How important is the e-business in today’s world and in what ways does it affect decision making in

corporations.

Student name: Rasheed Olawale Soetan, Student no: 7254432

University of Southcentral LosAngeles

INTRODUCTION

Technological breakthrough in such areas as fax machines, telephone, video player, audio devices
and televisions took many years to commercialize and measure their impacts on business compared
to this breakthroughs, telecommunications, information communication technology, miniaturization,
computers and internet went through shorter product life styles and achieved widespread diffusion
and reformed the nature of business operation and enhanced competitive business environment
instantly. This technological advancement has resulted in evolution and innovation of many
products, services and business processes. One of them is the emergence of e-commerce or
electronic business. The internet had resulted in emergence of virtual markets with four primary
distinctive characteristics, which are real time, shared, open and global. The application of internet is
divided into three major activities that are publishing corporate information, conducting electronic
commerce and business transformation. The greatest feature of the internet is absence of
intermediaries; the manufacturers are able to sell their products relatively easier to buyers via the
internet. E-business today is no longer a technological issue, but also business issue- commerce a
core aspect of e-business involves a number of forms, varying level of cost and complexities,
depending on the business need.

In the past few years, enterprises across the globe have experienced significant changes in their
business information system (BIS). Huge investments were made in business enterprise resource
planning , system implementations but still they struggle to get timely information that is needed to
make effective business decisions and to ensure continuous growth of enterprises. Placing “ e “ in
front of any process or function seemed to be the magic prescription for never ending story of
success and rapid returns for enterprises. E-business, e-procurement, e-sales, e-payment-banking, e-
CRM, e-CAD, e-delivery are just a few.

The emergence of the internet and e-business throughout the world has been contributing such a
variety medium in doing business as well as people lifestyle.

AN OVERVIEW OF KEY TERMS

Definitions of e-business and e-commerce

E-business has many definitions some of which are explored below; according to Elizabeth
Hardcastle in 2008 e-business involves several key activities including improving business processes ,
enhancing communication and providing the means to carry out business transactions securely.E-
business is a part of internet economy which encompasses all of the activities involved in using the
internet for commerce(1).
Electronic business commonly referred to as “e-Business ‘’ or “e-business ``, may be defined as the
utilization of (ICT) in support of all the activities of business. Commerce constitutes the exchange of
products and services between businesses, groups and individuals and can be seen as one of the
essential activities of any business.Electronic commerce focuses on the use of ICT to enable the
external activities and relationships of the business with individuals, groups and other businesses.
( 2 ).

E-business is buying and selling, servicing customers, collaborating with business partners and
conducting electronic transactions within an organisation. (3)

E-business refers primarily to the digital enablement of transactions and processes within a firm,
involving only the information systems under the control of the firm. They are those activities other
than buying and selling via electronic channels.(4)

E-business is all about time cycle speed, globalisation, enhanced productivity, reaching new
customers and sharing knowledge across institutions for competitive advantage.(5)

E-COMMERCE

A common activity associated with e- business is e-commerce which can be described as using
technology to conduct business transactions, such as buying and selling goods and services.

However e- commerce involves more than merely conducting electronic transactions: it also
encompasses a wide range of associated activities, such as after sales support and even logistics.

E-business can take a varieties of forms, including electronic data interchange (EDI), direct link ups
with suppliers, internet, intranet, extranet, electronic catalogue ordering and e-mail.

An e-business model must have:

1. A shared digital business infrastructure including digital production and distribution

technologies (broadband/wireless networks ,content creation technologies and information
management systems)which will allow business participants to create and utilize network
economies of scale and scope.
2. A sophisticated model for operations, including integrated value chains-both supply and buy
chains.
3. An e-business management model consisting of business teams and or partnerships; and
4. Policy , regulatory and social systems that is business policies consistent with e-commerce
laws, teleworking / virtual work, distance learning ,incentive schemes among others.

E-commerce activities can be broken down into the following basic types :

- Business-to-business (B2B).Transactions take place between companies.Approximately

80percent of all e-commerce is of this type.
- Business-to- consumer (B2C). Companies sell products directly to consumers.B2C can involve
activities such as product research ( where consumers gather information and compare
 prices)and electronic delivery( where information products are delivered to consumers via e-
mail or other means).
- Business –to-government (B2G).Transactions take place between companies and public
sector organizations.
- Consumer -to- consumer (C2C).Transactions take place between private individuals. Perhaps
the best examples of C2C commerce are online auction sites and peer-to-peer systems.
- Mobile Commerce (m-commerce).M- commerce is a relatively new development and
involves selling goods or services via wireless technology, especially mobile phones.

