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The explosion in the use of the Internet has paved the way for several path-breaking innovations. One of the most interesting and exciting aspects of this evolution is the emergence of electronic business (e-business) as a mainstream and viable alternative to more traditional methods of businesses being conducted today. E-business is defined as the process of using electronic technology to do business. It is the day and age of electronic business. Also the structure of the Web is rapidly evolving from a loose collection of Web sites into organized market places. The phenomena of aggregation, portals, large enterprise sites, and business-to-business applications are resulting in centralized, virtual places, through which millions of visitors pass daily.
E-business has become standard operating procedure for the vast majority of companies. Setting up and running an e-business, especially one that processes a large number of transactions, requires technical, marketing and advertising expertise. Consumers like to access to products and services on a 24-by-7 basis, and the easiest way to provide that is to move operations online. The businesses that provide the most reliable, most functional, most user-friendly and fastest services will be the ones that succeed.
E-commerce is the subset of e-business that focuses specifically on commerce. Commerce is the exchange of goods and services for other goods and services or for cash payment. E-commerce is all that a company conducts commerce through electronic technology. Since commerce is clearly a sort of business, all the keys to success for e-business automatically apply for e-commerce also.
E-commerce redefines the very foundations of competitiveness in terms of information content and information delivery mechanisms. Flows of information over international networks have created an electronic market-space of firms that are learning to exploit business opportunities.
A few years ago the only way of buying books is that one has to go to bookstores. Purchasing clothes meant a trip to the malls. Trading of stocks happened through brokers only. Not anymore! Today businesses are coming to our doorstep. A number of companies and large warehouses have successfully managed to put an electronic outlet to traditional businesses.Current Happenings in the E-business World
Industries are moving all of their operations online, as it becomes clear that the Web, not constrained by geographic boundaries, is a more efficient vehicle for their services and allows them to work on a truly global scale. People are currently able to pay their bills, write and cash checks, trade stocks, take out loans, mortgage their homes and manage their assets online. Money as we know it may cease to exist, replaced by more convenient technologies such as smart cards and digital cash. Intelligent programs will take care of the financial and logistical aspects of the interactions between both the individuals and the corporations who populate the Internet. All that a person needs to do shopping is a connection, a computer, and a digital form of payment.
Traditional "brick and mortar" stores are already being replaced by a multitude of electronic store-fronts populating the Web. No single brick-and-mortar store can offer 50,000 products, but an online store has the capability to offer a limitless number of them. There are services for finding the best deal on items for consumers. An increasing amount of consumer information, such as consumers testimonies, product overviews, comparison charts, is being made available, leading to better deals for customers.
In addition to business-to-consumer operations such as electronic stores, business-to-business(B2B) marketplaces and services are also taking their place on the Internet. A business which orders products from a supplier online not only completes the transaction with greater speed and convenience, but also can keep track of the shipment constantly. B2B e-commerce Web sites are also channels that permit operation between different business as well as the outsourcing services that are and will continue to be crucial to the Internet economy.
The transition from brick-and-mortar businesses to "clicks" business is happening in all sectors of the economy. It is now possible for a business to work without an office, because the employees can conduct all communication via phone, voice mail, fax, e-mail and the emerging capabilities of the Internet. There are already Internet services that integrate phone, fax, voice and e-mail, and in the future, new technologies will further facilitate the virtual office.
Many e-businesses can personalize the user's experience, tailoring web pages to their individual preferences, searching using artificial intelligence techniques and letting them bypass irrelevant content. Personalization is making it easier and more pleasant for many people to surf the Internet and find what what they want.
E-business occurs all time as a company uses electronic technology for conducting its business. Thus an e-business can be anything from a sales pitch on a web site to an electronic exchange of data. Many companies have chosen to embrace e-business as they have realized that it is a way to improve efficiency, offer new and innovative services, and increase the quality of their business. The important point to be taken into account here is that e-business carries a fundamentally different way of doing business, instead of being just a new tool to fit into old methods. E-business has a steep learning curve and companies venturing into e-business have to undergo the important exercise of re-evaluating their business first. A proper and successful strategy must be chalked out before embarking into this highly technology-oriented task.The Origin of E-commerce
E-commerce not necessarily mean conducting commerce through the Internet alone, but also mean other forms of electronic communication. Actually, the roots of e-commerce lie not in the Internet, but in other forms of electronic communication. Technologies like Electronic Data Interchange (EDI) and Electronic Funds Transfer (EFT) predate the advent of e-commerce using the Internet and put the foundations for the growth of e-commerce we see today. The point here is that these older and high-powered technologies have been used to connect one business house to one another business. The protocols used for communication between the business houses were point-to-point. But the recent advances accomplished in e-commerce allows for a one-to many or many-to-many approach and thus help to expand greatly any single business to any number of businesses throughout the world. What makes it interesting and exciting is that as the platforms, the medium, the technologies, and the bandwidth change, we will also see a dramatic change in the way in which we approach commerce and the expectations that we have about it.The Role of the Internet in E-commerce
The Internet originated in the form of ARPANET, the original US government sponsored network in 1960s. Thereafter the hardware and the underlying network started to grow and hence the number of users of the Internet grows dramatically. As the bandwidth increases and higher speed network access reaches consumers, the adoption of e-commerce becomes a natural process. As the technology becomes easy to use, accessible and convenient, it is easier for people to jump into the bandwagon of e-commerce. Thus it becomes imperative to make the technologies accessible to people. As the research and development in e-commerce has brought a number of advancements in the quality of hardware and software, the process of reaching out to the people equally make rapid advancement.
