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Meaning & Definitions:-

Electronic business, commonly referred to as "e-business", or an internet

business, may be defined as the application of information and communication
technologies in support of all the activities of business.
E-business may be defined as the conduct of industry, trade, and commerce using
the computer networks.
The term "e-business" was coined by IBM's marketing and Internet teams in 1996.
Electronic business methods enable companies to link their internal and external data
processing systems more efficiently and flexibly, to work more closely with suppliers
and partners, and to better satisfy the needs and expectations of their customers.
The internet is a public through way. Firms use more private and hence more secure
networks for more effective and efficient management of their internal functions.
In practice, e-business is more than just e-commerce. While e-business refers to more
strategic focus with an emphasis on the functions that occur using electronic
capabilities, e-commerce is a subset of an overall e-business strategy. E-commerce
seeks to add revenue streams using the World Wide Web or the Internet to build and
enhance relationships with clients and partners and to improve efficiency using
the Empty Vessel strategy. Often, e-commerce involves the application of knowledge
management systems.
E-Commerce refers to buying and selling of products and services by business and
consumer through an electronic medium, without using any paper documents. E-
commerce is widely considered the buying and selling of products over the internet,
but any transaction that is completed solely through electronic measures can be
considered e-commerce.
E-commerce is subdivided into three categories: business to business or B2B
(Cisco), business to consumer or B2C (Amazon), and consumer to consumer or C2C
(eBay). also called electronic commerce.

The Cu rre nt St at e o f E- Bus ine ss

One of the hard parts of any discussion of E-Business is coming to grips with what is
being discussed. There are several definitions of E-Business. There are different versions of
the history. There are different conceptual tools that might be used to understand it. Before
turning to the pragmatics of assessing the state of E-Business, lets begin by taking a look at
three questions:
1. What do we mean by E-Business?
2. How do we trace the history?
3. What are the conceptual perspectives which help to define the state?
What do we mean by E-Business?
Two terms are used when we talk about this topicelectronic commerce or e-commerce
and increasingly e-business. Either of these terms provides a legitimate starting point. For
this paper, e-business has been chosen as the better term. To understand why, we can
begin with a look at the term e-commerce.
The dictionary defines commerce as:
1: social intercourse: interchange of ideas, opinions, and sentiments 2: the exchange
or buying and selling of commodities on a large scale involving transportation from
place to place.
As expected one definition of commerce has to do with the the exchange or buying and
selling of commodities of goods. However, the primary definition has to do with social
intercourse; the interchange of ideas. Interestingly, post-industrial societies are increasingly
involved in the exchange, buying, and selling of information and ideas bringing these two
definitions together. In line with these definitions, electronic commerce or e-commerce is
the electronic exchange of information and the support for the exchange of other
commodities. Some of the e-commerce companies talked about frequentlyebay, etrade,
etc.are engaged in the exchange of information. If we accept that ebay as an auction
house is only involved in the buy and sell decisions, not the exchange of the physical
entities, it is a good example of pure e-commerce. Another prime example would be
etrade. However, for most businesses, some portion of the exchange is physical. Thus, has a significant commitment to physical storage and shipping, as well as to
managing returns. may be viewed as equally divided between e-commerce
(the order) and p-commerce (the delivery). There is every reason to believe that more and
more pure e-commerce businesses will blossom in the coming years. However, this is only a
part of the story.
Forms of Ebusiness
In contrast to the term e-commerce, the term electronic business or e-business focuses
on the nature of the business. An e-business may or may not be involved in e-
commerce. The notion here would be that the business itself, the organization, is heavily
invested in the electronic realm. An e-business is an enterprise working via electronic
means. Any number of facets of a business might be carried forth electronically. Consider
as simple examples the following business activities that might be carried forth in electronic
recruiting of new employees
marketing, advertising and public relations
customer support and education
meetings and information resource sharing among employees
training of employees
intelligence gathering for strategic and tactical planning
distributed inventory control functions
payroll and benefits management
It is relatively easy to imagine how any of these activities, if appropriate to a particular
business intent, might benefit from instantiation in an electronic form. They will all have an
impact on the bottom line of the business. Note that none of the activities listed involves
the direct buying and/or selling of materials. There are three points here:
1. An e-business may of course be engaged in pure e-commerce. The
focus on e-business is not meant to suggest that e-commerce is
excluded. Indeed it is likely that e-businesses will be engaged in e-
commerce and that e-commerce companies will have a string commitment
to being e-businesses.
