TABLE OF CONTENTS

I. ECOMMERCE VS EBUSINESS.....................................................................................2

II. EBUSINESS TECHNOLOGY........................................................................................2

III. EBUSINESS INFRASTRUCTURE...............................................................................2

IV. EBUSINESS STRATEGY.............................................................................................3

V. EBUSINESS ORGANISATION.....................................................................................3

VI. EBUSINESS SOCIAL AND HUMAN COMPONENTS................................................3

VII. BALANCE OF RISKS AND OPPORTUNITIES..........................................................4

VIII. ADOPTION OF EBUSINESS INITIATIVES...............................................................4

In recent growing global economy, eCommerce and
eBusiness have become a must have component for
better business strategies and an effective catalyst
for economic development. However, there is a lack
of understanding of these technology hypes and
businesses fail to appreciate the importance of
eBusiness’ various components – Technological,
Infrastructural, Organisational and Human. There
are many opportunities as well as risks which
coincide with eBusiness which will also be discussed
in this paper.
I. ECOMMERCE VS EBUSINESS
Although many people would assume that
eCommerce and eBusiness are interchangeable, they
are quite different concepts.
eCommerce is selling goods and services on the
retail level with anyone, anywhere, via the internet. It
includes new business opportunities that result in
greater efficiency and more effective exchange of
goods and services. The crux of this exchange is
transactions – information exchanged between an e-
merchant and a customer via the web (Awad 2006,
p.8).
eBusiness goes beyond a Web site on the Internet to
affect all aspects of business from strategy and
process to trading partners and ultimately, the
consumer. eBusiness is the conduct of business on
the Internet, in supply-chain planning, tracking,
fulfilment, invoicing and payment. It includes buying
and selling as well as servicing customers and
collaborating with business partners (Nelson, T
2000).
Electronic information is used to increase
performance and creative value by forming new
relationships between and among businesses and
consumers. eBusiness combines the resources of
traditional information systems with the global reach
of the Web (One Workplace, 2010).
Awad (2006) states that in eBusiness,
organisations have several goals in mind:
1. Reach new markets
2. Create new products or services
3. Build customer loyalty
4. Enrich human capital
5. Make the best use of existing and emerging
technologies
6. Achieve market leadership and competitive
advantage
2
Based on the above we can state that eBusiness is an
extended form of eCommerce where organisations go
beyond the buying and selling (transacting) of
products and services over the Internet and links
business systems directly to consumers, employees,
and business partners, using Intranets, Extranets,
eCommerce technologies and the Web.
II. EBUSINESS TECHNOLOGY
eBusiness organisations have many systems that
makeup the technology framework. These include
Intranets, private computer networks that use Internet
Protocol technologies to securely share any part of an
organisation’s information or operational systems
within that organisation (Sinha et al. 2009), Extranets
which are private networks used to securely share
part of an organisation’s information or operations
with suppliers, vendors, partners, customers or other
businesses (Sinha et al. 2009). These two
technologies are used expressly for internal
communication. The organisation would also have
modems, computers, and other hardware to run the
many communication, client or browsers softwares to
run an eBusiness.
There are many companies which offer
eCommerce suites such as IBM and YAHOO!. These
products will differ in terms of price, platform,
functionality, ease of use, and scalability but the
common features of an eCommerce suite are stock
handling, order collection, card processing and
accounting (Lister, 2010). Small Businesses are
known for using these off-the-shelf eCommerce
suites as it can be very expensive to create and
maintain all the functionality required for a good
eCommerce site.
Larger organisations need business-wide systems
which can integrate many departments and functions.
This is where an ERP or Enterprise Resource
Planning system comes in. ERP is a massive
software architecture that supports the streaming and
distribution of geographically scattered enterprise
wide information across all the functional units of a
business house (TopBits, n.d.). Such systems are
necessary to ensure all information across the
business is managed in a way that allows managers to
make important decisions regarding the business and
its strategy.
III. EBUSINESS INFRASTRUCTURE
 Infrastructure is a major issue today as it is the
crucial determinant of how easily organisations can
respond to the increasingly urgent demands of the
market.
The technical infrastructural elements of e-
business consist of Internet and server technologies,
hardware and software. That is, the Internet, intranets,
extranets, networks, security solutions and a myriad
