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Ecom 2 - Impact of E-Commerce on business organization
E – Commerce (MCM – 608)
University of Sargodha
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THE IMPACT OF ELECTRONIC COMMERCE ON BUSINESS ORGANIZATION
Rajneesh Shahjee
The said research paper involves a study of the impact of Electronic Commerce on Business. The research study has highlighted the Management Information Systems, Finance and Accounting, Marketing and Computer Sciences of E-Commerce on Business. E-commerce is a way of conducting business over the Internet. Though it is a relatively new concept, it has the potential to alter the traditional form of economic activities. Already it affects such large sectors as communications, finance and retail trade and holds promises in areas such as education, health and government. The largest effects may be associated not with many of the impacts that command the most attention but with less visible, but potentially more pervasive, effects on routine business activities. The integration of Electronic Commerce and Business will bring a renaissance in marketing function. As it present opportunities to get close to the customer to bring the customer inside the company, to explore new product ideas and pretest them against real customers. Keywords: Electronic Commerce, Business Organisation, Management Information Systems, Finance, Accounting, Marketing, Computer Sciences.
Introduction E-commerce has a significant impact on business costs and productivity. E-Commerce has a chance to be widely adopted due to its simple applications. Thus it has a large economic impact. Electronic Commerce provides the capability of buying and selling products and information on the internet and other on-line service. Electronic commerce or e-commerce refers to a wide range of online business activities for products and services. Electronic commerce is transforming the marketplace by changing firms’ business models, by shapingrelations among market actors, and by contributing to changes in market structure. Itis difficult to single out theimpact of electronic commerce. Some businesses addresses three themes associatedwith electronic commerce and the organizational changes it entails: changes in business models,changes in market structure and opportunities for economic growth created by organizational change commerce creates the possibility of new models
Scholarly Research Journal's is licensed Based on a work at srjis
Abstract
for organizing production and transactingbusiness, by offering inters modality and complementarily – not only substitution – in business models. E-Commerce plays an important role in the economic growth and development of nation. It is a purposeful activity includes in planning, controlling, promotion and also distribution of various goods and services. In this research paper will describe how the Business spirit play an important role in nation’s growth. It also pertains to any form of business transaction in which the parties interact electronically rather than by physical exchanges or direct physical contact. 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. 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 some use e- commerce and e-business interchangeably, they are distinct concepts. Ine-commerce, information and communications technology (ICT) is used in inter-business or inter- organizational transactions (transactions between among business organizations) and in business-to-consumer transactions (transactions between business organizations and also individuals). E-commerce is a way of conducting business over the Internet. Though it is a relatively new concept, it has the potential to alter the traditional form of economic activities. Already it affects such large sectors as communications, service, finance, retail trade and holds promises in areas such as education, health, transport and government. The largest effects may be associated not with many of the impacts that command the most attention but with less visible, but potentially more effects on routine business activities-commerce presents opportunities to acceleratebusiness processes, reduce costs, reach new customers and develop new business models andmarkets in the business organization. The general agreement is that electronicmarkets and digitalization of products willimpact material flows. A clear identification ofthe extent and direction of effects, however, hasnot yet been achieved, and the issue remainscontroversial resource productivity is discussed asone of the major potential ecological advantagesof e-commerce. Potential exists, above all, in thefields of demand and supply chain management and mass customization. Potentials to increase resource productivity appear inoutline particularly in the business-to-business(B2B)
business process re-engineering and change management, which impact on the improvement in efficiency and integration of business processes andactivities. Research Methodology For the said present research study is based on the secondary data. Such secondary data is collected from various reference books on E-Commerce, E-Business, Marketing Management, Marketing Research, Mobile Commerce, Internet Marketing, Electronic Advertising, Economics, Commerce, Management, Banking etc. For the said research study the secondary data is also collected from the various National and International Research Books and Journalswhich are related to E-Commerce, Internet, Commerce, Banking, Management and Information Technology. The present research study the data pertaining to the following objectives was collected by the review of the literature on the subject concerned. The literature was thus collected by visiting libraries and various concerned websites. Objectives of the Research Study Many E-Commerce business activities present different objectives. These may be specific and immediately measurable objectives as well as more general and complex. The most commonly cited objectives of the impact of electronic commerce on business are: 1. To study the theoreticalconcept of E-Commerce. 2. To study the E-CommerceModels of Business. 3. To study the impact of E-Commerce on Business. 4. To study the benefits of E-Commerce to Organizations, Consumers and Society. 5. To study the barriers to E-Commerce. Hypothesis of the Research Study Electronic Commerce (EC) is where business transactions take place via telecommunications networks, especially the Internet. Electronic commerce describes the buying and selling of products, services and information via computer networks including the Internet. It is defined as the conduct of a financial transaction by electronic means. The present said research study was carried out with following hypothesis in view:-
- E-Commerce reduces the time between the outlay of capital and the receipt of products and services.
