Enhancing the Organizations Performance through E-business

By

Ms. Jaya Pal
Lecturer, Department of Computer Science
Ms. Mili Dutta
Lecturer, Department of Management
Birla Institute of Technology
Lalpur, Ranchi
 

Abstract

E-business i.e. electronic business allows an organization to establish real time associations among the various entities for specific purposes such as optimizing the flow of raw materials components and finished goods. E-business methods enable companies to link their internal and external data processing systems more efficiently and to work with more flexibility. This will bring suppliers and partners more close as well as one is able to satisfy the needs and wants of their prospective customers. In today's world every organization is planning their business in terms of internet and easy accessibility of the business from one end to other. With e-business three major operating processes: SCM (Supply Chain Management), CRM (Customer Relationship Management), PDM (Product Development Management) can be improved, which will definitely lead to better performance of small, medium and big organizations. In this paper we try to highlight how an organization can enhance their performance with the help of E-business.
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What is e-business? E-business ", is any business process that relies on an Aautomated Informatio System. It is mostly done with Web-based technologies. The term "e-business" was coined by Lou Gerstner, CEO of IBM.

E-business is derived from "e-mail" and "e-commerce," and is the conduct of business on the Internet, not only buying and selling but also servicing customers and collaborating with business partners. It was firstly used by IBM, in October, 1997, and also launched a thematic campaign built around the term. Companies are using the Web to buy parts and supplies from other companies, to find new avenues for their growth. Exploiting the convenience, availability, and world-wide reach of the Internet, companies, are trying to discover how to use the Internet successfully. e-business is what happens when you connect your critical business systems directly to customers, employees, vendors and suppliers - via intranets, extranets and over the Web. Combining the resources of traditional information systems with the vast reach of the Web.

E-business constitutes the ability of a firm to electronically connect, in multiple ways, many organizations, both internal and external, for many different purposes. It allows an organization to execute electronic transactions with any individual entity along the value chain—suppliers, logistics providers, wholesalers, distributors, service providers, and end customers. Today's browsers and with digital certificates now available for individuals and companies from Verisign, a certificate issuer, much of the early concern about the security of business transaction on the Web has abated and e-business is accelerating. Thousands of businesses are using e-business by establishing a Web site and publishing information electronically which is simple and relatively cheap however the impact on the business in limited. There are "self service" Web sites - where customers can check their account status or trace a package. This is hard to implement, but the return is great. Also e-business is moving to transactions - not just buying and selling, but all processes that require a dynamic and interactive flow of information.

CHARACTERISTICS OF E-BUSINESS

1) Consumers can now buy books, food, clothing, and a lot of other goods over the Internet in ways that allow distinct forms of customization.

2) Fourth, e-business requires firms to refocus and reconfigure almost every type of tangible and intangible
asset.

3) Fifth, e-business is dramatically reshaping every traditional business process: from developing new products and managing customer relationships to acquiring human resources and procuring raw materials and components.

4) e-business offers the platform for new forms of marketplace strategy models—a significant element of any firm's business model—that will change the competitive rules of the game.

E-BUSINESS MODELS:

A business model is a set of planned activities designed to result in a profit in a market place. It is at the center of business plan.

A business plan that describes a firm's business model.

E-business model is a model that aims to use and leverage the unique qualities of the internet and the world wide web.

Components of E-business model:

1) Value proposition: It defines how a company's product or service fulfills the need of  customers. Example. Kozmo.com provides this facilities.

2) Revenue model: It describes how the firm will earn revenue, produce profits and produce a superior return on invested capital.

3) Advertising revenue model: In which a web site offers its users content, services and products also provides a forum for advertisements and receives fees advertisers.

4) Subscription revenue model: In which company offers its users content or services and charges a subscription fee for access to some or all of its offerings.

5) Transaction fee revenue model: In which a company receives a fee for enabling or executing a transaction. For example E-Trade.com is an online stockbroker receives transaction fees to execute a stock transaction on behalf of a customer.

6) Sales revenue model: In which a company derives revenue by selling goods information or services. Example-Doubleclick.net gathers information about online users and then sells it to other company.

7) Affiliate revenue model: In which company steers business to an affiliate and receives a referral fee or percentage of the revenue from any resulting sales

When organizations prefer online, they have to decide which e-business models best suit their goals. A business model is defended as the organization of product, service and information flows, and the source of revenues and benefits for suppliers and customers. The concept of e-business model is the same but used in the online presence. The following is a list of the currently most adopted e-business models:

* E-shops
* E-procurement
* E-malls
* E-auctions
* Virtual Communities
* Collaboration Platforms
* Third-party Marketplaces
* Value-chain Integrators
* Value-chain Service Providers
* Information Brokerage
 
BUSINESS CHALLENGES:

Some of the challenges that managers face:

1) taking right decision at right time is a crucial part in a business for that the enterprise's information systems have to evolve rapidly to keep up with change.

2) Communication and the ability to connect become highly significant in a loosely coupled organization

3) Managers require a combination of skills and methods that can tax the most advanced enterprise.

It's a problem that all businesses face as they grow: coordinating the different units to maintain or increase productivity with fewer resources.

To overcome above these business challenges it is essential to have the ability to share and exploit information across the enterprise and this is the key to success in business.

Managers hold a mental map of the relationships of the business units, the processes and business rules, and the business events that are driving the enterprise. They understand intuitively how these relationships can be modified to achieve better results It's frustrating, therefore, when the technologies behind enterprise communications(the information systems) struggle to keep up though it's not particularly surprising.

