E_Bussiness

DAYSTAR UNIVERSITY DEPARTMENT OF COMMERCE DAYSTAR UNIVERSITY DEPARTMENT OF COMMERCE BUILDING A CUSTOMER FOCUSED E-BUSINESS PRESENTED TO BY Evans Killi (10-1745) 16 .02.2010 What is e-business' E-business was a phrase first coined by IBM in its advertising campaign in the 1990s it was defined ‘as the transformation of key business processes through the use of internet technologies’. Today, e-commerce is commonly defined as electronic transactions conducted by business partners, which can be both organizations and individuals. In contrast e-business is much broader, referring not only to buying and selling, but also to servicing customers, collaborating with business partners, and conducting electronic transactions within an organization (Li, p.6, 2007). Jelassi and Enders defined e-business as the use of electronic means to conduct an organizations business internally and/or externally. They specifically emphasized the inclusion in their definition of internal e-business activities, including the linking of an organization of an organization employee with each other through an intranet to improve information sharing, facilitate knowledge dissemination and support management reporting. E-commerce is regarded as a subset of e-business, which deals with the facilitation of transaction and selling of products and services online. Either via the internet or via any other telecommunication network (Li, 2007) E-business is not just about dot.com or internet-only companies, or selling or selling or buying via electronic channels (which is often referred to as e-commerce). Fundamentally, e-business is a much broader concept and it is concerned with using the internet and related technologies to integrate and redesign organizations internal activities, process and external relations, and create new ways of working that are significantly different from, and very often far superior to, what was possible (or conceivable) in the past. In other words, e-business is about developing new ways of working by innovatively exploiting the new capabilities of ICTs in general and the internet and the internet and related technologies in particular (Li, 2007) The term e-business denotes specific kinds of business activities performed by one or more organizations with the use of information technology. To call a combination of business activities and information technology e-business, a number of criteria have to be met. This includes; the activities must be core activities (also called primary activities) for the business, i.e. they must be directly related to the reason of existence of the organization(s) involved. For example, for an airline company, selling tickets and transporting people are core activities, but bookkeeping and cleaning there offices are not. Secondly, the use of information technology must be essential for the way the activities are performed, i.e. the activities must be IT-enabled. Activities for which efficiency or effectiveness are only improved by the use of IT are called IT-supported activities hence they do not qualify for e-business. Thirdly the information technology must be use in an integrated fashion for both processing and communication of information. In other words: information must be both transformed and transported digitally. If only one of these two aspects is enabled IT, we do not call it e-business (Grefen, p.8, 2010). Electronic business is conducting core business activities in a way that is enabled by the integrated use of information technology for processing and communication of information in other words E-business is IT-enabled business (Grefen, p.12, 2010). History of e-business Back in 1960s, business organizations started using computers to support basic administrative tasks (Grefen, 2010). Although e-business is not per se coupled to the use of the internet, its development is closely related to the development of the internet. Therefore the development of the internet plays an important role in the history e-business. The use of information technology to allow companies to collaborate in business goes way back into the previous century. In the early days of this development, we find dedicated systems for very specific business activities. An example of this is the SABRE airline booking system, which was used from the early 1960s to connect airline ticketing offices to a central data center (Grefen, 2010). Before the rise of the internet, high-volume e-business scenarios typically relied on dedicated digital communication channels, i.e. communication channels that were created for specific business activities between specific pairs of business partners. Low-volume e-business typically relied on using existing phone lines and modems to connect computers to each other. Often, dedicated channels were dedicated both conceptually and physically, the dedicated channels were usually very expensive and time consuming to set up and maintain. Therefore, they typically only supported long-term, stable business collaborations between pairs of large organizations. Among the first large commercial parties taking advantage of the internet possibilities were Dell (Dell & Fredman 2006), Cisco (Paulson 2001) and Amazon (Marcus 2005). The fact that two of this three are IT companies is not a coincidence, as using e-business was still highly technology-dominated in those days. A few years later, however, many business organizations were venturing commercially into the internet, leading to the internet hype or e-commerce hype (Grefen, p.18, 2010). E-business has been growing steadily and has taken a solid position in the global economy. In many domains, e-business has become the primary way of doing budiness, change the e-business landscape dramatically (Grefen, p.18, 2010). With the advent of the internet, a ubiquitous and inexpensive infrastructure became available for business transactions. like in the banking, insurance and travel industries. Other domains are currently in a transitional phase, like music, television and publishing industries here we observe a growing use of digital communication media, interactivity, and on demand services. Anything can be traded using e-business nowadays, from simple pencils to complete islands. The market-level architecture of an e-business system defines the structure of that system at the inter-organizational level in terms of functional software components supporting specific functions of all involved business parties and high level interfaces supporting the interactions among those components (Grefen, p.5, 2010) . Information and communication technology (ICT) is becoming more and more prevalent in many businesses. In the past, many information systems have been developed to deliver some specific functionality. Nowadays, one of the tasks of information technology (IT) departments is to integrate existing information systems, not only within the company borders but also across company borders (Hoque, p.4, 2000). New information systems are being developed that should deliver cross-company functionality. The human communication processes that are involved in analyzing and designing the businesses, and in designing, implementing and maintaining information systems, are affected by the fact that the IT department of one company has to create software to fulfill requirements of people not only in their own company but in other companies too. In this context, the term “extended enterprise” is often used (Hoque, p.5, 2000). It is now conventional wisdom that both customers and manufacturers have strong incentives to use internet-based marketing channels (Alba, 1997; O’ Cass & Fenech, 2003). It has been argued that the internet is changing the structure of marketing channels, especially in industries such as retail banking, news media, and music where an important part of the output is in digital form (Mols, Bukh, & Flohr Nielsen, 1999). However even many small and medium sized manufacturers have adopted and implemented internet based marketing channels, though great differences can be observed in how this firms have actually gone about this (Hoque, 2000). Value creation Over the last decade, interest in e-business has evolved from optimistic scenarios with the explicit message, in the popular press that: If you’re not on eBusiness, you’re out of business, to pessimistic scenarios pointing to the demise of the dot.coms (Cassidy, 2002) largely as a result ‘flawed e-business models’ (Hagel, 2002).Amit and Zott, 2000 emphasis on value created from e-business. Amit and Zott (2000, p.1, 2001) asserts that: a business model depicts the design of transaction content, structure and governance so as to create value through the exploitation of business opportunities. We propose that a firm’s business model is an important locus of innovation and a crucial source of value creation for the firm and its suppliers, partners and customers (Currie, p.45,2004). Value creation from e-business models aims to provide a more rigorous intellectual and practical analysis of the e-business model concept, not forgetting the critically of an industry-level analysis (Currie, p.78, 2004). Reference Amit, R. and C. Zott (2000). Value creation in e-commerce Business models. Amit, R. and C. Zott (2001). ‘Value creation in e-business.’ Strategic Management Journal 22: 493-520. Cassidy, J. (2002). Dot.con: How America lost its mind and money in the internet Era. Perennial, Harper Collins. Currie, W. (2004). Value creation from e-business models . Burlington Britain: Burlington Britain. Grefen, P. (2010). Mastering e-business. New York: Madison Avenue. Hagel, J. (2002). Out of the box: Strategies for achieving profits today and growth tomorrow through web services. Harvard Business School Press. Hoque, F. (2000). E-business: where to begin. applying principles of modeling, knowledgebase and decision making infrastructure. New York: Blackwell publishing. Li, F. (2007). What is e-business' How the internet transforms. Oxford USA: Blackwell publishing.