- The use of internet for business marketing the goods and services are increasing day by day.
- The impact of E -Commerce is positivelyaffecting on business marketing.
E-Commerce Models Creating an e-commerce solution mainly involves creating and deploying an e- commerce site first step in the development of an e-commerce site is to identify the e- commerce model on the parties involved in the transaction, e-commerce can be classified into main 4 models arediscuss as follows:
- Business-to-Business (B2B) Model This is said to be the fastest growing sector of e-commerce. The B2B model is predicted to become the largest value sector of the industry within a few years B2B model involves electronic transactions for ordering, purchasing, as well as otheradministrative tasks between houses. It includes trading goods, such as business subscriptions,professional services, manufacturing, and wholesale dealings. Sometimes in the B2B model,business may exist between virtual companies, neither of which may have any physical existence such cases, business is conducted only through the Internet main twoadvantages of the B2B model such as it can efficiently maintain the movement of the supply chain and the manufacturing andprocuring processes, and it can automate corporate processes to deliver the right products and services quickly andcost-effectively.
- Business-to-Consumer (B2C) Model The B2C model involves transactions between business organizations and consumers. It appliesto any business organization that sells its products or services to consumers over the Internet sites displayproduct information in an online catalog and store it in a database. The B2Cmodel also includes services online banking, travel services, and health information B2C model of e-commerce is more prone to the security threats because individualconsumers provide their credit card and personal information n the site of a businessorganization. In addition, the consumer might doubt that his information is secured and usedeffectively by the business organization. This is the main reason why the B2C model is not verywidely accepted. Therefore, it becomes very essential for the business organizations to providesecurity mechanisms that can guarantee a consumer for securing business information.
- Consumer-to-Consumer (C2C) Model The C2C model involves transaction between consumers. Here, a consumer sells directly toanother consumer. Online auction Web sitesthat provide a consumer to advertise and sell their products online to another consumer, it is essential that both the seller and the buyer must register with the auction site. Whilethe seller needs to pay a fixed fee to the online auction house to sell their products, the buyer canbid without paying any fee. The site brings
The Impact of Electronic Commerce on Business E-Commerce and E-Business are not solely the Internet, websites or dot com companies. It is about a new business concept that incorporates all previous business management and economic concepts. As such,E-Business and E-Commerce impact on many areas of business and disciplines of business management studies.
- Management Information Systems – Analysis, design and implementation of e-business systems within an organization; issues of integration of front-end and back-end systems
- Human Resource Management – Issues of on-line recruiting, home working and ‘Intrapreneurs’ works on a project by project basis replacing permanent employees.
- Finance and Accounting –On-line banking; issues of transaction costs; accounting and auditingimplications where ‘intangible’ assets and human capital must be tangibly valued in an increasingly knowledge based economy.
- Economics –The impact of e-commerce on local and global economies; understanding the concepts ofa digital and knowledge-based economy and how this fits into economic theory
- Production and Operations Management –The impact of on-line processing has led to reducedcycletimes. It takes seconds to deliver digitized products and services electronically; similarly the time for processing orders can be reduced by more than 90 per cent from days to minutes. Production systems are integrated with finance marketing and other functional systems as well as with business partners and customers.
- Marketing – Issues of on-line advertising, marketing strategies and consumer behavior and cultures. One of the areas in which it impacts particularly is direct marketing. In the past this was mainly door-to door, home parties and mail order using catalogues or leaflets.
- Computer Sciences – Development of different network and computing technologies and languages to support e-commerce and e-business, for example linking front and back office legacy systems with the ‘web based’ technology.
- Business Law and Ethics – The different legal and ethical issues that havearisen as a result of aglobal ‘virtual’ market issues such as copyrightlaws, privacy of customer information, legality of electronic contractsetc. The Benefits of E-Commerce to Business, Consumers and Society The previous sections have included discussions about what e-commerce is and its impact, but what are the benefits of e-commerce? What does it offer and why do it? The
benefits of e-commerce can be seen to affect threemajor stakeholders: Business Organizations, Consumers and Society.
