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9.1 Introduction
In the earlier unit, you have learnt about new trends in MIS. As you have
learnt in the earlier unit about DSS AI and expert systems, it gives you a
brief overview of the relationship between AI and expert systems. In this unit
you will learn that with the emergence of Internet, business organisation of
20th century has undergone structural, cultural and qualitative change, and
a new organisation structure has emerged which is known as E-business
enterprise. E-business enterprise enables employees, professionals, teams,
groups, vendors, customers to perform business operations through
electronic exchange of data and information anywhere at any time. The
business operations are performed through E-communication and
E-collaboration initiatives. Therefore, E-business enterprise has a global
market, reach, source and global competition.
Learning Objectives
After studying this unit, you will be able to:
Explain the challenges before an E-business management.
Compare and contrast E-enterprise business model with traditional
business organisation model.
Explain the four business models that the enabling capabilities of
technology have given rise to.
a part of MIS. It is effectively used for strategic planning for survival and
growth, increase in profit and productivity and so on.
To achieve the said benefits of E-business organisation, it is necessary to
redesign the organisation to realize the benefits of digital firm. The
organisation structure should be lean and flat. Get rid of rigid established
infrastructure such as branch office or zonal office. Allow people to work
from anywhere. Automate processes after re-engineering the process to cut
down process cycle time. Make use of groupware technology on Internet
platform for faster response processing.
Another challenge is to convert domestic process design to work for
international process, where integration of multinational information systems
using different communication standards, country-specific accounting
practices, and laws of security are to be adhered strictly.
Internet and networking technology has thrown another challenge to enlarge
the scope of organisation where customers and vendors become part of the
organisation. This technology offers a solution to communicate, co-ordinate,
and collaborate with customers, vendors and business partners. This is just
not a technical change in business operations but a cultural change in the
mindset of managers and workers to look beyond the conventional
organisation. It means changing the organisation behaviour to take
competitive advantage of the E-business technology.
The last but not the least important is the challenge to organise and
implement information architecture and information technology platforms,
considering multiple locations and multiple information needs arising due to
global operations of the business into a comprehensive MIS.
Business
Description Example
Model
Virtual Store Provides information about amazon.com,
product, and sells and delivers rediff.com,
directly to customer or business ebay.com.
organization.
Information Provides information of interest yahoo.com,
Store and earns revenue from sharing msn.com rediff.com,
and advertising. satyaminfoway.com
Transaction Processes bills for payment, icici.com
Process telephone, electricity, money billjunction.com
transfer & banking transactions, seekandsource.com
membership for club registration.
Online Provides a marketing platform eauction.com
Marketing where buyers and sellers can seekandsource.com
meet to exchange information,
negotiate and place order for
delivery. Examples are shoes,
commodities.
Content News, music, photos, articles, timesofindia.com
Selling pictures, greetings are stored and gartner.com
sold at a price. aberdeen.com
Online Offers services to individuals and Railway, restaurant,
Service business at large and generates airlines booking.
revenue. Examples: Tours and Online maintenance
travels, manpower recruiting and service. Online
maintenance services. examination.
Virtual Provides platform to meet people Linux Group New
Communities of common interests. Software Groups Application
user groups, professional groups Package User
like doctors, managers, user Groups Community
groups. Groups
E-Learning Provides contents. E-books, CDs, sifyelearning.com
lessons, conducts test and offers
certification.
The Internet and networks provide platform and various capabilities whereby
communication, collaboration, and conversion has become significantly
faster, transparent and cheaper. These technologies help to save time,
resource and enable faster decision-making. The technology adds speed
and intelligence in the business process improving quality of service to the
customer.
The business process of serving the customer to offer goods, products or
services is made up of the following components.
Enquiry processing
Order preparation
Order placement
Order confirmation
Order planning
Order scheduling
Order manufacturing
Order status monitoring
Order dispatching
Order billing
Order receivable accounting
Order payment processing
The entire process in parts or full can be handled through these
technologies and software solutions. It provides important strategic,
competitive advantage. Further, the technology is flexible and capable of
handling any business models such as:
Retailing, Trading, Auctioning
Manufacturing, Distribution & Selling
Outsourcing, Subcontracting
Servicing, Training, Learning, Consulting
The resultant effect is the reduction in cost of business operations, improved
customer loyalty and retention and better quality offer to the customer.