E-business processes are usually quite simple. In most instances, it is the buyers who dictate terms,
yet many systems are very supply-centric. Within some sectors, notably aerospace, there have been
a number of e-business portals and hubs to encourage e-business, particularly for those within
existing supply chains. (11)

Adoption steps of e-business services involves:

Step 1. Messaging (internal and external e-mail).

2. Marketing and stock availability checks.

3. Online ordering.

4. Online payment.

5. Monitor order progress.

6. E- business.

Source DTI (2000) Chaffey 2nd Edition.

Six e-business strategic decisions :

-E-business priorities

-Business and revenue models

-Market place restructuring

-Market and product development

-Positioning and differentiation

-Organisational restructuring

Source: Chaffey (2007) fig 5.6

CORPORATIONS

A corporation is a company recognised by law as a single body with its own powers and liabilities,
separate from those of individual members. Corporations perform many of the functions of private
business, government, educational bodies and the professions.

DECISION MAKING

A decision is a choice or judgement that you make after a period of discussion, thought or
consideration. Decision making is a process of making important decisions.Every organisation makes
decisions at every point in time of their existence.There are various methods and processes of
decision making.However, the main aim of all decisions of corporations is to achieve their corporate
objectives .The core of these objectives is profit making and profit maximisation.

HOW IMPORTANT IS E-BUSINESS IN TODAY’S WORLD

E-business has gained a lot of popularity in today’s world due to a multitude of operational benefits
it can bring to purchasing practices. Examples of benefits are: cost savings resulting from reduced
paper transactions, Shorter order cycle time and the subsequent inventory reduction, resulting from
speedy transmission of purchase order related information and enhanced opportunities for the
supplier/buyer partnership through the establishment of a web business-to-business communication
networks.

E- Business is enhancing supply chain efficiency by providing real –time information regarding
product availability, inventory level, and shipment status and production requirements. It is vastly
facilitating collaborative planning among supply chain partners by sharing information on demand
forecasts and production schedules that dictate supply chain activities.

Moreover, it effectively links customer demand information to upstream supply chain functions e.g.
(manufacturing, distribution and sourcing) and subsequently facilitating ‘’pull’’ (demand –driven)
supply chain operations. (7)

Aside from the above importance, e-commerce serves as an ‘’equalizer ‘’. It enables start-up and
small-and medium sized enterprises to reach the global market.

Example of: Levelling the playing field through e-commerce the case of Amazon.com.

‘’ Amazon.com is a virtual bookstore .It does not have a single square foot of bricks and mortar retail
floorspace .Nonetheless , Amazon.com is posting an annual sales rate of approximately $1.2
billion,equal to what about 235 Barnes & Noble (B&N) superstores. Due to efficiencies of selling over
the web,Amazon has spent only $56million on fixed assets while (B&N) has spent about $118million
for 235 superstores.( To be fair Amazon has yet to turn a profit ,but this does not obviate the point
that in many industries doing business through e-commerce is cheaper than conducting business in
traditional brick-and-mortar company).’’(8).
E-commerce as a major tool of e-business is making ‘’ mass customization’’possible.e-commerce
applications in this area include easy -to-use ordering systems that allow customers to choose and
order products according to their personal and unique specifications.For instance ,a car
manufacturing company with an e-commerce strategy allowing for online orders can have new cars
built within a few days (instead of several weeks it currently takes to build a new vehicle) based on
customer’s specifications. This is working more effectively where a company’s manufacturing
process is advanced and integrated into the ordering system.

E-commerce allows ‘’ network production’’. This refers to the parcelling out of the production
process to contractors who are geographically dispersed but who are connected to each other via
computer networks. The benefits of network production include: reduction in costs, more strategic
target marketing,and the facilitation of selling add-on-products,services, and new systems when
they are needed.With network production, a company can assign tasks within its own core
competencies to factories all over the world that specialize in such tasks e.g. the assembly of specific
components.

To be consumers in C2B transactions,customers/consumers are given more influence over what and
how products are made and how services are delivered,thereby broadening consumer choices.E-
commerce allows for a faster and more open process with customers having greater control.

E-business has now become an element of overall business strategy and it is still widely seen as a
way of transforming business operations and thinking.

