School of Information Systems

E-Business and E-Commerce

26 Jul 2023

Background 

E-business or electronic business can be defined as activities that are directly or indirectly related to the process of exchanging goods or services by utilizing the internet as a medium of communication and transactions. E- business is also one of the internet technology applications that penetrate the world of internal business, encroaching on systems, customer education, product development and business development. 

The concept of e-business is motivated by the crisis experienced by IBM and finally replaced its CEO in 1993. The rapid growth of the internet began in the mid-1990s, leading many to see it as a golden opportunity to make the company superior, but many have not been able to take advantage of the situation. 

In another hand, E-Commerce is: Trading ( buying / selling) through electronic networks where computers as a means used to facilitate all operations of the company development of information technology, especially the internet, is a driving factor in the development of e-commerce. The Internet is a global network that brings together computer networks around the world, enabling communication and interaction with each other around the world. Until now, internet is an ideal infrastructure to run e-commerce, so that e-commerce becomes identical in running businesses on the internet. 

E-Commerce is The Buying, selling, transferring or exchanging of products, services or information via computer networks, including the Internet. Broader definition of E-Commerce, E-Business is Buying and selling of goods and services, and servicing customers, collaborating with partners, conducting e-learning and conducting electronic transactions within an organization. 

The connection between E-Business and E-Commerce 

E-commerce (electronic commerce) is the purchase, sale, marketing of goods and services through electronic systems such as internet, television, world wide web, or other computer networks. E-commerce involves electronic fund transfer, electronic data exchange, automated inventory management systems, and automated data collection systems. One of the networks used is the internet. 

There are 8 types of E-Commerce: 

  1. Business – to – consumer (B2C): the sellers are organizations, and the buyers are individuals.
  2. Business – to – business (B2B): both the sellers and buyers are business organizations. B2B represents most of the e-commerce. 
  3. Consumer – to – consumer (C2C): an individual sells products or services to other individuals. 
  4. Business – to – employee (B2E): An organization uses e-commerce internally to provide information and services to its employees. Companies allow employees to manage their benefits, take training classes electronically; buy discounted insurance, travel packages, and event tickets. 
  5. E -Government: the use of Internet Technology in general and e-commerce to deliver information about public services to citizens (called Government-to-citizen [G2C EC]), business partners and suppliers (called government-to-business [G2B EC]), 
  6. Mobile Commerce (M-Commerce): e-commerce that is conducted in a wireless environment. For example, using cell phone to shop over the Internet. 
  7. Social Commerce: delivery of electronic commerce activities and transactions through social computing. 
  8. Conversational commerce (also called chat commerce): refers to electronic commerce using messaging and chat apps to offer a daily choice, often personalized, of a meal, product, or service. 

The Benefits of E-Business and E-Commerce 

E-Commerce 

  1. Customer service is better. 
  2. Relationships with suppliers and the financial community are becoming better. 
  3. Increased returns on shareholder and owner investments. 

The benefits for a company 

  1. Can reach potential buyers in large numbers in a global count, 
  2. The cost of advertising is cheaper than tv, newspaper or radio advertising media with the appearance can be the latest updates at a minimal cost, 
  3. Able to utilize social media for communication with suppliers, factories, dealers and customers online, 
  4. The level of marketing can be re-marketed in accordance with the wishes of the buyer, 
  5. Not subject to sales tax. 

The benefits for consumer 

  1. Electronic commerce allows customers to shop or make other transactions 24 hours a day throughout the year from each location. 
  2. Electronic commerce gives customers more choice; they can choose a variety of products from many vendors. 
  3. Electronic commerce provides ins expensive products and services to customers by visiting many places and doing comparisons quickly. 
  4. In some cases, especially in digitized products, EC makes shipping very fast. 
  5. Customers can receive relevant information in detail in seconds, no longer days or weeks. 
  6. Electronic commerce enables participation in virtual auctions. 
  7. Electronic commerce provides a place for customers to interact with other customers in the electronic community and exchange ideas and experiences. 
  8. Electronic commerce facilitates competition, which will ultimately result in substantial discounts. 

The benefits for the community 

  1. Electronic commerce allows people to work indoors and not much out to shop, as a result of which this will reduce the flow of traffic density on the road as well as reduce air pollution. 
  2. Electronic commerce allows a certain amount of merchandise to be sold at lower prices, so that people who are less able can buy more and improve their standard of living. 
  3. Electronic commerce allows people in third world countries and rural areas to enjoy a variety of products and services that they will find difficult to obtain without EC. This also includes opportunities to study professionally as well as obtain an academic degree. 
  4. Electronic commerce facilitates public services, such as health care, education, and equitable social services implemented by the government at a lower cost, and with better quality. Health care services, for example, can reach patients in rural areas. 

E-Business 

What advantages of E-Business Value are actually offered by e-business. According to Charles R. Rieger and Marry P. Donato there are at least 5 advantages offered by e-business, namely: Efficiency, Effectiveness, Reach, Structure, and Opportunity. 

  • Effiency

A study found that approximately 40% of the company’s total operating costs are for information sharing activities to the relevant divisions. With the use of information technology, it is seen how the company can pay the total operational costs. An example is how email facilities can reduce the cost of sending documents. 

  • Effectiveness 

With the use of information technology, customers can connect with the company at any time, in 7 days a week and 24 hours non stop. 

  • Reach 

The company is able to expand the company’s range and wiggle room for expansion easily (breaking the boundaries of space and time) and without requiring relatively expensive costs. 

  • Structure 

The brick-and-morter concept of transforming into click-and-morter has changed the company’s attitude to business approach. 

  • Opportunity 

Wide opportunities for businesses to innovate to create new products or services due to the discovery of new technologies from time to time. 

The example of E-Business and E-Commerce 

Some examples of e-business today are newspapers or print media that are based online, so not only print media. There are many print media that run their business not only through print media but also through online media on the internet and of course there are many benefits that can be obtained such as: news that can be accessed at any time by the whole community and more updated news etc. Then another example today is a lot of fashion stores that not only run their business in the real world but they also run their business online. 

For more details about e-commerce, the following are some examples of e-commerce that are quite popular: 

  1. Ebay 
  2. Alibaba 
  3. Tokopedia 
  4. Lazada 
  5. Shopee 

Summary / Closing 

The development of e-commerce applications for a company or institution is a fairly complex process. Involve multiple organizations or sites in security handling and authorization. The popularity of e-business at the end of the 20th century and at the beginning of the new millennium was actually supported by three main trigger factors, namely (1) market and economic factors, including intensifying competition, the global economy, regional trade agreements, and growing consumer power, (2) social and environmental factors, such as changes in labor force characteristics, government deregulation, awareness and demands for ethical practicality, awareness and demands for practical ethical , awareness of corporate social responsibility, and political change, and (3) technological factors, including the short life cycle of products and technologies, innovations that appear almost every time, information overload, and reduced ratio of technology cost to performance. 

 

Reference 

ALVY KENNETH MATTHEW NOYA