The literal meaning of the term, "E-Business" is Electronic Business, which had been derived by the Think Tank of IBM Ltd. during the mid nineties in India. Electronic business is one of the most convenient modes of business conducted over the Internet. E-Business is one of the boons of the technological revolution in the country and it has taken the entire industry by storm. It is not only the large corporate houses and huge multinational companies that have taken up this dramatic methodology of conducting business, it has also spurred the medium and small scale industries as well as entrepreneurs to adapt to this radical type of carrying out business. The transition of the conventional method of carrying out businesses from the confines of the premises of an office and ware houses and limiting it to the comfort of a person's residence is overwhelming. An E-Business provides an entrepreneur a farther and wider reach and therefore increases the client data base manifold in comparison to a business operated from a physical location of an office.
There are several factors which determine the success of any E-Business. One of the significant factors lies in the selection of the appropriate and latest computer hardware and software, which have proved their worth in allowing a person to run his business independently and make it a tremendous success. The entire use of both information technology and communications spell a successful business. One of the basic reasons for conducting E-Business is that the internet is one of the main conduits to a global trade. E-Business opens new vistas as well as wide horizons for an entrepreneur, who is contemplating to make global presence. The systems adopted through E-Business provide companies with the unique advantage of connecting their internal as well as their external data bases with the utmost efficacy. This connection lends the entire business with a cohesiveness and flexibility to interact with the suppliers and other partners enabling them to meet the expectations of their customers, who are the end users.
A gamut of processes is involved in the operation of E-Business which runs across the entire value chain. A value chain comprises of electronic purchases and management of the supply chain, electronic processing of customer orders, managing customer service and extending total cooperation to business partners. A host of software is presently available to carry out an e-Business successfully. The software offers dependable solutions at the same time including permissions for integration of intra or inter-firm business processes. The Intranet, Internet and extranet along with the usage of the web or a combination of these allows an entrepreneur to carry on his business effectively. The progression of data exchange between different companies is smoothened through the availability of special technical standards for E-Business. It is through the widespread use of the internet technologies that can possibly turn around any type of business to become a resounding success in terms of productivity and profitability.
A Supply Chain Management (SCM) is a process that is deemed to be significant in the management of the delivery of goods from the supplier to the purchasers. It is also considered to be as a process required for the optimization of a firm's internal practices essential for interaction with suppliers as well as customers to usher products into the market in an efficient manner. The role of a Supply Chain takes care of the prediction of the market demand, procurement and outsourcing, warehouse management and inventory control, distribution logistics as well as other disciplines. In cases where the Enterprise Resource Planning fails, the Supply Chain Management takes up and becomes a terrific success. However, the Supply Chain Management Systems requires the database of the Enterprise Resource Planning to precisely predict inventory levels. A robust SCM encompasses the optimization and systematic organization of the operation and tactical information and techniques internally and in between these two processes. The Supply Chain Management is closely associated with the enhancement of business processes and value in every corner of the widespread enterprise starting from the supplier's supplier to the customer's customer. SCM has the capability of using E-Business concepts and web technologies to elevate the organization's operations. The tactical methodology unifies all the phases in the business cycle from the initial stages of product design through procurement of raw materials right up to the delivery of the end product to the customer.
The functionality of E-Business is often deemed to as E-Commerce and the generalized terms are at times used in conjunction with each other. E-Commerce is usually considered to be buying and selling through the Internet, yet it is essentially carrying out business online. It is due to some software programs that have the capability of running the main functions of an E-Commerce website that constitute showcasing of products, online ordering and management of inventory stocks. These software programs reside on the server and perform in juxtaposition with online payments methodologies through processing payments. A typical E-Commerce takes into consideration Business to Business, Business to Consumer and Extended Enterprise Computing to be the emerging value chains. In the US economy, E-Commerce plays a major role since it helps companies with several levels of current business transactions besides formulating fresh online business avenues mostly global in content.
There are several aspects of E-Business where besides purchase and vending of products, there are other areas pertaining to the conservative business. When a vendor sells a product to a customer, he is also required to provide after sales customer support which is one of the salient parts of a business. The usage of the chat facility on the internet unfolds a vast area of online conversation thus dispensing with the use of the telephone which saves valuable time of both the vendor as well as the customer. It is one of the most convenient methods of communication with customers, especially when it comes to technical support.