2. Not all aspects of a business can, should, or will be electronic. The point
is simply to suggest that a traditional business can be made more efficient
by engaging some of its activities electronically.
3. Some of the most profitable and rapidly growing aspects of e-business
are those that involve the streamlining of back office processes to adopt a
more efficient electronic form. Specifically, business to business
transactions that enhance supply-chain management, just in time
inventory control, and accounts payable and receivable are among the
first targets of opportunity for smart business people.
In this context, this paper chooses to focus on e-business. E-business is concerned with
the growth and development of new and existing businesses in the direction of more
electronically mediated enterprises.
Understanding E-business
In order to understand e-business it is useful to have a conceptual framework. This
includes understanding the roots, driving forces, and shaping forces behind the
How do we trace the history?
In order to understand the state, we need to understand whats changing. Over the last
50 years, computers have been working their way into our lives, both directly and
indirectly. There are three developments in computing that are of paramount
importance. The first is the decision in the 1970s by the Defense Advanced Projects
Research Agency to provide funding to connect military research projects across the
country. This DARPAnet effort grew with time into the interneta system for address and
messaging between machines. This led with time to an increasingly seamless computing
environment that can connect every computer and computer enhanced device on the
planet. The second key event was a decision by Peter McCullogh of Xerox to fund research
at a new research center in Palo Alto whose goal was discovery of the information
architecture of the office. This effort led to the object oriented windows, icons, mouse, and
pointer based systems we use today. In the process, they also gave birth to object oriented
design and programming languages, the Ethernet, the laser printer, the bitmapped screen,
WYSIWYG editing, etc. etc. etc. The third key development was the decision by IBM to enter
into the personal computer market and to do so in such a way as to open the standards for
their machine to replication by third parties. This decision ultimately led to a commodity
based market for chips and computing systems that became so affordable as to populate
our environment at a density far greater than the human population. It became possible for
individuals to own one or more generalized computing devices and dozens, if not hundreds
of specialized computing devices.
All the while these changes were taking place, the general population was becoming
acclimated to the digitally enhanced world. The most dramatic forms of this accommodation
were those that reached out to the masses. Paramount among these systems were the
Automatic Teller Machines. It took a decade, but they eventually won over most of the
population to digital processing of data. Point of sale electronic funds transfers of all types
also contributed to this transition. At varying levels we all became comfortable with
inventory tracking in the supermarkets as these most efficient early adopters began to track
first what went through their stores, and then with coupons printed at the register in
response to the items to target marketing, and finally, with ID cards they familiarized us with
customer tracking and profiling. The directory assistance phone systems familiarized us
with automatic processing of voice and digital phone response systems familiarized us with
tree based triage of customer needs. Finally, email began to reach out beyond the office
workplace to friends and familyinitially at other institutions that had email and lastly to
home accounts.
Organizationally, workers saw printouts of masses of data maintained in computer
systems. They became intimately familiar with desktop word processing and
spreadsheets. They came to understand the values and limitations of electronic mail and
voice mail. They came to see some electronic calendaring. Most of all, it way clear that pay
checks, benefit packages, budget control, and other pieces of the core of business were
being handled by computers and these computers first split and appeared on their desktops
and then reunited and coalesced into local area networks. After a period of time, those local
area networks coalesced into internetworks and ultimately those internetworks all merged
giving us the internetwork with the capital Ithe Internet.