Four major applications mentioned earlier make this achievement possible.
We go into details of each one of them.
9.4 E-business
The scope of E-business is limited to executing core business process of
the organisation. These processes would have external interface like
suppliers, customers, contractors, consultants and so on. The core business
processes of the organisation are procurement, manufacturing, selling,
distribution, delivery and accounting. These core processes are best run by
application packages like Enterprise Resource Planning (ERP). If enterprise
definition is made wider including customer, suppliers and distributors,
application package like Supply Chain Management (SCM) is best suited for
planning and execution of entire business process.
In addition to these core processes, organisations use Internet enabled
systems and other technologies to handle these processes more effectively.
Transaction processing, workflow, work group and process control
applications are the backend support systems to main ERP / SCM
enterprise management systems.
For example, when a supplier sends goods, it is received in the warehouse.
This event is processed E-way using E-business systems suite. The receipt,
documents and packages are read by bar coding system. Then receipt
processing is done to confirm the validity of dispatch by the supplier,
confirmation of quality, acknowledging the receipt, updating the inventory,
communication of receipt to manufacturing, updating the purchase order,
effecting material accounts and supplier accounts, creating a liability in
payables and posting it into cash flow projections. You will observe that
9.5 E-commerce
E-commerce is a second big application next to ERP. It essentially deals
with buying and selling of goods. With the advent of internet and web
technology, E-commerce today covers an entire commercial scope online
including design and developing, marketing, selling, delivering, servicing,
and paying for goods. Some E-commerce applications add order tracking as
a feature for customer to know the delivery status of the order.
The entire model successfully works on web platform and uses Internet
technology. E-commerce process has two participants, namely buyer and
seller, like in traditional business model. And unique and typical to
E-commerce there is one more participant known as 'Merchant Server’.
Merchant server in E-commerce secures payment to seller by authorisation
and authentication of commercial transaction.
E-commerce process model can be viewed in four ways and categories:
B2C: Business Organisation to Customer
B2B: Business Organisation to Business
C2B: Customer to Business Organisation
C2C: Customer to Customer
In B2C model, business organisation uses websites or portals to offer
information about product, through multimedia clippings, catalogues,
product configuration guidelines, customer histories and so on. A new
customer interacts with the site and uses interactive order processing
system for order placement. On placement of order, secured payment
systems comes into operation to authorize and authenticate payment to
seller. The delivery system then takes over to execute the delivery to
customer.
In B2B model, buyer and seller are business organisations. They exchange
technical & commercial information through websites and portals. Then
model works on similar line like B2C. More advanced B2B model uses
Extranet and conducts business transactions based on the information
status displayed on the buyer’s application server. Auto component industry
uses this model for supplying parts and components to auto manufacturer
based on the inventory levels and production programme.
It should be noted that B2B business models actually run with the help of
B2C, C2B and C2C models. These models work under the umbrella of B2B.
The execution process using these models is assisted by portals, websites,
E-mail, web directories, Internet Service Providers (ISP). Each organisation
in E-business environment has its website and E-mail address and they are
linked from portals, which provide basic information. The portal is a website
dedicated to specified class of items where focus is on information about the
items and not so much on who makes it? They essentially are information
providers to users to transact through E-business models. Some portals
have scope of buying and selling besides information sharing. Search
engines like Yahoo, Alta Vista, and Lycos are higher-level portals, which
help you find web address of buyers and sellers for you to choose your
E-business partner.
In E-business models, we have considered two parties who engage in
business activity. But to perform these activities certain intermediaries are
required to handle the communication traffic between the two parties in B2B,
B2C, C2B and C2C. The intermediaries are:
E-business models are developed using these intermediaries. The
components of E-business models are:
• Internet / Extranet for internal communication
• Internet for external communication
• Network and TCP / IP protocols and tools for delivery mechanism
• Web server and web browsers software for access, process and
download and mailing.
• Back-end systems for application processes
The people involved in E-business model other than users of the models
are:
• Web master • Content provider
• Web designer • Content designer
• Web developer / programmer • Web administrator
Web master controls the website inflow/outflow, content management and
regulation of the traffic. The role is similar to DBA in RDBMS environment.