One of the facets of conducting E-Business is using the internet for procurement of goods and merchandize in wholesale or for raw material for internal production usage. This part of the business is known as e-procurement and offers vast chances to drastically cut down costs. E-procurement is an integral part of E-Business and several E-Businesses are using the E-procurement method without any physical storefront. This has proved to be a far better method of managing and tracking the purchases made by the entrepreneur. During the past few years, it has been observed that practically all kinds of businesses have transformed into E-Businesses. There is an increasing trend in E-Businesses which could be attributed to the rising popularity of the Internet technology which has proved to be the window to the world. The internet coupled with the ready made solutions through software along with the repetitive portrayal of the advantages of the growing technologies has paved the path for E-Business. In the present scenario, there is a growing belief among people to reduce paperwork and maintain a paper-free office without maintaining any files physically. The extensive use of the internet in the modernized techniques of e-mail or electronic mail, personalized websites and chat actually eliminates the use of letters and memos which were at one time the archaic form of conducting business. An email listing or a central server can prove to be a far more efficient system for dissemination of critical information to all employees rather than distributing paper sheets as copies for each person thus reducing valuable time. One of the most significant features of E-Business lies in the area of faster distribution of information which has become its forte besides elevating businesses to an international level at the bare minimum cost and in a reasonably short time.
It would be pertinent to mention that Internet as a separate entity provides the maximum efficacy through convenience and maximum speeds. In the present market conditions, a customer always demands reliability products and precise information in a manner that is fast and easy. E-Business using the internet at the center of all business dealings assists a company to become more customer-friendly besides bringing in a far more efficient interchanging of information on both merchandize and support services.
One of the advantages of E-Business is that it eliminates the limitations on acquiring a physical location as well as availability of the concerned person. In fact, physical locations are limited by size and only those customers who are able to visit personally. On the contrary, E-Business brings over a global market at your doorstep with customers and seekers of information waiting in a queue. It is not mandatory for a person to be located in a particular place since any type of business transactions may occur at any point of time on any day, 24 x 7 types of services from any place across the globe by access through the internet. E-Business has certainly brought a turnaround for businesses and has proved to be beneficial especially as far as the reduction of escalating costs is concerned. There is no requirement of a physical location and payment of leasing or rental costs when compared to maintaining an online site. In any conventional business, it takes time and money to complete various procedures which are removed and these tasks are fulfilled through electronic processes that are considered to be easier on the wallet. It is far cheaper to send a direct mailer through an email list of 100 people by sending a single email copied to all these people and coming to evaluate the cost of paper, postage and staff it is nothing. Customer satisfaction takes the center stage when it comes to E-Business.
The internet has proved to be one of the most potent channels to reach fresh markets and communicating with customers and business partners which creates a better comprehension of the requirements of each of them thereby revolutionizing customer satisfaction. In E-Business, customers are bound to receive personalized service and effectual communication capabilities. Faster response times are the order of the day with flexibility in hours and availability through online support which is only possible through the internet. Customer support services form a significant part of E-Business which involves a fast delivery cycle on sales and reinforcing a mutually fruitful business relationship with customers. Undoubtedly, E-Business provides entrepreneurs with a leading edge over competition since internet has broadened the horizons of E-Business. Since competition on E-Business is also showing an upward trend due to the expansion of the internet, inordinate delay may result in loss of business since easy access to actual information is one of the main benefits of internet. This access allows a company to provide authentic and efficient information thereby gaining advantage over those who are missing the bus. In the present day's market scenario, a shift over to the current trends is proving to be more beneficial and should be taken in the stride since inability to move as per the norms of the market would be a far bigger risk to take.