E-business models have been benefitting communities that are sustaining significant collaborative
relationships despite geographical diversity of membership. Meanwhile e-commerce focuses
primarily on enterprise’s customers,it enlarges the connectivity of the enterprises to include their
suppliers, employees and potential investors or partners.

E-commerce is the most important application of the new communication

technology,manufacturers,traders and consumers can now reach the market more quickly and get
more information that they could ever get before.The electronic commerce has penetrated the
businesses in many ways.E-business has reduced the transaction costs via e-commerceallied with
purchase, sales, operating, holding,inventory and financial cost.The application of e-commerce
through development of websites enhances the potential global market and sales revenue,bring
forth new products,potential new customers,services and geographical areas.In term of non financial
benefits , e-commerce has significantly helped in improving human resources and timeliness, quality
of services, customers’ satisfaction and some indirect effects.

Research forecasts that e-commerce will account for 86% of worldwide sales of goods as services by
year 2004.The potential for e-commerce is brighter, specifically in those markets where buyers and
sellers are motivated to reduce costs, increase efficiency and cut delivery time.By 2003 estimated
revenue from e-commerce across the globe was to be approximately 1.5 trillion dollars the rate of
growth varies due to the development of infrastructure especially in developing
countries.Projected internet users by the end of 2000 are approximately 48%(North America),22%
(Western Europe),17% (Asia Pacific) and 7% (Middle East/Africa) which of course stimulate further
growth of e-commerce.(6)

As at September, 2002 the internet the carriage of e-business reached two important milestones
with 200 million IP Host and 840 million internet user.(12)

WAYS BY WHICH E –BUSINESS AFFECTS DECISION MAKING IN CORPORATIONS

Any organisation that will embark on e-business must take a decision on its business information
system ( BIS)as there will be the need for the corporation to have a good understanding of computer
based systems before it embarks e-business solutions .More often than not corporations do not opt
for radical changes to their purchasing and customer supply systems- indeed paper based systems
are often maintained in parallel .Usually, they modify and extend existing computer based systems
such as ED I ,or they extend e-business options but retain older non computing systems. (7)

Since there are many factors affecting the e-business strategy such culture, leadership, motivation,
infrastructure, globalisation, industry, size ,competition, supply chain integration mechanisms.

Basically on e-business strategy corporations these days are taking various decisions, while some
have decided to improve on their supply chain management strategies such as repackaging their e-
marketing tools,improving on planning,scheduling and change management,e-business analysis and
design implementation and maintenance of existing infrastructure and control.

Others have busy themselves with taking decisions on selling directly to their
customers(disintermediation) while some involves new intermediaries though with its risks.

Some corporations have decided to hold on to old customers’ relationships others enter partnership
with intermediaries and a host of others do nothing to automate their existing structures.

Taking to cognisance product and market development decisions of corporations the following are
some of the ways e-business affects them: more corporations have firmly decided to enhance their
market penetration via selling more of their existing products to existing market relying on
favourable customers’ perceptions.

On market development on the other hand, some corporations are using new channels for new
markets for existing products which includes geographical expansion i.e. international sales.

Particular trend can easily be noticed on product development decisions of corporations in the field
of information/news delivery that have decided to be having e-versions of newspapers or magazines
that interested customer can subscribe to for some fees.
Generally however, some corporations have decided to diversify by creating varieties of new
products to sell to new markets not minding the fact that this involves more unknown factors and so
higher risks.

Many corporations have already decided on having creative positioning of an e-business strategy. A
good example can be found in the instance stated below;

‘’ Dawson’s antiques is a 23 year old small antiques business .With the emergence of online auction
sites , the owner ,Linda Dawson ,foresaw the need not only to accommodate the internet in their
business strategy but also to take advantage of it in order to survive as a business. This came with
the recognition that many of her clients were exposed to a wide of antiques from competitors at
online auction sites at prices lower than she was charging.

Meanwhile, Sotheby’s, then a growing online auction site (and now one of the largest online auction
sites), realised the merit of increasing its auction inventory to attract a bigger audience on the
internet .It revised its internet strategy by opening its website, Sothebys.com, to smaller dealers and
auction sites instead of competing directly with its competitors in the online auction business. With
this approach, Sotheby experienced an exponential growth in its inventory, which attracted a bigger
market.

Dawson’s enlistment in Sotheby’s was instrumental in expanding its client base. To make things
easier, Sotheby’s not only provided the web site for its members (Dawson’s included)’’. (8)

WHERE WILL E-BUSINESS GO FROM HERE?

