that are easily understandable.
- Provides the facility to check Demat account balance, trading history and bank account. balance anytime.
3) Electronic Learning :
Electronic learning is abbreviated as E-Learning. It is the method of learning conducted via electronic media on the Internet. The Internet plays major role in learning and teaching process.
A large number of e-learning websites are available over the internet.
For example, www.24x7 learning.com, www.meritnation.com etc.
In e-learning, teaching materials and instructions are delivered by tutors to students over Internet. The main advantages of e-leaning are as follows:
- It provides flexibility to students.
- Learning materials can be accessed at anytime and anywhere.
- It is cost effective.
4) Electronic Recruitment :
Electronic recruitment is abbreviated as E- Recruitment. It is the process of personnel recruitment using Internet. The major tasks of e-recruitment are finding, attracting, evaluating, interviewing and hiring new personnel.
Now a day the job market is one of the biggest markets in the world. Here employees seek for excellent jobs and employers search for efficient employees with extraordinary skills. The Internet and web provides platform to job seekers and companies seeking employees. Companies do much of their recruitment process online to improve the speed.
For example, www.naukri.com, www.monsterindia.com, www.timesjobs.com are e-recruitment websites.
5) Electronic Publishing :
It is also known as online publishing. It is electronic version of newspapers, magazines, news, books, music and other digitized information available online on the Internet.
The material of online publishing are available either free or takes subscription free.
For example, newspapers like "The Wall Street Journal" and "The Chronicle of Higher Education charge subscription fees from its consumers. Online publishing becomes common to distribute books, newspaper and magazine to customers over Internet.
For example, www.indianexpress.com., www.jagran.com, www.livehindustan.com, www.thehindu.com is some common newspaper website available in India.
6) Electronic Healthcare :
Many health services are provided online through medical websites on internet. These websites make available information about health related queries, medicine, diseases cure and treatments. On several websites users can also chat online with doctors or specialist as per availability.
E-healthcare information are managed and through Information and Communications Technology (I.C.T.). The advantages of e-healthcare are as follows:
- Lowers costs
- Improvement of quality of patient care
- Provides better planning and decision-making
7) Electronic Retailing :
It is also known as e tailing. E-tailing is related to retail business on the web. E-tailing is the sale of retail goods and services from individuals or businesses to the end-user on Internet.
Through e-tailing, customer can purchase any goods online. He/she has to only visit website (virtual shop) with the help of web browsers and selects online catalog (list of products) and gets the delivery of product at home.
8) Electronic Auctions :
Electronic auctions are abbreviated as E-Auctions. E-auction works similar to offline auctions, the only difference is that it is done over Internet. Websites (Host sites) that provides electronic auctions over Internet acts like a broker. Auctions generally begin with an opening bid of lowest price. Internet users access the websites which host an auction and place a bid for the product in a given time deadlines. Before placing a bid, bidder reads the product and auction description and then start bidding by sending an e mail. E-auction provides opportunities to both individual sellers and companies to sell their goods online successfully.
For example, www.ebay.com, www.ubid.com, www.onsale.com, www.auctionweb.com, www.auctionindia.com, www.bidfind.com is some common websites that provides electronic auctions.
9) Online Insurance :
General and life insurances are now offered online through Internet by all financial institutions and many companies. The customers may buy insurance contracts online from insurance and risk management companies and are also llowed to pay their premiums online using e payment method.
For example, www.licindia.in, www.hdfcinsurance.com is websites that provides insurance facilities to their customers.
10) Electronic Searching :
Electronic searching means to locate and identify relevant research materials using the computer and Internet as a tools. Internet and e-commerce play important role in information searching for individuals and companies. It saves the time and energy of user because it provides searching and fetching facilities with quick response about relevant topic.
Web consists of large amount of information in digital form. Web contains the personal, business and general information pages covering almost all the topics.
For example, websites such as www.yahoo.com, www.ask.com and www.google.co.in are search engines. Search engine is software system designed to search for information on Web.Search engine provide more optimized searching using keyword, concepts of subject matters in easy manner and display more search results.