E-Commerce and Business Process
The current business world has gone through a thorough transformation that has embraced the utilization of technology and technological devices in coming up with strategies and methods of doing business that have made it easier to carry out business transactions. These strategies and methods have embraced tools such as the internet, the phone, fax machines and other technological devices that are meant to ease the whole process of transactions thus minimizing the time and resources spend in carrying out these transactions, increasing revenues/proceeds and widening the market base of any particular business or organisation that is involved. In other words, there is a reduced amount of paperwork.
This has come to be termed as e-commerce in the current world. As it shall be seen in this paper, e-commerce has had a huge impact on the overall business processes and is currently being embraced by different businesses and organisations as a strategy of approaching different markets.E-Commerce and the business processE-commerce can be defined as the act of selling and buying of goods and services of different kinds over the internet. According to Goel 2007 (p.1), e-commerce is a contemporary methodology of doing business that is able to deal with the requirements of merchants, organisations and consumers of reducing costs while enhancing the quality of products and services and raising the speed at which services are delivered by utilizing the internet services.
Goel continues to argue that e-commerce is totally different from the traditional electronic commerce as it is able to provide an opportunity for buying and selling of goods and services to take place over the internet. In this regard, there is also the changing of money from one person to another over the internet and it has eliminated the need for physical currency for any transaction to take place. Instead, every transaction is done from one computer to another with the internet connection between these two computers as the linking channels. There are various factors that are involved that enable transactions to be completed and thus enable a smooth flow of e-commerce. These include the internal changes that need to be done to a particular business or organisation and the external environment of this organisation.Internal changesThe internal environment of businesses or organisations that are engaged in e-commerce trading requires different changes to be made to it to support the new way of transacting.
It must be realized that without these changes, such the older systems are unable to support the current form of business and as a result, this has been found to lead to strain on the overall business environment leading to ineffectiveness. One of the changes that need to be done on the internal environment is the assignment of specific tasks to specific employees while leaving other tasks to be done automatically by the machines under strict supervision by the business or organisation. This not only requires a redesigning of the business structure but also a thorough training among the employees of the business in order for them to be able to handle the challenges that emerge as a result of using technology and the fast and ever changing business environment. On the other hand, a particular business that has adopted e-commerce as a mode of doing business must work on its structure on different ways of avoiding risks such as fraud since while the internet is able to transform the business, it also exposes the business to different kinds of risks that need to be avoided (Goel 2007).Competitive environmentOn the other hand, businesses that engage in e-commerce have a challenge of dealing with different forms of competition that emerges from different business.
This is as a result of the wider market that this form of doing business offers to its clients while at the same time widening the base of competitors to this business. For example, while company A may be a supplier of particular products at region B, e-commerce has a potential of creating a new markets, C and D. These additional markets have original suppliers of these products. As a result, this company has to devise a strategy not only of ensuring that its products are accepted in this market but also are able to compete well with products from the original companies. As a result, a business has a mandate of working out on different ways that would need to be implemented to deal with this competition.
One of these ways is changing the way such a business deals with fellow businesses and with customers. This requires that business to business, B2B and business to customer, B2C models are developed to deal with fellow businesses on the market while at the same time ensuring that customers are satisfied on the market.The Internet as an information systemOne of the most important strategies on the market includes the acquisition and use of information on the market by any business or organisation. This information can be used to transform the business internally or align it to face the external challenges. There are different ways that were used in the past to obtain such information. This included the use of market surveys and research.
However, these methods of gathering information proved to be very expensive and therefore derailed the business activities of a particular business or organisation. As a result of this, new ways had to be developed. The advent of the internet has therefore proved to be a very important source of information for businesses and organisations that are currently in the market (Jansen-Vullers, Netjes & Reijers 2004, p.382-387). Sharing of information, i.e.
both sending and receiving in organisation has been made easier by the fact that the link among businesses and among businesses and employers has been enhanced in the sense that there is sufficient and timely information that is readily available to these businesses to be used for the purposes of enhancing the trading transactions.Benefits, risks and limitations of e-commerce to organisationsDespite the fact that e-commerce has been able to transform the business environment, there are benefits, risks and failures that have been found to accompany this form of doing business. Most of these factors have risen from the fact that the internet has advantages and disadvantages, a factor that has resulted in benefits on one side and failures and risks on the other side. In this regard, it is vital for any business or organisation whose structure is based on e-commerce as a mode of doing business to realise these challenges in order to be in a position to deal with them whenever they arise while in some cases being able to avoid them.E-commerce benefitsThere main aim of any business on the market is to maximise profits and lower costs that are involved in any business transaction while at the same time being able to reach its customers with a lot of ease. E-commerce has a lot of benefits therefore that can be reaped by businesses.
