Chapter 8: Electronic business and electronic commerce
Summary

This chapter introduced the term electronic business or eBusiness, to encompass
the entire range of ICT application in businesses, both to improve internal
operations and to extend systems into the environment. Electronic commerce
(eCommerce) is the term used for the use of ICT in the external activities and
relationships of the business with individuals, groups and other businesses.

Different forms of eBusiness can be identified, related to the features of the value
network discussed in Chapter 7. There are also three major forms of eCommerce:
B2C, B2B and C2C.

B2C eCommerce concerns the attempt to support the organisation’s customer
chain with ICT, and involves the ICT-enablement of key processes in the customer
chain: pre-sale, sale-execution, sale-settlement and after-sale. It moves through a
number of distinct stages of increasing complexity. A company is likely to first use
the Internet for information-seeking and communication, then establish a
marketing presence on the Internet, and subsequently put an online catalogue of
its products and/or services on a website. Online ordering and online payment are
two additional levels of functionality likely to be provided on a company B2C site.
At the highest level of sophistication forms of customer relationship management
enable a company to better track its interactions with its customers.

B2B eCommerce represents the attempt by organisations to use ICT to improve
elements of their supply chains. A typical supply chain includes activities such as
search, negotiate, order, delivery, invoice, payment and after-sale. B2B
eCommerce systems are likely to be built on bedrock of sound back-end
information systems infrastructure. Supply chain management has arisen as a
distinct philosophy which helps frame the objective of B2B eCommerce.

C2C eCommerce is the ICT enablement of the community chain, or social
networks surrounding the organisation. Public sector initiatives have been
interested in enhancing traditional communities with increased ICT use. Private
sector initiatives have been particularly interested in the community chain as a
new revenue source or as a means of adding value to traditional commercial
activities.

EMarketing is the use of electronic channels for delivery of promotional material.
Traditional marketing channels are characterised as push, passive, linear, eventdriven, one-to-many, and information-weak. In contrast, electronic marketing
channels are characterised as pull, aggressive, interactive, time-independent, oneto-many and many-to-many, and information-strong. Techniques for Web-based
eMarketing include banner advertisements on websites and email to contact
potential customers. Revenue is achieved through schemes such as fl at fee, CPM,
CPA or click-through.

The pre-sale activities of search, negotiate and order in the supply chain are
given the umbrella term procurement, which sometimes also refers to all the
activities involved in the supply chain. Electronic procurement (eProcurement) is
the use of ICT to enable the whole of the procurement process. Significant
performance improvement is possible through forms of eProcurement such as
eSourcing, ePurchasing and ePayment.

Whereas recent interest has been directed at the ways in which networks of
consumers generate value, there has also been interest in the ways in which
networks of businesses can use ICT to collaborate as well as compete. Internally,
organisations are beginning to manage collaboration across internal units and
divisions globally. Externally, digital ecosystems of businesses are emerging. This
is known as P2P eBusiness.

At a number of points this chapter touched on the benefits of eBusiness and
eCommerce. Chapter 9 looks at benefit or worth in more detail. It considers the
related issues of the use of information systems in organisations and the impact
they have. It also considers approaches to evaluating this impact.