These changes were not rapid, and they were not simple. After years of slow growth and
development, the World Wide Web was opened on a connected base(DARPA) of affordable
computers(IBM) that most humans had accepted as trustworthy(Supermarkets and Banks)
and which most of them could learn to use(XEROX). Given this environment, the very simple
innovation called the world wide web caught on like wild fire. (I put innovation in quotes
because the basic concepts of the weba client server protocol, a hypertext form of
organization, and a structured document format for data interchange were 25, 40, and 10
years old respectively at the time they were put forward.) This is not to diminish in any way
the import of what Tim Berners-Lee did at CERN. As is the case in all revolutionary
technologies, both the environment for the technology innovation, and the development of
the technology itself are always found to have a longer and deeper history than the critical
event that caused the revolution. Now we are at the millennium. E-business is here and will
play a role in the coming decades reshaping how we do business. How do we get a handle
on what is going on?
Important concepts in E-Business
In any field as rapidly evolving as e-business, it is difficult to understand the myriad
announcements and developments that occur every day. Concepts that transcend the
particulars are important tools in understanding what is going on. Three concepts/principles
have proven useful to me in thinking about this topic. They include:
1. The migration of atoms to bits
2. Markets
3. The fourth wave
Each of these is discussed briefly below. While I have addressed these in a particular
order, which has to do with their general importance, any particular concept can become the
most important given the focus of the discussion.
Atoms to Bits
This is one of Nicholas Negropontes messages in his wonderful little book Being
Digital. It echoes ideas put forward a decade earlier by Robert Lucky in Silicon
Dreams. While Lucky articulated the engineers vision, Negroponte articulated the
organizational or economic impact. Basically, the message is the followingif your business
product is really information (bits) and it is being exchanged physically (atoms) rather than
electronically, you will need to migrate to the bit form of exchange because the relative
costs of the transactions dramatically favor electronic exchange. This principle causes us to
examine our business carefully to determine if we are indeed using the most appropriate
form of exchange. The cost of a bank transaction over the counter is about $10.00, while
the cost of an ATM transaction is about $1.00. In contrast, the cost of a PC based funds
transfer is on the order of $.10. The economics of bits over atoms compel banks and other
engaged in bit businesses to move from atoms to bits. Publishers of text, music, and video
are soon to follow.
Adam Smith proposes a theory of economics that suggests that optimal trading takes
place when the buyer and seller have perfect knowledge of the market. The size of the
market is limited by our ability to obtain knowledge about the market using the available
technology. From the bazaars of the mideast to the seaport marketplaces of Amsterdam to
the commodities trading floors, markets have expanded to the limits available. All of these
markets were limited by space until the last fifty years. Today, it is truly possible to imagine
a worldwide marketplace where it is possible for the buyer and seller do develop very
sophisticated knowledge about their counterpart. The internet has created a globally sized
market where the players have an unprecedented opportunity to gain perfect knowledge of
the vast market. The World Wide Web has made it possible for each consumer, sans
intermediaries, to access the sellers in the market place directly. If a business has been
constrained by its ability to present itself directly in the market place, there will be growing
opportunities to by pass intermediaries and sell directly to the end consumer.
The Fourth Wave
Alvin Toffler postulated a theory in Future Shock and The Third Wave that outlined
three massive culture shocks or waves of change. The first was the transition from hunter
gatherer society to an agricultural society where food was cultivated and controlled by
human endeavor. The second wave occurred with the development of industrial society and
the mass production of commodities. The third wave was the technological wave where the
computer allowed new levels of customization and individualization in the production of
materials. Some would suggest that we can distinguish a fourth wave in a network centric
view of computing that is significantly different from the third wave. If there is indeed a
fourth wave, it will most likely be distinguished by the full integration of the supply
chain. The new model of manufacturing and production ties the consumer intimately into
the whole manufacturing process. Not only are products produced to customer
specification, but the customer plays a role in defining the product. This flop in control of
the business process will have a dramatic impact. It will transform the organization in the
sense that marketing disappears and requirements analysis becomes critical. Instead of
selling the cars produced by the automaker, the automaker will make the cars buyers
want. Instead of promoting the courses a university offers, the university will offer the
courses students want.