To begin with, it is in every business’ strategy to reach out to its customers with ease and speed in terms of product and service provision. E-commerce has been found to offer a unique opportunity whereby businesses are able to reach their customer on time, and in a very cheap way. For example, e-commerce has been found to eliminate the barriers that arise because of distance and time. Similarly, the cost of sales is greatly reduced under e-commerce as compared to the traditional form of selling. For example, while in the past sales people had to travel right to the customer, the current form of doing business no longer requires them to do this. Instead, these businesses are only required to provide information about the products and services and modes of payment such as VISA and MasterCard and this is enough for them to be bought (Goel 2007).
E-commerce risksWhile transacting over the internet is easier and far much more efficient as compared to the traditional methods of trading, there are also risks that are involved. One of the major risks that have to be dealt with by businesses if they are to continue operating and earn the trust of their clients is fraud. Internet fraud has continued to prosper as every day as e-commerce continues to develop. As a result, it is the mandate of the business to develop a fraud-proof system that would guarantee that neither the business nor its clients are defrauded by internet crooks. This calls for protection of business information that may violate its property rights and customer information that may violate their privacy. On the other hand, there are other forms of risks such as system failures that may ground the activities of a particular business.
This may occur in case of a virus attack or hacking i.e. deliberate attack on the system with an intention of stealing certain information or grounding the system. Therefore, while it is important to develop a virus-proof system, there is also the need for a business to integrate into its strategy a backup system that would guarantee that transaction activities continue even if there are system failures due to hacking or attack (Goel 2007). E-commerce failuresThere are various forms of e-commerce failures that may arise during the process of trading.
One of the failures of e-commerce is the failure by the business to track customer orders. This has been found to occur in cases whereby there are large orders that are placed by the customers while the information system of the business can only support up to a particular number of orders at a particular time or there is manpower failures whereby the business is unable to utilise different skills and knowledge that is needed in tracking down these orders. Similarly, as a business, failing to develop a clear and efficient delivery system is a failed strategy to business approach in regard to e-commerce. This is whereby the delivery of goods and services to customers fails completely or delays for a longer period of time than the way it is expected by the customer, resulting in longer waiting period before one is served by the business (Goel 2007, p.10).E-commerce business modelsThere are therefore different e-commerce models that have been developed to deal with various challenges that arise on the e-market.
One of the models that have been identified is the business to customer model, B2C. This is whereby a particular business that uses the online services in its activities targets a unique customer rather than targeting a general customer in its approach. Such a model requires that the business is able to develop consumers trust by being efficient and honouring every transaction that it enters in with the customer. Another model that has been found to exist in this case is the business to business model. This is whereby particular forms of businesses agree to enter into business agreement for a mutual benefit of both.
For example, a bank that is launching a branch in Arizona may enter into a business contract to be supplied with computers by HP over a period of five years together with their servicing. This form of a model has been found to provide a wider base of benefits from the transactions that are involved. These models act as an interface between businesses and their intended market (Mahadevan 2000, p.1-5).Business challenges in e-commerceThere are different business challenges that are faced on a daily basis by business in the e-commerce.
One of these challenges is price determination. This arises from the fact that there are familiar goods that are available to customers from different parts of the world offering different prices. In such a case, a business has to be careful with the prices its assigns to its goods. Similarly, there is also the problem of the goods to offer on the market. This is particularly so in cases of substitute goods.
For example, a business may find it a challenge to offer tea on the market where coffee is preferred (Goel 2007).Strategies for internet technology in organisationsThere are different strategies for internet technology that can be utilised in organisations. One of these strategies is the recruitment of competent and knowledgeable employees. Internet technology provides an opportunity for organisations to such for the best employees that would form a perfect team for their work processes. This can be achieved when an effective online recruitment process is put in place. On the other hand, while employees may be competent in their area of expertise, they need an effective management system.
Therefore, it is important for businesses to come to an understanding that while technology may eliminate face to face form of management, there is still the need for a business to develop a management system that will follow up on the performance of the employees and provide motivation in their work.It can therefore be concluded that the internet has brought an important revolution in the world of business. This can be seen in the way the market base of different businesses and organisations has been widened while the service delivery process has been enhanced. However, it is also important to understand that there are different challenges that these businesses face on a daily basis as they transact in an e-commerce mode. First, there are challenges that have to be dealt with such as internet fraud, system failures, and failure by the business handle customer order.
This therefore calls for an adoption of a business model that is not only secure to both the customer and the business but also efficient in terms of product and service delivery.