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E-business (electronic business) can simply be described as a wider concept that embraces all aspects of the use of information technology in business. It doesn't just deal with buying and selling it also deals with the servicing customers and collaborating with business partners and with organisation. An example of is Amazon, they deal with the selling of books and music cd's online. They act as the middlemen in between the publishers and the consumers. E-business is any business process that is empowered by an information system. E-business can be divided into three parts namely business to consumer, business to business and business to employee. Today, this is mostly done with Web-based technologies. Electronic business methods enables companies to link their internal and external processes more efficiently and flexibly, work more closely with suppliers and partners to better satisfy the needs and expectations of their customers. In practice, this involves the introduction of new revenue streams through the use of electronic commerce, the enhancement of relationships between clients and partners and improving efficiency from using knowledge management systems. E-business can be conducted over the public Internet, through internal intranets and over secure private extranets.
E-business covers business processes along the whole value chain: electronic purchasing ("e-procurement") and supply chain management, processing orders electronically, customer service and cooperation with business partners. This applies to traditional and virtual organisations. Special technical standards for e-business facilitate the exchange of data between companies. E-business software solutions allow the integration of intra and inter firm business processes.
Applications can be divided into three categories:
A) Internal business systems:
Customer relationship management
- Internal transaction processing
- Human resources management
- Process control
- Employee information portals
- Workflow management
- Enterprise resource planning
- Knowledge management
- Document management systems
B) Enterprise communication and collaboration
Content management system
- Voice mail
- Discussion forums
- Chat systems
- Data conferencing
- Collaborative work systems
C) Electronic commerce- Business-to-business electronic commerce or business-to-consumer electronic commerce
- Electronic funds transfer
- Supply chain management
- Online transaction processing
- Scope of e-business applications
- These applications can be available to different kinds of users:
- All users of the internet
- Only the employees on the intranet
- A specified targeted group of users of an extranet (like customers, partners etc.)
E-business offers the opportunity to rethink a whole range of assumptions about how businesses operate, how they relate to their customers and supplies, and their roles and position in the wider market place.
The drivers for e-business can be divided into the follows: Opportunities and Threats.
E-business gives the opportunity to choose a business model. Some organisations such as prudential assurance with Egg and Co-operative Bank with smile have launched different internet businesses, and have taken the opportunity to establish a new brand which might be more representative of their business vision for the future of their business, that an old long-standing brands.
E-commerce also gives the opportunity to define the relationship with customers. I.e. routine service transactions are under the customer's control. The customer is encouraged to learn the script for example the process associated with placing an order. This learning increases the barriers to switching.
Customer knowledge: This embeds the collection of data which give the organisation an upper hand over rivals for example my bank. My bank knows my by name and address which can help stop crime.
Cost saving on transactions can be considerable because the customer takes responsibility for a large element of the service transaction.
Access to global markets: This takes place mostly in niche markets; access to such global markets has provided welcome opportunities for small businesses and entering the global market is challenging.
- Barrier of entry are minimal. It takes short period of time to implement web presence and thereby to launch a new business.
- Size doesn't matter and indeed small and medium sized companies may be more flexible and adaptable.
- Increase customer expectation about choice, especially in relation to wide product range, the opportunity to undertake comparison shopping, and 24-hour availability.
- Pressure on product margins. Markets that have pressure on product margins, additional pressure will arise from an additional channel of delivery.
Virtual organisations (VO)
This is a temporary network of independent companies- supplies, customers, even rivals- linked by information technology to share skills, costs, assets, ideas to create, distribute product and services with out being limited by traditional boundaries or locations and gaining access to one another's markets. Virtual organisation has many locations and need to communicate between those locations, to share information and work collaboratively on that shared information to produce joint products and services, with the use of information systems. From my point of view virtual organisation can be described as
A virtual organisation is an opportunity-pulled and opportunity defined integration of core competencies of different partners which is based on information systems.
- In a virtual organisation a single project can run across different partners on basis of computer support.
- In a virtual organisation experts can be accessed through the computer network.
- In a virtual organisation participants interact with each other as team members within computer supported collaborative work.
- In a virtual organisation, companies must be connected electronically so that people within an organisation can inter-operate and intra-operate across the electronic business environment, using common tools to navigate around the e-business environment and share information.
Virtual organisation will have neither central office nor an organisation chart. This type of organisation will have no hierarchy and no vertical integration. The purpose of such an organisation is to or alliance is to command speed and flexible in order to:
Break down market barriers to new products by rallying the required skills and expertise from groups, individuals, and even rivals from outside organisational boundaries.