When combined with process reengineering concepts, the fourth wave suggests that
businesses will need to understand their core business and competency and build processes
that are responsive. For example, it may be the case that a university professional school
will define its core competency as producing workers for a given industry. In this case,
understanding who the customer is will suggest that corporations should play a more direct
role in defining the product. In this environment, just as in more accepted supply chain
models for commodities, the supplier will be assured consumption of product so long as the
product produced conforms to the specifications of the consumer. In this case, a consortium
of employers might guarantee to consume the graduates of an institution. This means that
students would be attracted to an institution because they have an assurance of
employment if the meet the core competencies offered in the curriculum. Just as with other
supply chain situations, this does not mean that the supplier, the university, is simply
following the mandates of the business consumer. It is up to the supplier to provide the best
information they can provide to the consumer about how they can best meet the consumers
need. Thus, the consumer engages in a dialog with the vendor about the product that is to
be produced.
Shaping Forces for e-business
Beyond the driving forces described above, there are five more forces beginning to
emerge that will shape the ultimate form of e-business. They include
4. Beyond calculation
5. The information process
6. Reengineering
7. Computing on the periphery
8. Ubiquitous computing

Beyond Calculation
The fiftieth anniversary of computing was celebrated in 1998. The Association for
Computing Machinery published a selection of essays focused on the next fifty years. The
title of the book is a nice double entendre. It suggests that it is beyond our ability to predict
where the next fifty years will take us. It also suggests, as do many of the authors, that the
future will be more about the computer as communication device than as calculation
device. While we will continue to use the computer to relieve us of all the computational
tedium it does so well, increasingly, the computer will be used as a communication device
both synchronously and asynchronously. From web browsing to weather reports to driving
instructions, the computer is going to establish a major role as a communications device.
Automation and Information
Shoshanna Zuboff, in her book in The Age of the Smart Machine, suggests that the
computer is doing for intellectual processes what the steam engine and other power
technologies did for manual processes. Power equipment allows us to automate work
processes and the formalization of the work process is called automation. She suggests that
the application of the computer, with its memory and logic allows us to formalize knowledge
work. Using a parallel to automation, she calls the process information and suggests that
the formalization process might be called informating. E-business is characterized by
informated processes. Wherever possible, work processes should be examined to determine
if a process can be made better, faster, more efficient by the use of computer technology. In
this process, innovators need to be careful not to overspecialize processes as so often
happened with the application of power technology. Information technology has the power
to integrate work activities returning control of whole processes to individuals. For example,
it becomes possible to provide a loan officer with the tools that enable a loan to be approved
by a single individual using a computer to perform the specialized subtasks. Thus what has
become a disconnected set of subprocesses in many banks, leaving the person applying for
a loan with a sense of alienation, can once again be integrated and streamlined.
Reengineering Processes
Through the early 1990s, there was much attention paid to business process
reengineering. Hammer and Champy in their book Reengineering the Corporation: A
Manifesto for Business Revolution promoted the streamlining of business operations. One
way of looking at reengineering from a technical point of view is to see it as adopting
practices that are made possible by the deployment of information technology. In this
sense, reengineering provides the business principles that guide what Zuboff called
information. At the core of Hammer and Champys approach to process reengineering are
several principles. These include:
replacing assembly line type jobs with case work type jobs
moving decision making down the chain of command
converting management positions from authority control to coaching and
triage of cases into a range of cases characterized by simplicity/complexity
reduction of the number of non value added checks and controls
Computing on the periphery
One of the difficulties created by reengineering is a reduction in the richness of the
environment within which people work. Knowledge management has emerged as an effort
to overcome the weakness of a pure reengineering approach. At the same time, computer
scientists have been engaged in the development of new kinds of software that are focused
on capturing the rich fabric of interaction that takes place in the normal work
environment. We will increasingly interact with the computer on the periphery of our
focus. Rather than demanding our attention, the computer will communicate with us on the
periphery of our awareness. We will sense how the stock market is doing, how are
colleagues are feeling, what the traffic patterns are. It will take some time to develop this
new sensibility.
