Page 9 - DCAP306_DCAP511_E-COMMERCE_AND_E-BUSINESS

E-Commerce and E-Business

According to IBM’s Web site, e-Business is defined as the concept of transforming key business
activities through the use of internet technologies.

1.1 E-Commerce and E-Business
Let us first understand the terms e-commerce and e-Business. Electronic commerce, also termed as e-
commerce, is a process of buying and selling of goods or services using electronic systems. These
electronic systems can either be the Internet or other computer networks. The World Wide Web plays a
major role in the implementation of e-commerce in most of the organizations.

Did you know? J.P. Morgan annual forecast report estimates the value of global e-commerce in 2010 at
$680 billion worldwide and up to 18.9% in the form of revenue. E-Commerce in the
U.S. is expected to increase to $187 billion at 13.2%. J.P. Morgan predicts that global e-
commerce revenue will increase to $963 billion by 2013.
Some use the terms e-commerce and e-Business in an interchangeable manner, but these terms refer to
different concepts. The concept where ICT is used in buying and selling of goods or services between
organizations and in Business-to-Consumer (B2C) transactions is known as e-commerce. On the other
hand, the concept where ICT is used to enhance the key business processes through the facilities
available on the Internet is known as e-Business. It comprises of any process by which an organization
conducts business over a computer network.
The three main processes enhanced in e-Business are:

1. Production processes, which include:
(a) Procurement
(b) Ordering and replenishment of stocks
(c) Processing of payments
(d) Electronic links with suppliers
(e) Production control processes
2. Customer-focused processes, which include:

(a) Promotional and marketing efforts
(b) Selling over the Internet
(c) Processing of customers’ purchase orders and payments
(d) Customer support
3. Internal management processes, which include:
(a) Employee services

(b) Employee training
(c) Internal information-sharing
(d) Video conferencing
(e) Recruiting
E-Commerce generally meets the needs of an organization, retailers and consumers to reduce the costs.
It also considers the quality of service and delivery of goods.
1.1.1 Evolution of E-Commerce
A combination of technological innovation and regulatory reform has helped in the evolution of e-
commerce. In the early 1970s, e-commerce applications were first developed with innovations like
Electronic Funds Transfer (EFT) to electronically transfer funds from one organization to another.
However, these applications were used in only a few corporations, financial institutions and other

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