The Web allows computer users to locate and view multimedia-based documents (i.e., documents with text, graphics, animations, audios and/or videos) on almost any subject today. The Internet and the Web will surely be listed among the most important and profound creations of human kind. In the past, most computer applications ran on stand-alone computers. Today's applications can be written to communicate among the world's hundreds of millions of computers. The Internet mixes computing and communication technologies. It makes our work easier and allows information instantly and conveniently accessible worldwide. It makes it possible for individuals and small businesses to get worldwide exposure. It is changing the nature of the way business is being done. Researchers can be made instantly aware of the latest technological breakthroughs worldwide.E-business Models
The emergence of e-commerce and its related technologies had lead to the creation of many different robust applications that are typically grouped into several categories of e-commerce.
Business to Consumer (B2C) are applications that provide an interface from businesses directly to their consumers. The most common example of a B2C application is a retail web site featuring the business's products or services that can be directly purchased by the consumer. The importance of B2C varies dramatically from company to company. For some companies, reaching consumers has been the critical aspect of their business. For some companies that run a chain of retail stores, B2C should be one of the most important pieces of their Internet strategy. Even some companies that already have third parties to distribute, market, and sell their products are not much concerned about B2C. Many companies that never have sold directly to consumers, having realized it is clearly much more cost efficient to open a B2C site than to open a physical store, have begun to lean towards B2C. In this case, it becomes necessary for them to address a whole lot of small and big issues. But still B2C applications remains on top of the applications of the Internet as this is directed related to the masses.
Business to Business (B2B) - Forging new relationships between businesses is becoming critical for businesses to survive and blossom in this increasingly fast paced world. B2B applications provide new opportunities for businesses to leverage emerging technologies to build their businesses. Examples of B2B applications include facilitating transactions for goods/services between companies, selling goods/services on the Internet to businesses, and supply chain integration. Another example is online procurement of goods from one company to another. Legacy integration is a huge issue in B2B applications. If existing applications such as EDI or EFT are extended to help the B2B process, then the existing legacy applications can be a big help in moving forward. On the other hand, if two companies want to trade data, but have dramatically different legacy systems, legacy integration can be a challenge to overcome. There are other issues such as security, speed, and flexibility, in B2B applications.
Business to Business to Consumer (B2B2C) is one of the emerging models of e-commerce. B2B2C is basically defined as using B2B to help support and rejuvenate companies attempting B2C. This is due to the fact that B2B has been an overwhelming financial success and B2C has not performed upto the expectations. This model is poised to do well as it capitalizes the success of B2B and the potential demand of B2C. B2B provides a way for B2C companies to reduce costs and improve their B2C services. An example of B2B2C is developing products to help B2C companies increase profit by integrating inventory from the manufacturer to the distributor. An application that links one online catalog to another would be considered a B2B2C application as it capitalizes on both B2B and B2C.
Consumer to Consumer (C2C) - C2C is an interesting relatively new piece of the e-commerce world. C2C applications involve consumers conducting commerce directly with other consumers. This obviously means that the company facilitating the transaction must find some non-traditional revenge stream. This could be a small cut of the transaction, a service fee, advertising, or some combination of these. E-bay is an excellent example of a C2C application that is extremely popular with consumers.
Customer to Business to Consumer (C2B2C) involves consumers conducting transactions with other consumers using a business as an intermediary. www.autotrader.com is the best example for this sort of application. This site facilitates the transactions of selling used cars between consumers, but also contains an inventory of used cars to sell to the consumer.
Apart from above categorized e-commerce applications, there are several specific models of businesses operating on the Web. Here comes a brief of each model.
Auction Model - The Web offers many different kinds of auction sites.Auction sites act as forums through which Internet users can log-on and assume the role of either bidder or seller. As a seller, one can post an item to sell, the minimum price he requires to sell his item and a deadline to close the auction. As a bidder, one can search the site for availability of the item he is seeking, view the current bidding activity and place a bid. Also there are sites designed to search existing auction sites in order to pinpoint the lowest prices on an available item. Although auction sites usually require a commission on sales, these sites are only a forum for online buying and selling. They get the commission from both parties once the deal is over.
Portal Model - Portal sites give visitors the chance to find almost everything they are looking for in one place. They often offer news, sports, and weather, as well as the ability to search the Web. Portals are subdivided into two kinds: horizontal portals and vertical portals. Horizontal portals aggregate information on a broad range of topics. Vertical portals are more specific, offering a great deal of information pertaining to a single area of interest. Online shopping is a popular addition to the major portals. Portals linking consumers to online merchants, online shopping malls and auction sites provide several advantages.