Ubiquitous computing
The late Mark Weisser and others proposed that the next generation of computing would
be defined by ubiquitous computing. In the coming years, devices that are connected to the
network and that have an intelligent control component will constitute a kind of invisible
computing fabric around us. These devices will have data acquisition mechanisms and
narrowly scoped intelligence that will allow them to work with us. The key to the next
generation device is that they will be special purpose, not general purpose, and they will for
the most part have invisible interfaces. The car is talked about as one of these
devices. Todays car already has a significant amount of computational power. Connected
to the internet it will be able to deliver information about traffic, lodging, restaurants,
etc. Refrigerators will have bar code readers and communications capability to order
needed goods. Thermostats will sense human usage patterns making adjusting the
thermostat or setting it unnecessary. E-business will be busy over the coming decades
finding ways to package and sell this just in time information to consumers who will be on
the move.
What are the various approaches to E-business?
At a basic level a business may be understood in terms of two goals:
reduce the costs in producing the product so as to increase the profit from
selling the product or service.
increase the number of products sold, increasing the gross profits.
The basic question faced in the development of e-business is how the electronic
infrastructure that exists can be used to achieve these two goals. It is likely that one or
more of the following may be true:
1. the internet provides an information and communications tools that
makes it possible to order the goods and services needed by the business
so as to reduce excess inventory, insure smooth processes by assuring
needed stock, and reducing the transaction costs for materials acquisition.
2. the internet provides a new channel through which my products may be
marketed. This marketing will either open a new market, allow me to
retain an existing market, or improve my relationship with the existing
3. the internet provides an opportunity to restructure my organization in
such a way as to reduce the processing costs that support my business.
4. the internet and the information stores in my organization that have
grown historically or that can be developed as a result of 1,2, or 3 above
provide an opportunity to develop a new or auxiliary product or service .
E-Business activities can be described any number of ways, but it would seem to make
sense to discuss them in three broad categories: activities that pertain to the internal
management of an organization, those that pertain to inter organizational activities
wholesale kinds of functions, and activities that pertain to transactions with consumers. At a
conceptual level, each of these categories may be further subdivided as follows:
organizational activities
information sharing
decision support
business to business activities
acquisition and disposition of product
inventory controls
supply chain management
business to consumer activities
information sharing
customer service
This presentation of possible impacts places internal communications first and consumer
oriented e-commerce last and organizational restructuring first. The reason for this is
simple. While consumer based e-commerce has garnered a lot of attention in the last year,
it is only one of the three primary aspects of e-business. As many e-commerce start-ups
have found, positioning a business on the internet without a sound business operation
behind it can lead to a disaster of unfulfilled customer expectations. Additionally, the
resurgence of the American economy over the last few years is more closely associated with
the reengineering of the American corporation over the last decade. The streamlining and
restructuring of business in line with the opportunities provided by computer and
communications technology is less glamorous than e-commerce, but more profitable from a
bottom line business perspective. Closely associated with restructuring of business to be
more e-business oriented in the development of business to business commerce over the
electronic pathways. The most dramatic growth in e-business over the next several years is
projected to be in the area of business to business commerce. Thus, while consumer based
e-commerce will grow to be a huge market, it will be the last of these three to have a big
impact. Let me say a word about each of these three areas.
Organizational activities
Consider as simple examples the following E-Business applications that might be carried
out in an organizational context. Many of these are what we frequently refer to as intranet
type functions:
recruiting of new employees
marketing, advertising and public relations
customer support and education
meetings and information resource sharing among employees
training of employees
intelligence gathering for strategic and tactical planning
distributed inventory control functions
payroll and benefits management
It is relatively easy to imagine how any of these areas, if appropriate to a particular
business intent, might benefit from presentation in an electronic form. They will all have an
impact on the ability of a company to do E-Commerce, but none of them involves the direct
buying and/or selling of materials.
