e-Business Evolution Paper

e-Business Evolution

BIS 375

e-Business Evolution

With 24 hour access and its worldwide reach, the Internet allows organizations the ability to do business well beyond the brick and mortar standard business model of old. Organizations can now expand well beyond geographic limitations that once prevented or restricted access to worlds and markets far away. Successful organizations are finding new customers, retaining existing customers, streamlining channels, streamlining operations and processes, bringing in new partners for ventures while improving overall productivity. With this paper I will explore electronic business (e-business) as well as contrast and compare differences and limitations of e-commerce and e-business.

The stages of the e-business evolution were many. Technology in the beginning was slow and cumbersome but as technology progressed and advanced, electronic business functions improved. The development of e-business took place over three generations. The first generational development involved all e-business efforts conducted prior to the advent of the Internet. According to Owens (2006), “In the second generation, most businesses progressed in e-commerce to where they could conduct sales transactions electronically” (p. 24, para. 6). Though a marked improvement over the first generation, the second generation of e-business still lacked the integration with other organizational functions needed to progress to the third generation of e-business evolution.

The third and current generation of the e-business evolution integrates all organizational functions with electronic sales information. “E-business includes connections of electronic sales to other parts of an organization that relate internally to finance, fulfillment, staffing, marketing, customer service, etc. and externally to customers, suppliers, and ultimately improved supply chain management” (Owens, 2006, p. 24, para. 7).Significant competitive advantage is the benefit to those organizations that understand how important effective integration of systems and processes are to their organization. Rohm & Sultan (2004) explains, “Internet use has begun to mature. E-business has evolved and is now an integral part of the multi-channel marketing strategy in most corporations” (p. 37, para. 6).

An organization conducting e-commerce is similar to a business operating an e-business but there are stark differences between an e-business and an organization operating an e-commerce website. Although the Internet and related technology is the common denominator for e-business and e-commerce, there are few other similarities. E-commerce is buying and selling of goods and services along with electronic (digital) funds transfers. This type of transaction and interaction with customers is the foundation for e-businesses. E-commerce focuses on the transaction between buyer and seller whereas an e-business puts its energy into integrating the e-commerce portion of the business with the rest of the organizational functions. E-business incorporates all aspects of the organizations culture and processes to achieve total organizational success. Organizations can quickly, effectively, and efficiently integrate and transfer knowledge by tying pertinent business systems directly to customers, suppliers, business partners, and employees through the use of intranets, extranets, and collaborative applications.

Well managed e-businesses can be used to detect opportunities for goods and services. Technological advancements have helped organizations more rapidly respond to market conditions by moving products to market faster, and manage products with shorter life cycles better and more rapidly. Better technology also helps organizations to identify potential new customers and retain existing customers by customizing follow-up communications to specific customers’ needs.

Technological advancements come with risks and limitations. Computer software incompatibility, untested or poorly tested computer systems, untested network operations may cause glitches and malfunctions to occur within the organization. Communication gaps or failures within the supply chain can create serious production and/or delivery backlogs. These issues can have a bullwhip effect making the entire supply chain extremely inefficient and costly to the organization. This situation can have a ripple effect along the supply chain which could make it difficult for retailers to plan advertising if there is no product stocked in their warehouses. Delays in the transfer of knowledge could cause delays in product deliveries which would ultimately create internal as well as external customer dissatisfaction along the entire supply chain.

Trust is a risk factor that impacts both e-commerce and e-business alike. Organizations must provide some level of transparency with regards to transactions and interactions with customers. Concerns of identity theft and privacy matters must be addressed and customers must feel safe and secure when conducting transactions on websites. As stated by Petrovic-Lazarevic&Sohal (2004), “By providing education, not only to other executives but to staff as well, the chief information officer (CIO) has the opportunity to transfer cultural issues to everyday business that is related to computer networks” (p. 169, para. 4). Measures undertaken by organizations to counter attacks of identity theft, and privacy issues are can effectively cultivate the culture of trust customers need to do business online.

E-business is the result of the careful and efficient development of e-commerce from its initial concept. Technological advancement, especially the worldwide web, helped transform what was once a typical electronic store (e-commerce) into an efficient e-business. The integration of the e-commerce transactions and interactions into all organizational functionscreates “higher customer satisfaction, by providing quicker service, less effort to buy a product or service, and less business cost compared to a business run without the use of information technology (IT)” (Petrovic-Lazarevic&Sohal, 2004, p. 167, para. 2). Understanding the limitations, capabilities, and risks of e-commerce and e-business will help the organization achieve a competitive advantage which is every business manager/owner’s ultimate goal.

References

Owens, J. D. (2006, spring). Electronic business: A business model can make the difference.

Management Services, 50(1), 24.

Petrovic-Lazarevic, S., &Sohal, A. S. (2004).Nature of e-business ethical dilemmas.

Information Management & Computer Security, 12(2/3), 167.

Rohm, A. J., & Sultan, F. (2004, January/February).The evolution of e-business. Marketing

Management, 13(1), 32.