Gain access into new markets and technologies.
For this type of organisation to exist they must have the following:
- Adaptability, flexibility and responsiveness to change requirements and conditions.
- Empowerment of staff.
- Low level of bureaucracy.
- High infusion of IT to support business processes and knowledge workers.
- Stewardship of expertise, know-how and knowledge.
- Dispersion of components parts.
The success factors for such organisations are:
- Shared risks.
- Mutual benefits.
- A shared vision.
The goals of a virtual organisation are:
- Excellence: each partner brings its core competence.
- Utilization: resources of partners are utilized more profitably.
- Opportunism: market opportunity can be met better together than by each individual company.
Any of these factors can change the opportunism that led to the formation of a virtual organisation may lead to its demise. The bad thing about this organisation is that when they is a conflict, misunderstandings or unforeseen event the organisation has few established procedures to deal with the negotiation and conflict resolution. In a virtual organisation a key component to have is a virtual team. A virtual team is an evolutionary form of network organisation enabled by advances in information and communication technology. The opportunistic nature of such alliances suggests that they will generally be short term and exist only until after their objective has been achieved. The five main attributes of a virtual organisation are alliance for a common goal, underlying information and communication technologies, vertical integration, globalization, and collaboration. The member companies may then disband and proceed to create new partnerships. In reality the permanence of alliances and the way in which virtual organisations mutate will depend on the interdependencies between the member the members, and the extent to which original objectives evolves into new shared objectives.
Organisations are driven to become VO due to different situation:
- Needs for process innovation - companies are often motivated by competitive pressures, supply, demands and other factors to achieve increased productivity and quality.
- Sharing of core competencies- VO (virtual organisation) help address the voids in an organisation for example the starting up, turn over and retirements.
- Mobile workers- VO (virtual organisation) concepts can help the numerous companies employing mobile staff such as auditors, consultant and technicians.
- Cost reduction- improving efficiency often means reducing overhead, such as redistributing cost over several partners' locations.
- Changes in employee values and attitudes toward work- quality of life are a major factor in keeping and employing staff.
- Costs and problems of traveling- VOs (virtual organisation) address transportation issues, such as unpredicted commuting time, traffic hassles, the cost of fuel and environmental impact of commuting.
For an organisation to be able to implement VOs (virtual organisation) it will include:
- Telecommuting - the partner's employees work at a location away from the usual workplace such as at home or mobile locations.
- Tele-centres - these satellite offices typically are located in communities outside of local area but provide space, equipments for employees commonly not available in telecommuting.
- Mobile working - this refers to the working environment of mobile workers who are required to use technology such as mobile phones, e-mail wireless devices, pagers and laptops.
- Hot desking - is when employees of an organisation temporary physical occupy a work station or surface in the organisation or a partner's organisation.
- Hoteling - employees of this organisation don't have traditional office space in a building but instead work from home or the road and reserve conference rooms or offices at a building, usually the company's headquarters, when they need to meet with clients, colleagues, or their departments.
- Virtual team - is a group of employees that work in a Geographically Dispersed Team (GDT), space, and organisational boundaries with links strengthened by webs of communication technology i.e. e-mail, groupware or video conferencing.
In E-business technology is any thing that facilitates and constrains the development of e-business.
Most of the excitement around e-business is integrally associated with the potential of the internet, and more specifically the web. Whiles these technologies are important let us not forget that in e-business, especially in business-to-consumer applications, is concerned with allowing customers access through whichever channel they choose for example mobile phones, personal digital assistants (PDA) with WAP display or public access kiosks i.e. in airports, railway stations, and shopping centres. So in other words customer will want to be able to access information in the move, as well as through fixed machines at home or at work. The only problems with this is that the products been viewed can not be touched, smelt, or seen like in a traditional shop. An advantage of these e-businesses is that a customer can go to a virtual mall and collect information on a product, compare prices with similar products and also check details of the product.
The main technologies that I will be talking about will be:
- The internet.
- The World Wide Web.
- Intranet and Extranets.
The term internet and World Wide Web are often used interchangeably. These two are not the same thing. The internet is a collection of interlinked computer networks or a network of networks while the World Wide Web comprises of those servers linked to the internet that use HTTP. The defining characteristic of the web is that websites or documents are linked to one another through hyperlinks which are embedded in the website. Users move from one site to another with the help of hyperlinks.
Another concept that is often encountered in the internet world is that of the intranet. An intranet is an organisations internal communication system that uses internet technology. Intranet is a web browser and graphical user interface. While the internet offers access to its contents for almost any member of the public, intranet have strict access controls in form of passwords and firewalls. These security devices protect company web pages, document databases and other information from external access. These are useful for large companies operating from several places.