Business to Business Commerce
While the previous section has addressed the internal functioning of an organization
making use of the information infrastructure, this section address basic materials control for
the organizationthe interface to the rest of the corporate world. We exclude from this
process only those activities that relate to final disposition of products to end users. The
functions we focus on here include
Inventory Control
Customer Service
Business to Consumer Commerce
Business to consumer commerce has received a lot of attention recently. Generally
speaking, this is most often thought of as building a new channel to deliver products directly
to consumers. Amazon, Ebay, E-trade have all been talked about in this context. Unlike the
previous two categories, which may be built using local or proprietary networks, consumer
oriented systems are most often designed to leverage the penetration of the internet and its
killer protocol, http. There are a lot of different ways in which the Web can be used to
develop new commercial channels
prepare a CRM plan
prepare a delivery and return plan
prepare a security plan for den. of service attacks and hacker intrusion
develop a convenient wallet like payment system
build to a peak saturation readiness
develop a marketing plan to announce the channel
Planning for E-Business
E-business clearly requires that the technology team be fully informed about the core
goals of the business. Equally important, the management team needs to be fully informed
about the capabilities of the technology. Management needs to understand that e-business,
is most often about the use of technology to do old things new ways or to do new things that
have never been done before.
In developing E-business opportunities, it is important to recognize that there will be at
least four different kinds of projects:
infrastructure and organizational development
restructuring and integration of network based components
new process and market development
capitalizing on new opportunities in the knowledge domain
Infrastructure and organizational development
The infrastructure for e-business involves people, technology, and knowledge. All three
legs of the stool are equally important. The simplest of the three to describe is the
technology, and that is based in large part on the network.
Basic local connectivity: intranets and local area networks
Broad Area Connectivity: the Internet
Universal Connectivity: the World Wide Web
Much can be done in a business by moving from a paper based communication system
to local area networks and shared resources. The Internet provides broad connectability and
transmission reliability. Any of a number of existing protocols may be used in this
environment. In addition, as new protocols are needed, they can be created.
Thus, at a first level, the infrastructure involves the kinds of network connections that
are made. In this context, as the network integration increases, it becomes more important
to develop safeguards. So firewalls and security will become important. As more business
takes place in the electronic realm, authentication and encryption become more
important. Finally, as the scope of the connectivity increases, so does the reliance on
standard ways of exchanging information. In some ways, the ultimate form of this
integration is reliance on the World Wide Web. The World Wide Web is attractive as the
infrastructure for e-business because it provides and immediate client base. There is no
need to train your customers on how to use specialized software. It comes with the
connection. Similarly, for many employees, the World Wide Web model of hypertext
publishing provides a known model for information sharing that eliminates the need for
users to learn and come to understand specialized collaboration software.
It goes without saying, and can generally be assumed that employees within an
organization are already comfortable with PC technology. If not, training and orientation
materials are broadly available to bring people up to speed.
Finally, E-business requires that the knowledge base of the organization be converted to
an electronic format.
Communications systems, calendaring, e-mail and v-mail.
Directory services
Database systems
Document systems
Data representation technologies
Component management technologies
Encryption and Authentication technology
Web technologies
Broadcast technologies(streaming media)
It is critical that the processes that operate within an organization are integrated in such
a way as to reduce costs and prepare workers to deal with the second and third stages of e-
business development. Paper based systems have to be moved to electronic
form. Responsibilities for keeping electronic information stores up to date need to be
developed. Care has to be taken in planning for the migration of the information from one
form to the next.
The development of new systems assumes an informed systems analysis, design, and
implementation methodology. Whether it is a traditional waterfall methodology, a rapid
prototyping approach or an object-oriented methodology, the process is ultimately guided by
an reengineering approach to system design.
Restructuring and integration of network based components
This second kind of e-business project is concerned with interfacing what we assume to
be a streamlined organization with business partners. In is important that this kind of
project be built with an understanding on the part of those involved that the goal is to
achieve the maximum efficiency of the relationships that reach outside the organization to
regular trading partners. Over the last 25 years material requirements planning (MRP) has
evolved to allow more efficient calculation of what materials are needed and when. Initially
MRP failed to consider factors, such as capacity, space, capital, engineering changes, and
cost. More recent models encompass factors such as long range planning, high level
resource planning, master scheduling, rough cut capacity planning, detailed capacity
planning and shop floor control. One of the most important developments was the addition
of the concept of closing the loop and feedback. By continuous monitoring of what actually
happened versus what was planned, companies could continually improve their processes to
achieve more and more efficiency. With this business process in place, organizations can
look for ways to involve suppliers and consumers electronically. At a simple level, assuming
a supplier wants to keep my organization happy and wants to sell product, we can engage
an electronically enabled supplier in keeping stock or supplies at an optimal level. Looked at
from the supplier point of view, I want to produce optimally based on what I can see as my
consumers needs but avoid over or under producing. In this environment, an organization is
obviously concerned about opening up its internal data stores to outside
organizations. Thus, in design, there is a delicate balancing act between sharing too much
and too little data.
