Electronic Commerce
Meaning
Electronic Commerce (e-Commerce) is a general concept covering any form of business transaction or information exchange using information and communication technologies(ICTs). E –Commerce takes place between companies,between companies and their customers or between companies and public administrations.Electronic Commerce includes electronic trading of goods,services and electronic material.
The e-commerce include:
- Electronic trading of physical goods and of intangibles such as information.
- All the steps involved in trade,such as on-line marketing,ordering payment and support for delivery.
- The electronic provision of services such as after sales support or on-line legal advice.
- Electronic support for collaboration between companies such as collaborative on-line design and engineering or virtual business consultancy teams.
Definition
E-commerce as “… the sharing of business information, maintaining business relationships, and the conducting business transactions by means of telecommunications networks”
-By Zwass
THE BENEFITS OF E-COMMERCE
The benefits of e-commerce can be seen to affect three major stakeholders:
- Organisations,
- Consumers and
- Society.
Benefits of e-commerce to organizations
- Electronic commerce expands the market place to national and international market with minimal capital outlay, a company can easily and quickly locate more customers, the best suppliers, and the most suitable business partners worldwide. By becoming e-commerce enabled, businesses now have access to people all around the world. In effect all e-commerce businesses have become virtual multinational corporations.
- The cost of creating, processing, distributing, storing and retrieving paper-based information has decreased. For example, by introducing an electronic procurement system, companies can cut the purchasing administrative costs by as much as 85 percent.
- E-commerce has revolutionised the way consumers buy good and services. The pull-type processing allows for products and 12Introduction services to be customised to the customer’s requirements. In the past when Ford first started making motor cars, customers could have any colour so long as it was black. Now customers can configure a car according to their specifications within minutes on-line via the www.ford.com website.
- Electronic commerce allows reduced inventories and overhead by facilitating “pull” type supply chain management. In a pull-type system the process starts from customer orders and uses just-in-time manufacturing.
- The pull-type processing enables expensive customization of products and services which provides competitive advantage to its implementers. 21
- Electronic commerce reduces the time between the outlay of capital and the receipt of products and services.
- Electronic commerce initiates business processes re-engineering projects By changing processes, productivity of salespeople, knowledge workers, and administrators can increase by 100 percent or more.
- Lower telecommunications cost. The Internet is much cheaper than value added networks (VANs) which were based on leasing telephone lines for the sole use of the organisation and its authorised partners. It is also cheaper to send a fax or e-mail via the Internet than direct dialing.