As we have seen , e-business has taken a number of paths since companies first started using web,
and since they began to take advantage of e-commerce opportunities. As technology advances and
the web users become more immersed in it,e-business will inevitably have to evolve and adapt to
change in the web culture.

Overall, we can expect to see the following e-business movement s in the coming years:

- Renewed SME entrepreneurialism ; Economic drivers will catalyse the resurgence of

entrepreneurialism, as disenfranchised employees look to the web for new opportunities
.Small businesses in particular will also be able to offer lower costs to their customers, so the
coming years will be an interesting time for small businesses with little capital to play with.
- A social media slowdown may be witnessed as many organisations are already feeling
saturated by social media tools. Savvy businesses may look to tools to help consolidate their
use of social platforms-perhaps through one port of entry or single sign on.
- An online advertising revolution; Downloadable widgets (tools that allow chunks of codes to
be distributed through third party sites) will continue to have far –reaching possibilities-
especially to drive online sales and further marketing and PR. So instead of static banner ads,
companies will increasingly put interactive content in their place.
 - Greater customer-centricity ; Leaders in e-business already allow users to choose what
content they see ,and e-commerce sites in particular can target products and service to
those most likely to make a purchase . However, sites that allow customers to choose what
they see( as well as buy) will strengthen trust and increase their sales.
- The dawn of the e-commerce price wars; As the recession persists, price wars will continue
to break out between both store and online rivals.However as retailers drop their prices
further ,they risk devaluing some of the brands they represent.Therefore, many
manufacturers-dependent on their product type-may choose only to work with more
established ‘ bricks & mortar’ outlets with an e-commerce channel-or simply sell directly
their customers online. (14)

CONCLUSIONS

The rapid growth in e-business around the world has prompted many to look for better ways of
measuring the phenomenon .As more and more countries and international agencies become
involved, it is important to develop plans to ensure that there is no unnecessary duplication of
efforts and that users have the data necessary for informed decision making at the earliest
opportunity.

Despite various potential benefits of e-business ,not every corporation is ready to adopt it as a
purchasing tool or business strategy .Some serious hurdles to the successful implementation of e-
business include a host of security, legal and financial problems, all of which are significant factors in
business decisions for e-business introduction .In particular ,the incoherence of the web and
concerns about security and flexibility limit the confidence of business in internet based trading
systems .Current e-business systems do not yet fully address these concerns, and most concentrate
on bilateral relationships between sellers and buyers.

From the above discourse, it can be easily argued that e-business in today’s world is a silver bullet
that is no doubt a very important and useful tool for many corporations and individuals that are
ready to catch up with the current trend of change in the business world. Corporations’ leaders and
individuals that want to maximise their benefits should therefore not only listen to the popular
press or consultants, but rather put in place sense making approaches that questions e-business
appropriateness to their corporations and its circumstances.

REFERENCES:

1. Elizabeth Hardcastle (2008).Business Information Systems, Ventus publishing Aps ISBN 978-
877681-463-2 p.20.
2. Beynon Davies P. (2002), E-business. Palgrave Basingstoke ISBN 1-4039-1348-x.
3. Turban, Efraim,David King , Jae Lee and Dennis Viehland (2004) Electronic Commerce: A
Managerial Perspective , Pearson Prentice Hall, New Jersey.
4. Laundon , Kenneth C & Carol Guercio Traver (2003).E-Commerce: Business,Technology and
Society. 2nd edition. Pearson Addisson Wesley, Boston.
5. Louis Gerstner (2002) Who Say Elephant Can’t Dance.
6. Sussan, A.P., Kassira, RD (2003). Globalisation and the role of E-Commerce.Business
Research Yearbook, ABD, 10,7 : p 211-215.
7. Quayle, M . (2003) E-business in a turbulent world: Usage in European Small and Medium s
ize enterprises ; International Journal of Electronic Business,Vol. 1, No. 1 pp.41-52.
8. Zorayda Ruth Andam , E-Commerce and E-Business, May (2003) eASEAN Taskforce UNDP-
APDIP.
9. Tim Coltman et-al , E-business : Revolution , Evolution or Hype?
10. Van Hoek, R (2001) ‘’ E-Supply Chains Virtually not existing’’ Supply Chain Management, Vol.
6 No 1 pp.21-28.
11. See www.aerohub.co.uk
12. See netsizer.com- from Tel cordia
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