Beyond MRP, enabled organizations are looking to the development of a totally
integrated enterprise and Enterprise Resource Planning (ERP). ERP looks to provide
integrated capabilities for finance, forecasting, sales order processing, sales analysis and
local and global distribution, quality control, and powerful reporting and monitoring
tools. ERP extends to include the management of every operation of its value chain in order
to minimize the cost and time of getting products to customers. This is usually referred to in
the industry as Supply Chain Management or more recently Global supply Chain
New process and market development
The excitement of developing e-business is in projects that seek to develop new
processes or markets. After all, for most of us this is the glamorous arena in which
millionaires are made. These kinds of projects look for that new niche market or new way of
doing business that will become the standard for the future. There are four types of projects
here that are worth looking at in more detail:
new processes
new channels
new products, and
new markets.
A new process can take any number of forms. By way of example, consider a set of
web pages that provide customer service, or reprints of manual pages. In this case, the
business is looking to provide better customer support. Rather than having customers write
or call for service, the website allows customers to search a knowledge base, download
patches, or replace missing documentation.
A new channel would endeavor to take an existing product and target market and
simply open up a new channel. Rather than ordering concert tickets by phone, a customer
might order the tickets through the web. This might require a preapproved account, use one
of service bureau that provides credit checking and processing for a fee, or a self developed
payment acquisition and checking system.
A new product might include some derivative information product that was previously
not worth developing. For example, a bank might provide a currency conversion service. A
software house might provide a new kind of plug-in for browsers. A symphony might provide
pay per listen live broadcasts of concerts.
A new market might include a direct to consumer offering of a product that was
previously offered only through retailers. For example, Avon cosmetics is carefully testing
the waters of direct to consumer sales of the same products that have historically only been
available through its sales force.
Capitalizing on new opportunities in the knowledge domain
When all the dust clears, it may well be that the most successful businesses in e-
business are the support businesses that grow up to support the development of e-
business. Just as stock brokers make money whether investors succeed or fail, so there will
be a class of e-businesses that make money whether e-businesses succeed or fail. There are
a dozen or so classes of these businesses, but we will focus on only a few:
connection providersrouter makers to ISPs
portal managers
system integrators
tool developers
There are a large number of organizations that assist directly or indirectly in making the
connections between the various players in the e-business environment. From the routers
provided by CISCO systems to web site design firms, internet service providers, there are a
number of products and services that enable individuals and organizations to participate in
Portals were the hot idea in 1998. A number of organizations were positioning
themselves as high profile portals. Once a portal is established for a given community, the
portal owner can charge fees for the prominent display or incorporation of tenants to their
portal. The portal owner becomes a kind of real estate developer or landlord. Given the
popularity of their portal, they can collect a surcharge from those businesses that wish to do
business through the portal.
System integrators leverage their experience in working with a variety of clients to
enable e-businesses to develop integrated systems at a lower cost than they could in
house. These integrators can be doing simple integration such as making it possible to
publish selected database tables and forms to a web site or more complex integration in the
form of something like a full supply chain management system.
Finally, a variety of third parties are developing tools to make it easier for organizations
to develop e-business applications. These range from collaboration tools such as Lotus
Notes and work flow management systems. Also included in this category would be firewall
tools, intrusion tools, and web site development and management tools. One area that is
growing rapidly on the web today is the sales of model systems by people who have
developed them at great cost to others who are attempting similar efforts in other areas.