Dynamic Pricing Models - The Web has changed the way business is done and the way products are priced. There are companies which enable customers to name their prices for travel, homes, automobiles and consumer goods. Buying in bulk has always driven prices down and there are now Web sites that allow one to lower the price by joining with other buyers to purchase products in large quantities to get price reduction. There are a number of variety of models here. They are Name-Your-Price Model, Comparison pricing model, Demand-sensitive pricing model, and Bartering model. E-business allows companies to follow a variety of ways to keep prices down on the Internet, such as rebates and offering free products and services.
Online Trading and Lending Models - Another fast-growing area of e-commerce is online securities trading. Many brokerage houses have established a presence on the Web. Trading sites allow one to research securities, buy, and sell and manage all of his investments from his desktop. Online trading often costs less than conventional brokerage.
The Web offers a quite number of exciting services including getting a loan online, recruitment through the Web, online News services, online travel services, online entertainment, online automotive sites, energy online, selling brain-power, online art dealers, e-learning and e-banking.Benefits of E-commerce
There are many benefits of bringing one's business to the Web. An e-business can offer personalized service, high-quality customer service and improved supply chain management. E-commerce in a way is equivalent to automation and innovation of commercial activities. It is absolutely clear that automation brings a number of distinct advantages including lesser investment. Automation frees valuable labor from menial tasks and also encourages the people concerned to pursue new and ideally beneficial initiatives, which would not have happened previously. We discuss the benefits of each model explained above.
B2C applications are beneficial to existing retail stores and companies as this innovative application allows them to increase their customer base and hence their revenue. E-commerce helps them to reach entire demographics that they might not be able to reach in a physical or "bricks and mortar" store. B2C is highly beneficial for consumers as it gives them access to a world of stores instead of the stores in their neighborhood. It brings a competitive trend giving consumers access to a wide variety of choices and lower prices. Some B2C web sites allow consumers to name their own prices for a variety of goods and services. Thus e-commerce brings forth such kinds of beneficial, consumers-oriented innovations.
B2C allows companies to extend their existing services to consumers as well. Consumers are able to order a special item to be delivered to a nearby store for pickup is a handy service that increases customer loyalty and this is possible only due to the advent of B2C. B2C applications open up a new world for companies that are not well known to outside world before.
B2B is extremely beneficial to businesses because of its potential to drastically reduce the cost. By making communication easier and faster, using new technologies and standards, the quicker the inventory can move, the more efficient the process. Further on, B2B applications help automate communication between companies. This, apart from streamlining the process, helps reduce the potential for errors and helps provide better goods and services.
B2B2C applications help B2C companies to raise profits. By leveraging the benefits of B2B to streamline and improve business, B2C companies have the ability to make more money by growing revenue and cutting unnecessary costs. Also a company which is successful in one area of e-commerce can capitalize on this success and knowledge gathered to other areas of their e-commerce plan.
C2C and C2B2C applications allow consumers to interact themselves. This helps businesses to have a fairly easy revenue stream and consumers have access to an entirely new way to purchase and sell goods and services.Technologies for E-commerce
There are specific e-commerce solutions and tools being developed and marketed. One such innovative product is called application server. There are two types of application servers: the first type is not based on Java 2 Enterprise Edition (J2EE) specification and other one is J2EE-compliant. There are many companies developing Java-based application servers such as IBM's WebSphere, Borland's Inprise Application Server, BEA WebLogic etc.Thus technologies and tools are being constantly brought out to facilitate companies and consumers to embrace the exciting and thrilling world of e-commerce and e-business. Finally the network elements (wireless, cable, and satellite networks, and Web-based telephony); and other transmission network services (the Internet and virtual private VANs) are necessary components.The Issues of E-commerce
The unprecedented information-transfer capabilities, unregulated nature, and break-neck growth of the Internet have fostered rampant copyright infringement and piracy of intellectual property. Innovative new technologies such as MP3 have been used in an illicit manner to transfer music over the Internet. Electronic piracy of books and printed material is also common nowadays. The demand for the security of intellectual property is helping drive the development of new technologies, such as digital signatures, digital certificates and digital steganography. The other major issue is privacy invasion. What if the e-business to whom we give our personal data sells or gives that data to another organization without our knowledge?. Some unauthorized party can gain access to our private data, such as our credit card numbers?.
Other critical components include intellectual services, systems integration, and consulting. Moreover, the industry requires mechanisms for managing the Internet and dealing with overriding public policy concerns such as universal access, privacy, encryption, and information pricing. Finally, there are also issues of technical standards and compatibility across networks.The Future of E-commerce
Today's users want multimedia and e-commerce in a package that is both powerful and user-friendly. Programmers want all these benefits in a truly portable manner so that applications will run without modification on a variety of platforms. E-commerce will go deeper through displacing traditional processes in manufacturing, go wider by encompassing products and services provided by different enterprises, and go higher by acquiring requirements intelligently and interactively so that enterprises can deliver customized products. The technologies for these developments including service composition and virtual markets are taking shape steadily. When business inter-operation has achieved a kind of equilibrium, the technologies will surely expand.