Web designer conceptualizes and visualizes the requirement of the parties
and creates a web design, which is attractive, useful and easy to handle. He
9.6 E-communication
In E-business world, E-communication system is a backbone of all
processes whose role is to share information by messages or store
information to download on access by the customer. This is done through
many applications and systems. Most popular and widely used messaging
systems are e-mail & voice-mail. Through these systems both parties
communicate on ongoing basis. It provides facilities to store delete and
search mails supporting the reference need of the user. This system is
popular when one to one communication is needed.
When there is a need for communication in real time, systems available are
voice conferencing, Video conferencing and electronic meeting. Voice
conferencing is conducted on telephone network using speaker phones or
networked PCs with Internet telephone connectivity. Video conferencing
provides capabilities of video and audio for participants situated at different
locations. Video conferencing also becomes an interacting and effective
communication system when it has a feature of white boarding and
document sharing. In electronic meeting system, participants sit in a
meeting room with networked PCs and online screen projector to discuss
the meeting agenda. PC network is chosen for communication, and access
databases and processing and projecting on the screen for common
viewing. This system is useful to solve some problems, and communication
within small groups.
9.7 E-Collaboration
Every business has a number of work scenarios where group of people
work together to complete the tasks and to achieve a common objective.
The groups could be teams or virtual teams with different member strength.
They come together to perform a task to achieve some results. The process
is called collaboration. The collaboration now is possible with
e-technologies, which put these teams in network with Internet support for
communication, access to different databases and servers. These
capabilities help to create collaborative work systems and allow members to
work together cooperatively on projects and assignments. The biggest
advantage of E-collaboration is that it taps the collective wisdom, knowledge
and experience of the members. The collaboration team or group could be
within the organisation and between the organisations as well.
Since, E-collaboration works on an Internet platform and uses web
technology, work group / team need not be at one physical location. They
can be at different locations and form a virtual team to work on project or
assignment.
E-collaboration uses E-communication capabilities to perform collaborative
tasks, or project assignment. Its effectiveness is increased by software
'GroupWare' that enables the members of the group to share information,
invoke an application and work together to create documents and share
them and so on. GroupWare is collaboration software.
E-collaboration helps work effectively on applications like calendaring and
scheduling tasks, event, project management, workflow applications, work
group applications, document creation and sharing, and knowledge
management.
E-collaboration system components are Internet, Intranet, Extranet and
LAN, WAN networks for communication through GroupWare tools,
browsers. Application packages are software suit, which help process
customer requirements. It is supported by databases present on various
servers like mail server, material database, knowledge server, document
server and so on.
Let us illustrate these two models using an event in the business such as
receipt of material for a job to be processed on the shop floor. In this event
there is a transaction receipt of material, which needs to be processed, and
then a workgroup will use this information of material receipt. Each member
of this workgroup has a different goal.
In workflow application, different members with a single goal of processing
receipt of material for inventory, process transaction in its logical serial
order. While in work group application, the members have different
13. Most popular and widely used messaging system are _____________
14. When there is a need for communication in real time, systems
available are ___________, _____________ and ________________
15. ________________provides capabilities of video and audio for
participants situated at different locations.
9.8 Summary
In E-business enterprise, traditional people organisation based on
'Command Control' principle is strengthened.
E-business enterprise is more a process driven, technology enabled and
uses its own information and knowledge to perform.
Customer satisfaction and high level customer service is possible using
knowledge-based proactive management systems.
In E-enterprise, business is conducted manually.
MIS for E-business is the same as the conventional MIS design of an
organisation.
E-business systems use client / server architecture and run on Internet
platform.
Inter organisation communication applications, like news bulletin,
communicating change of rules, announcements, price revisions, etc.
are very common in B2C.
In C2B model, a customer interacts with information databases such as
product catalogues, price information, configures the product, compares
the cost, places the order and have it delivered after the electronic
payment process.
B2B business models actually run with the help of B2C, C2B and C2C
models.
Web master controls the website inflow/outflow, content management
and regulation of the traffic.
The job is to keep the website very responsive and keep contents latest
and up-to-date.
The look and feel of E-commerce website should be customer-friendly
and attractive.
The concept of a work group is that a set of information has a multiple
use and the concerned users draw this information to perform their role.
All four applications: E-business, E-commerce, E-communication and
E-collaboration run Internet, Intranet, Extranet and other networks and
use web technology extensively. You must be able to describe the
different electronic system of organisation of business.
Activity 1