Benefits of E-Commerce to Business a) International Marketplace - What used to be a single physical marketplacelocated in a geographical area has now become a borderless marketplaceincluding national and international markets? By becoming e-commerceenabled, businesses now have access to people all around the world. Ineffect all e-commerce businesses have become virtual multinationalcorporations. b) Operational Cost Savings - The cost of creating, processing, distributing,storing and retrieving paper-based information has decreased. c) Mass Customization - E-commerce has revolutionized the way consumersbuy goods and services. The processing allows for products andservices to be customized to the customer’s requirements. In the past whenFord first started making motor cars, customers could have any color solong as it was black. Now customers can configure a car according to theirspecifications within minutes on-line via the ford website. d) Lower Telecommunications Cost - The Internet is much cheaper than valueadded networks (VANs) which were based on leasing telephone lines for thesole use of the organization and its authorized partners. It is also cheaper tosend a fax or e-mail via the Internet than direct dialing. e) Digitization of Products and Processes - Particularly in the case of softwareand music/video products, this can be downloaded or e-mailed directly to customers via the Internet in digital or electronic format. f) No more 24-hour-time Constraints - Businesses can be contacted by orcontact customers or suppliers at any time.
Benefits of E-Commerce to Consumers a) 24/7 Access - Enables customers to shop or conduct other transactions 24hours a day, all year round from almost any location. For example - checkingbalances, making payments, obtaining travel and other information. b) More Choices - Customers not only have a whole range of products thatthey can choose from and customize, but also an international selection ofsuppliers. c) Price Comparisons - Customers can ‘shop’ around the world and conductcomparisons either directly by visiting different sites, or by visiting a singlesite where prices are aggregated from a number of providers and compared.
Internet Infrastructure - Deals with issues such as availability and quality of the Internet in terms of speed and reliability. This barrier is of particular concern to Business to Consumer organizations, since their business relies more on general consumers, and so the ease with which the general public can connect to the Internet has a direct impact on their Web-based business.
Security -In its broadest term is one of the most significant barriers toe-commerce both within the organization and external to it. Identified as Security and Encryption; Trust and Risk; User Authentication and Lack of Public Key Infrastructure; Fraud and Risk of Loss it relates to the development of a broader security infrastructure and it also relates to the kinds of measures barriers to e-commerce businesses can take to improve security.
Interoperability of systems– This is identified as one of the major barriers for large US- based Business to Business corporations. This refers specifically to implementation and compatibility problems of integrating new e-commerce applications with existing legacy systems and resources within organizations. This problem also extends to interacting with systems of business partners and stakeholders.
Lack of Qualified Personnel- This is a particularly strong concern because internally they do not have sufficient resources to attract and maintain their own support staff to develop a sophisticated technology infrastructure. With regards to third parties, the qualified personnel tended to work for larger organizations. Conclusion This research paper involves a study of the inability to find the product or services of interest quickly is the biggest barrier to effective marketing this problem may be overcome through E- commerce, where number of companies offer several products thought the net. In Short, Indian e-commerce has to face many difficulties in web marketing because of infrastructural difficulties and computer illiteracy. Majority of the customers live in rural areas do not sufficient knowledge about computer and internet. Some of customers in urban areas do not have credit facilities and therefore online buying and selling of goods is limited to urban class having knowledge of computer internet if Indian marketers take into account essentials of good website they can definitely make success marketing in international markets. References V. Zwass, ‘Structure and macro-level impacts of electronic commerce: from technological infrastructure to electronic marketplaces’, May 200 1. mhhe/business/mis/zwass/ecpaper.html E. Turban, J. Lee, D. King and H. M. Chung, ‘Electronic Commerce: A Managerial Perspective’, Prentice Hall, 1999.
P. Timmers, ‘Electronic Commerce – Strategies and Models for Business-to-Business Trading’, John Wiley & Sons, 2000. Walid Mougayar, ‘E-commerce? E-business? Who E-cares?’, Computer World, 2 November 1998; cybermanagement/cw7.html David Whitley, ‘E-Commerce’, Tata Mcgraw Hill Publication, New Delhi (2004). Business Today Special Millennium Edition, Jan. 7, 2000. J Reddy, ‘Impact of E-Commerce on Marketing’ Indian Journal of Marketing. Vol. - XXXIII No. 5 May 2003. ibm/e-business whatis/ecommerce straight-on/ecommerce_definition.htm
Ecom 2 - Impact of E-Commerce on business organization
Course: E – Commerce (MCM – 608)
University: University of Sargodha
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