of applications promoting customer relationship
management, knowledge management, business
intelligence, integrated supply chain management and
many others (Optima Media Group, 2006). However,
infrastructure is much more than technology. It is the
dynamic interaction and management of strategy,
skilled people, tools and processes.
Due to the changing environment of eBusiness,
company infrastructures grow over time. There may
have been an initial plan for a firm’s computing
environment, but as the size and needs of a company
changes and as technology advances, the architecture
of the infrastructure also changes.
Companies must make it their objective to find
infrastructures that are compatible with their strategy,
offer the possibility of strategic advantage and hence
are hard to copy by competitors (Gray, P 2006,
p.246). Depending on the amount of investment
available to the company this may be simple or
challenging.
IV. EBUSINESS STRATEGY
Before an eBusiness strategy is put in place it
must be carefully formed. eBusiness strategy
formulation involves a review of the way
information, information systems and information
technology are used in a business to create business
value and to enable the achievement of strategic
business objectives. It also involves a search for
opportunities to utilise new opportunities profitably
for the application of information systems and
information technology in the course of creating
value and supporting the business strategy (McKay &
Marshall 2004, p. 54).
As with a traditional bricks and mortar business,
an eBusiness organisation must also have a strategy
which states its mission, vision and objectives
through developing policies and plans to achieve
these objectives.
Once a strategy is put in place it is important for
the company to manage its strategy through an
ongoing process that evaluates and controls the
business and the industries in which the company is
involved; assesses its competitors and sets goals and
strategies to meet all existing and potential
competitors; and then reassesses each strategy
regularly to determine how it has been implemented
and whether it has succeeded or needs replacement by
3
a new strategy to meet changed circumstances, new
technology, new competitors, a new economic
environment., or a new social, financial, or political
environment (Lamb, R 1984).
An eBusiness strategy provides a larger picture
that shows how all the individual activities are
coordinated to achieve a desired end result and
therefore is essential for a successful eBusiness
venture.
V. EBUSINESS ORGANISATION
The eBusiness space is ever-evolving and
therefore organisations have many different
organisation structures: some companies have strictly
an online marketing or social media only focus, some
are “web teams,” others are channel marketing
focused, while others are a combination of all facets
(Long, 2009).
Organisations must structure the roles and
responsibilities of each employee based on the
strategy of the company. If the strategy is to be a first
mover when new technologies or market
opportunities arise, then the organisational structure
should coincide with this strategy. This might mean a
flatter organisation with multiple teams which can
easily adopt a new project quickly.
The organisational structure must also be set up
to allow for effective and efficient communication
with suppliers, vendors or business partners, whether
this be a unique team within the organisation or a
representation within each major department who
focuses on external relationship management.
There is no one way of structuring an eBusiness
organisation but it must be planned to allow for the
company’s strategy and objectives to be carried out
successfully.
VI. EBUSINESS SOCIAL AND HUMAN
COMPONENTS
When organisations think of eBusiness they
ultimately think of the technologies that will be
needed to achieve their objectives. Little thought is
sometimes given to the social and human aspects of
moving into an eBusiness venture.
The social perspective emphasises the role played
by people and organisations (particularly
organisational culture and policies) in a system and
the impact of change, especially technology-based
change, on people (Khosla et al. 2003, p. 107).
Reluctance to change has its origins from many
perspectives of the people involved. These
perspectives may include; disruption to routine, fear
of the unknown or a misunderstanding of the change.
Consequences of not managing change can include:
reduced morale and commitment; reduced
productivity and failure to maintain schedules.
Change management is essential to the success of
eBusiness as it is constantly evolving and therefore
organisations must change its structure or strategy or
technology when it feels it is not achieving its goals.
Knowledge and culture are two every important
aspects that can drastically impede the success of an
organisation, if not properly nurtured. Knowledge
management must take place to generate and transfer
knowledge through the organisation while culture
must be maintained to foster innovation, team work
and a focus on accomplishing the organisations
objectives.
VII. BALANCE OF RISKS AND
OPPORTUNITIES
eBusiness is a great way for organisations
large or small to connect to new or loyal customers
all around the world. With all the opportunities that
eBusiness gives, there are risks associated with doing
