What is E-Commerce?

E-commerce is used everywhere in everyday life. It brings the universal access of the Internet to the core business processes of buying and selling goods and services. It helps generate demand for products and services and improves order management, payment, and other support functions. The overall goal is to cut expenses by reducing transaction cost and streamlining all kinds of processes. The Internets worldwide reach helps businesses discover new markets while increasing the speed of access and the speed of transaction.

A broader definition comes Elias Awad, author of the book Electronic Commerce 2002. Ecommerce (EC) can be defined in numerous ways:

From a communications perspective, e-commerce is the ability to deliver products, services, information, or payments via Internet such as the Internet and the World Wide Web.
From an interface angle (EC) involves various information and transaction exchanges: business-to-business (B2B), business-to-consumer (B2C) and consumer-to-consumer.
From the view of a business process, EC includes activities that directly support commerce electronically by means of networked connections. Within business processes and b2b are managed by the same networks as that of b2c processes.
From an online point, EC is an electronic environment that makes it possible to buy and sell products, services, and information on the Internet. The product may be physical such as cars, or services such as news or consulting.
From a structural viewpoint it involves various media: data, text, web pages, Internet telephony, and Internet desktop video.
Lastly as a market, it is a worldwide network. A local store can open a Web storefront and find the world at its doorsteps- customers, suppliers, competitors, and payment services.

Analyse the issues and problems that may face business organisations in the UK as a result of e-commerce ideas and technologies.

Security

Security continues to be a problem for online business. For millions of potential cyber-customers, the fear of credit card theft is a real one.

E commerce decreases employment levels by taking away customers from local shops and businesses. However many companies have seen the benefits E-commerce brings therefore have developed web based business. Others have developed in response to competition.
With the growing dependence on the Internet for companies and individuals there is pressure to for businesses and even government to take up the incentive and rearrange their business strategy to have an e-commerce/ business strategy to keep up with the current wave of telecommunication.

Then construct a corporate report for a business organisation that incorporates an e-commerce strategy.

Building trust and credibility are critical to successful e-commerce in the connected economy but in the enthusiastic rush to exploit the opportunities, security may not be at the forefront of business priorities.

The road map for a successful e-commerce business is identifying the critical success factors (CSFs) and developing a realistic strategy for the business. For example IBM success story came from them identifying four CSFs that made e-commerce work in any industry. They consist of:

A ...

This is a preview of the whole essay

Then construct a corporate report for a business organisation that incorporates an e-commerce strategy.

A sound strategy that has the full support of top management
A clear goal of long term customer relationships and value
Making full use of the internet and related technologies
A scalable and integrated business process and infrastructure

Taking into consideration the importance of objectives for revenue generation the

Objectives

Develop revenue from new geographical markets
Increase revenue from smaller-scale purchases from retailers
Ensure retention of key account customers
Improve efficiency if sourcing raw materials
Reduce time to market and cost for new development
Protect and increase efficiency of distributor and partner network

Strategies to achieve goals

Create e-commerce facility for standard products and assign agents to these markets
Create e-commerce facility for standard products
Soft lock in by developing extranet facilities. Continued support from sales reps
Develop e-procurement system
Use collaboration and project management tools
Create partner extranet and aim for paperless support

Key performance indicators (critical success factors)

Achieve combined revenue of £1m by year-end. Online revenue contribution of 70%
Increase sales through retailers from 15% to 25% of total by year 2. Online revenue contribution of 30%
Retain five key account customers. Online revenue contribution of 100% from these five.
Reduce cost of procurement by 5% by year-end, 10% by year 2. Achieve 80% of purchasing online
Reduce cost and time to market by average of 10% by year 3
Reduce cost of sales in each of 5 main geographical markets by 30%

The advantages for implementing this strategy into our business would be visible in various factors as outlined below. It also pinpoint the success of other businesses whom have taken the initiative to implement e-commerce into their business strategy.

Cost Reduction

Doing business on the Internet is cost effective; it reduces logistical problems and would put our business on par with giants like for example Tesco.com, Vauxhall.com and Internet Banking. For instance in a commercial bank a basic over the counter transaction cost on average 65 pence. By post and telephone, the cost of the same transaction halves. With a dial-up PC banking service, it halves again, to about 15p. With an Internet banking system, the cost drops below 5p, and sometimes as low as 1p. Every financial transaction eventually turns into an electronic process. The sooner we make the conversion, the more cost effective the transaction becomes.