Extranet is an extended intranet that gives access to users beyond the organisation such as customers, suppliers, collaborators and some times competitors. Extranet also have security devices that protect information from other internet users and define the level of access for approved users.
The internet connects millions of computers and the rate of increase in use and the new subscriber are the growth day by day all over the world. This is why a lot of companies are very excited and invest a lot of money in the e-business area of there company. For companies the internet is the gateway to a huge market it's just a matter of finding your niche. An example of a very success internet company that we all know is Amazon. Most companies find it important to have a presence online in form of a website, since the internet is becoming a cheaper way of promotion and visibility.
For customer the internet is a gateway to information, commercial and government websites, software and document archives, and e-mail. The internet offers for both the customer and companies a rich seam of information and commercial transactions and commerce.
Relationship between E-business, Virtual Organisation, and Technology.
The relationship between e-business, virtual organisation and technology are that virtual organisation needs e-business and technology. In virtual organisation technology is important because virtual organisation needs these technologies such as the internet to form and re-form alliances and to create blurred boundaries of the organisation, break down barriers to entry and gain access to new markets. It also needs technology for security issues, compatibilities and interoperability, payment mechanism and mobile network channel capacity.
It needs e-business because e-business embraces all aspects of information technology in business i.e. security issues related with data security and payment mechanisms, reducing costs, improved customer service and increased competitive edge. This includes buying and selling, collaborating with business partners and the integration across business processes and communication within the organisation. Technology has also helped the virtual organisation advance information and communications technologies. It has also have in flexibility, improved security, low costs, and improved resource utilization. Technology has helped communication to allow members separated by time and space and often culture, geography, history and future to engage in collaborative work.
E-business technology is important because e-business needs technology to be able to embrace information technology for example without the internet e-business will not be able to care out tasks like buying and selling online, communicating with customers, companies being able to promote and be visible online. So without technology they will be no e-business. Virtual organisation can be related to e-business only if a company is involved in a temporary network of independent companies linked by information technology to share skills, costs and access to one another's markets or to produce a product or service.
Virtual Organisations and e-business are related to technology or work hand to hand because without them the relevant technologies would not have being created for example in e-business the online transaction processing would have being useless because they will be no need for online transaction without the introduction of e-business. In the case of virtual organisation technology has help make it work for example the internet has made it easy for a virtual organisation to form and re-form alliances and to create blurred boundaries of the organisation, break down barriers to entry and gain access to new markets. Technology has also helped virtual organisation advance information and communications technologies. It has also have in flexibility, improved security, low costs, and improved resource utilization. Technology has helped communication to allow members separated by time and space and often culture, geography, history and future to engage in collaborative work.
Benefits of E-business are that it gives the opportunity to choose a business model, it redefines the business relationship, it introduces cost saving for the company i.e. advertising or overhead costs, it gives the company access to new global markets, the company gets introduced to E-commerce, it gives companies like banks Customer knowledge for instant knowing the customer by first name.
Benefits of technology are better communication i.e. able to reach more people with the help of the internet, saves on over head costs, it introduces cheaper ways of promotion and been visible to the customers and potential customers, technology gives better storage methods i.e. banks storing information on the magnetic strip of a credit/debit card or super markets storing information on a bar code, it introduces better ways of communicating.
Benefits of virtual Organisation are the partners share risks, share costs, it breaks down market barriers to new products by rallying the required skills and expertise from groups, individuals, and even rivals from outside organisational boundaries, it give the partners access into new markets, expertise and technologies, it introduces increased flexibility of organisations and finally it improves customer relations for the partners.
As discussed I believe that technology, virtual organisation and e-business work to complement each other. Technology is important for both e-business and virtual organisation because both need some sort of technology to be able to exist or work for example virtual organisation can not succeed without technology. It needs technology to set up a networks, communications, security and e-business can't exist without the help of technology because technology is needed to embrace information technology foe example support the internet, World Wide Web, electronic mail, groupware such as lotus and video conferencing. In terms of technology without e-business and virtual organisation the technologies will not be designed or created for example in e-business the online transaction processing would have being useless because they will be no need for online transaction without the introduction of e-business. Technology has also helped virtual organisation advance information and communications technologies. It has also have in flexibility, improved security, low costs, and improved resource utilization. Technologies has helped communication or have meetings to allow members separated by time and space and often culture, geography, history and future to engage in collaborative work.