business online. Some of the opportunities that
eBusiness can give organisations include reaching
new markets and customers as there is no longer a
geographical boundary that bricks and mortar
businesses have. A small company can reach large
numbers of users across the world which would
ordinarily be very costly for any offline business, but
the internet allows small companies to compete with
larger companies on an even scale.
Although eBusiness is seen to be cost
effective, initial set up costs of a website, including
its applications, software, hardware and advertising,
are quite extensive and therefore only large
organisations have the money to invest heavily into a
fully functioning website. Website maintenance
including upgrades and updates are necessary to keep
up to date with consumers and the way they shop as
well as keeping a competitive advantage. If this
investment is not made in the initial set up or during
the website’s lifetime, consumers may turn to a
competitor or not even be aware of the websites
existence as marketing expenditure was not
considered during start up.
eBusiness also allows businesses to
streamline business processes and therefore improve
service efficiencies and increase customer
satisfaction. If proper communication among the
organisation’s partners, suppliers and vendors is not
encouraged, then inventory systems become useless
and inefficiencies occur during the order fulfilment
process.
4
Technology itself poses a risk to eBusiness,
simply because it is so dependant on it. Infrastructure
problems, such as a server malfunctioning, can shut
down a website. Likewise, viruses can delete
valuable data and software glitches can keep a site
from working properly. Outside attacks from
hackers, who want to steal sensitive customer
information or deface a site is also a risk that
eBusiness merchants must try and guard against.
Online customers are quite fickle and if they perceive
a problem with a company’s website even once, they
may never return (Mann, 2010).
Though it is not possible to eliminate all
potential risks to the business the organisation should
still invest time into setting out a risk management
framework which should reflect where the greatest
potential risk lies, set out practical measures to reduce
the risks to their lowest possible level and reflect the
costs and benefits of taking action to reduce or
eliminate these risks (Businesslink.gov.uk, n.d).
VIII. ADOPTION OF EBUSINESS
INITIATIVES
The motivation to purchase online for
consumers is compelling; lower prices, wider
selection, and detailed product information – all
available 24 hours a day. If the consumers are
moving online, then why wouldn’t all businesses
adopt an eBusiness model? There are many
advantages and disadvantages for various businesses
to enter into an eBusiness venture.
Organisations are able to reach the global
market as eBusiness caters to the demands of both the
national and international market due to the lack of
geographical boundaries. Time restrictions are also
nonexistent as users can access the internet 24-7-365.
This in turn significantly increases sales and profit.
eBusiness also significantly cuts down the cost
associated with marketing, customer care, processing,
information storage and inventory management. It
reduces the time period involved with business
process re-engineering, customization of products to
meet the demand of particular customers, increasing
productivity and customer care services (Bora, n.d.).
Through the collection of customer data,
organisations can create effective marketing plans
and promotions. The adoption of eBusiness would
allow the organisation to access more consumers
throughout the world, offer them an effective and
efficient order fulfilment process therefore increasing
customer satisfaction and potentially increase sales
while gathering consumer data to enhance marketing
and promotion strategies.
The adoption of eBusiness can also cause
many issues for organisations who do not understand
the market or do not take the necessary precautions to
minimise risk. Security is one of the biggest potential
risks that can deter organisations from adopting an
eBusiness venture. Constant maintenance of security
software systems, upgrading computer systems,
training personnel, and updating websites requires
substantial resources (Lyer, n.d.) and organisations
with limited funds should reconsider the adoption of
eBusiness as these components are necessary for a
successful online business. Not all business sectors
would benefit from taking on an eBusiness model.
The selling of perishable items is still largely set in
Bricks and Mortar businesses. Considerable
investment into inventory management and delivery
systems would need to occur for online supermarkets
to thrive to the same extent as say, the online
electronics market.
The adoption of an eBusiness model would need
considerable analysis of the business, its competitors
and the online market it desires to enter before
formulating an eBusiness strategy. eBusiness
technology, infrastructure, organisational structure,
strategy as well as social and human components
must be considered as well as the opportunities and
risks involved in the online market. When all of these
elements are done effectively, the benefits for both
the business and the customer are vast.
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