While there is a plethora of advantages of E-Business, however, there are certain disadvantages too, which any entrepreneur must not ignore. One of the major risks involved in E-Business is security since online traders manage and store vital and sensitive information. Ultimately technology is a resource of protecting smooth transactions of E-Business. It is the responsibility of online traders to handle clients' confidential information in a safer method since information at all points in a chain is highly prone to attacks of hackers. Clients when feel that the information is not protected move on to other online stores. This involves higher investments in providing security features and encryption of information all through the transaction to prevent hacking from both internal and external sources. In order to attain total optimization of services at all levels, it becomes mandatory for any E-Business enterprise to keep abreast with the times and incur costs on upgradation of the computer hardware and software, updating of websites and imparting adequate training to personnel to manage the business efficiently leading to heavy expenditure. While a large number of businesses have benefited from E-Business, the food sector has not found it to be appealing, since food as a commodity is a perishable product and over time starts getting stale. A majority of the customers prefer to physically shopping at a mall to purchase fresh food products. Prior to setting up an E-Business, an entrepreneur must understand the ins and outs of the business since any misunderstanding of the term E-Business could easily lead to a disaster. There are times when the key word technology itself leads to a failure since it requires money to be invested in updating and maintaining a website.
In E-Businesses, strategies play a significant role in providing a much better and effective management of the supply chain management which would ensure an excellent cohesion between the retailers and wholesalers of diverse types of merchandise. It would also assist in a better quality of amalgamation of the supply chain starting from the initial source right up to the final delivery of the product to the customer through effective implementation of this E-Business strategy. In E-Commerce too, there is a network of purchasing and vending which can be observed through the use through dissemination of information over the internet. It is due to the support of a powerful chain supply management that anything from an automobile to electronic goods can be purchased in an absolutely trouble-free manner over the internet.
One of the most important segments of any business is after sales support which essentially is Customer Support and a cordial and mutually beneficial relationship between the client and the supplier. The basis of any successful business is based on this criterion. A client always looks up to an after sales support which forms the basis of future sales. One of the objectives of E-Business is aimed at towards offering customer-friendly services to clients that would also take care of the delivery of the goods on time to the end-user. It involves optimum level customer support services coupled with an effective management of customer relationship.
The most significant attribute of any business is the superior quality of inventory management coordinated with service management. This can be achieved through creating precise plans for inventory stores and purchase of equipment and machinery, thereby eliminating superfluous purchases that would further lead to exorbitant expenses and various implications of taxes involved in the purchase.
A value chain essentially denotes a chain of processes relative to a firm operating in an industry. There are actually six business functions of a value chain, like Research and Development, Designing and packaging of finished products, Services or Processes, Production, Marketing. The essence of a value chain lies in the fact that as all products undergo a variety of processes of a value chain in a particular specific order and as the product moves towards the final stage of the value chain, the product gets better and better leading to value addition. This value addition on the product through a chain of activities is considerably far more than the total value of any independent activity. It would be inappropriate to merge the idea of the value chain with the cost involved throughout the process. Citing an example, a rough diamond is cheaper than a cut diamond, yet as it passes through the processes of cutting, it gains more value in terms of price. While the activity of cutting may be considerably low cost-wise, yet the cutting enhances value of the end product of a cut diamond.
The structure of the value chain proves to be a potent analyzing tool particularly for strategic planning purposes and became a tremendous success during the early '90's being at the forefront of the management concept. The notion of a value chain has the capability of expanding further than individual firms and can be used for complete distribution networks and supply chains. Diverse economic factors emerge in the process of delivering a mix of products and services, each managing its own value chain. The synchronization of these local value chains form an extensive value chain which at times reaches across the global extent. This extensive interconnection of value chains is popularly known as the Value System.
The easy adaptability of people to conduct E-Businesses through their laptops and i-net cell phones and PDAs has grown phenomenally and it is estimated that the present trend of E-Business would continue. There is hardly any doubt that E-Business in its manifest forms is here to stay and people would adapt to it in a much easier manner as compared to conventional business. However, before embarking on an enterprise, the entrepreneur should not overlook the risk factors involved in E-Business.
There are certain crucial factors that dominate the present day's economy. An entrepreneur needs to possess the capability of adapting to the rapid changes in the business environment. A person should also have acumen to be original and diverse from others in the field. A reduction in costs of operation of business requires a person to resort to automation. E-Business provides entrepreneurs a unique opportunity of doing business in a faster, cost effective and a far better way. A tactical edge gained today is certain to become tomorrow's cost of conducting business.
Economic efficiency is one of the most beneficial yields from E-Commerce. This results from drastic decrease in costs of communication, reduced technological costs on infrastructure, faster and more electronic transactions that take place with suppliers, lower sharing of information and advertisement expenses coupled with inexpensive customer support alternatives.
Source by Rajinder Kumar Gulati