APPLICATION SOFTWARE FOR E-BUSINESS

Recent developments are increased for the urgency of the solution. So for bringing efficiency in the system, companies like Amazon.com selling books over the Web, Federal Express allowing customers to track their deliveries over the Internet, and Montreal Bank of Canada providing applications from Web browsers for using the Internet and the Web, integrated with existing business processes.

Managers are searching for something that works - and thinks quickly.. They think of the company as a whole, not as a set of parts. They operate in terms of real business processes and events, not anonymous bits of data. In other words, they're applying enterprise intelligence integration of management information systems across the enterprise so that it would bring real competitive advantage.

There are various software being used for E-business. One of the common software used is. NET

* NET:- MachroTech's approach to business integration with Microsoft. NET is introduced as a solution for developing the enterprise and its existing information systems in order to develop new technologies like the Web.

* NET is software that connects information, people, systems, and devices through the use of XML Web services. And is also an Internet centric architecture and technology offering that defines how different applications, sources of data, or devices can integrate with and share information with each other.. NET is not a new type of user interface or piece of business application that a user needs to learn or worry about. Even though there are some user interface components to. NET for the most part,. NET is a technology layer that sits "under the hood" of the application and enables it to exchange information with other XML Web Services ready applications over a Web-based communications layer. In this Web services environment — which the technologists would define as a rich, loosely coupled model of distributed computing and Web services information can be made available to any application or device type. These types of application-to-application transactions are called "Web services," meaning that they are conducted over a Web- or Internet-based communication link either within the business or outside of the business..NET can improve business by increasing operating profits; decrease costs, and connect with customers, partners and employees.

Advantages of NET:

Lower Operating Costs
Drive More Sales
Integrate Better with Customers
Lower IT Costs

APPLICATION OF E-BUSINESS

An INTRANET is an e-business application deployed within a business. An EXTRANET is e-business application deployed within the larger community of a business - including its suppliers, vendors and contractors.

Connecting either one to the INTERNET makes the information it contains accessible from anywhere in the world using ubiquitous software.

e.g E-Business for Small and Mid-Sized Businesses- SMB firms have unique needs:

* Limited IT resources and sophistication
* Continuous cost pressures
* Limited discretionary capital for any long-term IT investments
* Constant competitive threats that threaten their survival

That's the reality for SMB enterprises. They require cost-effective solutions that can be up and running quickly -- and that will continue to meet their needs as the business grows.
 
One of the biggest difference between traditional and SMB ERP implementations is customization. Traditional ERP packages are heavily customized, requiring huge amount of money. SMB e-business implementations are measured in thousands of dollars instead of millions, and months instead of years. The vendors promise up-front, guaranteed agreements on schedule and price, fully functioning applications and a lot fewer headaches than traditional ERP consultants These vendors - SAP, IBM, Microsoft Oracle and others - are all aiming to provide integrated enterprise application suites. These prepackaged solutions provide out-of-the-box functionality that enables SMB's to quickly and easily manage financials, human resources, supply chain, customer relationships, and other key business processes.

CONCLUSION:

The e-business is to explore the association between the level of e-business planning and business performance. Information technology (IT) has long been used as a change agent leading to greater efficiency and effectiveness. The growth of the Internet and the opportunities this offers for e-business represent the latest phase in the application of IT. e-business initiatives including existing infrastructure and technologies helps to identify new e-business opportunities and create short, medium and long-term action plans to support the strategic vision, improvement to infrastructure and technology, better decision-making power to the managers to support effective business transformation. E-Business transformation has become a critical imperative for most organizations today. However these transformations require specific skills, capital, information, technology, access to markets, and core resources that many traditional firms lack. Thus e-business is changing the nature of its relationships and interaction between the organization and its intermediaries. The Internet now touches the sales, fulfillment, and service functions of the consumers. Stronger links can be formed between organizations and Business Partners through the Internet, enhancing profitability of the channel as well as customer satisfaction. The use of Internet technology will tighten up the degree of collaboration between the organization and its suppliers which will lead to cutting of costs and cycle times.e-business is going to change the picture of the current business scenario.Changes are going on and in near future it is expected to grow much more. The business organization's will take decisions and do the business more efficiently and on the other side customer delight.

REFERENCES :

1.  www.en.wikipedia.org/wiki/electronic business

www.ebstrategy.com/knowledge/researchinsight /ebusiness for small and mid-sized business

2. P. Kotler. Marketing management: analysis, planning, implementation and control. Prentice Hall

3. Laudon-Laudon, Management Information suystem, Pearson Education

4. J. Gordijn, J.M. Akkermans, and J.C. van Vliet. What's in an electronic business model. In R. Dieng and O. Corb, editors, Knowledge Engineering and Knowledge Management - Methods,Models, and Tools, 12th International Conference, EKAW 2000, Juan-les-Prins, France,October 2000, volume LNAI 1937, pages 257–273. Springer Verlag, 2000. Also availablefrom http://www.cs.vu.nl/˜gordijn.

5. 5. Soon-Yong Choi, Dale O Stahl, and Andrew B. Whinston. The economics of doing business in the electronic marketplace. Macmillan Technical Publishing, Indianapolis, 1997.

6. 6. J. Gordijn, J.M. Akkermans, and J.C. van Vliet. Business modelling is not process modelling in Stephen W. Liddle and Heinrich C. Mayr, editors, Conceptual Modeling for E-Business and the Web, Salt Lake City, Utah, 9-12 October, volume LNCS 1921, pages 40–51. Springer Verlag, 2000. Also available from http://www.cs.vu.nl/˜gordijn.
 

Ms. Jaya Pal
Lecturer, Department of Computer Science
Ms. Mili Dutta
Lecturer, Department of Management
Birla Institute of Technology
Lalpur, Ranchi
 

Source: E-mail May 8, 2008

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