Electronic Business

Electronic business is an ever-changing field. Things can get obsolete before you know it. One good way of handling the rapid change is building a good knowledge base of the basics.

Where did it all come from?

It may seem strange for the first time reader,but like many other relevant technologies of the day (e.g.: Global Positioning Systems) The Internet has its roots in the US Department of Defense. The initial idea seems to be building a network which would work even if one or more servers were annihilated in an enemy attack. Along with the military objectives, there were other potential benefits namely, information sharing, electronic transactions, efficient collaboration and community building (e.g.: Bulletin Board System). These potential benefits and uses made the tiny ARPANET evolve into the internet as we know today.

Pillars and principles

The two major pillars which support an e-business infrastructure are as follows:

• Legal Standards: These include legal licensing documents (End user licenses etc.) and other related legal documents like Privacy policies. These are important in an e-business environment so that any misuse of the digital infrastructure can be dealt with legally.
• Technical standards: These documents are essential to standardize protocols and other basic technologies so that multiple manufacturers and businesses can manufacture devices and systems based on the particular technology. As a result the consumer has a choice of vendors to choose from. Technical standards also ensure compatibility across the network.

Brick and mortar v/s e-business

Traditional brick and mortar business were basically product centric. Companies competed on their products and the consumer was largely sidelined. This approach resulted in a slow product evolution cycle. Apart from isolating the customer from the product development, other serious drawbacks in the brick and mortar style of business included poor scaling of the business. The business will typically be confined to a geographic location and expanding required huge investments. Electronic business overcomes all these problems. E-business has a customer centric approach and the customer is a part of the product development cycle. Customer interaction and product feedback allow the product to be refined in a much shorter time span.

Unlike Brick and mortar businesses, information is vital for e-business. Along with information, systems capable of storing, processing and retrieving the information are also crucial to the success of e-business.

What infrastructure do I need?

For an e-business to be successfully built on the principles stated above, One needs infrastructure which can fulfill the needs of capturing, processing and storing data. This infrastructure must have the following attributes.

The infrastructure should be:

• Centralized
• Scalable
• Platform independent
• Localized (to allow a global implementation)
• Updated and synchronized
• Available (to all employees who may need the information)
• Integrated

Models of e-business

Models of e-business can be basically classified into three categories.

• B2B - The Business to Business model of e-commerce deal with companies transacting with other companies and institutions. Many companies provide software as a service to other companies. These would be grouped in the B2B model. This model is usually implemented in the service sector.

• B2C - The Business to consumer model deals with companies transacting with individuals. This is a common model wherein the company advertises its products or services through an electronic media such as the internet. The customer visits the media front end (usually a browser) and buys products using online payment methods. In a B2C model the company takes the responsibility of the quality of the product, the safety of the online transaction and the shipping operation. Examples of sites operating on this model are Think geek, Amazon and Air Deccan.

• C2C - The consumer to consumer model deals with consumers transacting with other consumers. The enterprise (e-business) here acts as an intermediary and facilitates transactions between consumers. In a B2C model the company usually does not guarantee the quality and the shipping time of the product. The C2C company has to have good content management systems to handle the large amount of products displayed and the relatively large amount of transactions. examples of businesses following the C2C model are eBay, Craigslist, Orkut.