Economy

E-commerce is economical. Unlike the brick and mortar environment, in e-commerce there is no rental of physical store space, insurance, or infrastructure investment. All you need is an idea and as an established business we have jumped this process. However a well-designed web storefront would need to be implemented to attract and reach our cyber-customers.

Higher Margins

E-commerce means higher margins. For example, the cost of processing a conventional airline ticket?????. In comparison the same ticket processing (called an e-ticket) over the web cost ?????. Along with higher margins our business can gain more control and flexibility, therefore allowing us to save time when manual transaction are done electronically.

Better Customer Service

E-commerce means better and quicker customer service. Web-based customer service would make our customers and clients happier. With contact via telephones there is always the prospect that customers will be put on hold for a length of time whilst they wait on a clerk to tap into our account, or them getting a busy tone every time they call due to the influx of calls. The web merchant gives customers direct access to their personal accounts over the web. It saves time and money. It is a win- win proposition. As we fall into the category of companies that do business with other companies, adding customer service to the web is a competitive advantage. A good example of improved customer service satisfaction is the overnight package delivery service, where tracking numbers allow customers to check the whereabouts of a package online.

Quick Comparison

E-commerce helps prospective clients and customers an effective way of comparing companies and online shops. Automated online shopping assistants scour net stores to find the best deals appropriate for client/customer needs.

Teamwork

E-commerce helps people to work together. E-mail is one example of how people collaborate to exchange information and work on solutions. It will transform the way our organisation interacts with suppliers, vendors, business partners, and customers. More interaction means better overall results. A study of 40 corporate intranets by the META group found that the typical intranet (within-company network) had an average return on investment (ROI) of 38%. Networks that provided collaborative capabilities had a 40% ROI and those that gave people direct access to needed information had a 68 percent ROI. The implication is that the more “collaborative-rich” the website, the higher the payoff for business.

Convenience, and Control

Convenience for the customer/consumer/client is a major driver for us to implement change. Customers and merchants save money: as they are online 24 hours a day 7 days a week; experiencing no traffic jams, no crowds; and do not have to carry heavy shopping bags. Control is another major driving factor of our company. For example in the banking world it used to be the case of banks controlling the relationship with the customer, however the customers today can have more control of their banking needs via the internet web sites.

Customisation

A customer being able to customise a product to suit their individual needs gives ultimate customer satisfaction. It would also inform us of current trends and preferences.

Concluding with a list of the main issues and recommendations for dealing with e-commerce within the business environment.

Some suggestions that need to be considered for an effective interactive e-commerce website:

Inclusion of a search engine on the site home page. This speeds up searching for specific data.
The opportunity for site visitors to surf in "text-only" mode, which allows potential customers with slow low power PCs to access information quickly.
Use of Bulletin Boards which offer specific up-to-date information such as used by financial institutions.
Use of Chat Rooms, allowing the congregation of users and an exchange of messages. They help to promote the community feeling on your site.
"Members only" tools and domains, which help to make users feel included by having their own special domain within a site.
"Cool tools" or "breakthroughs", which make sites more fun by allowing listening to music, using on-line calculators, viewing properties, or trying on spectacles.

E-mail technology shows how it can improve or damage your company's image.

Spam e-mails (unsolicited e-mails) are regarded as a major nuisance on the Internet, but an "ethical" e-mail marketing strategy can be very effective. A Meridian Research report in January reported that £133 million is spent on e-mail marketing, and that spending is rising fast. The article explains five ways in which companies can use e-mails that are acceptable and effective:

E-mail newsletters - help to establish continuing relationships with current and prospective customers.
E-mail newsletters with "hot links", which allow customers to click back for more information on particular items.
E-mail alert services - subscribers can sign up for these and receive special e-mail alerts of items of particular interest to them.
Participation in third party e-mail newsletters can be obtained by using mailing list clearing houses.
Interactive e-mail newsletters which allow the generation of dialogue, and allow subscribers to contribute. These can later add on techniques such as e-mail auto responders, e-mail product pictures, e-mail animations, and e-mail panoramic virtual reality.

Please note that these techniques can be outsourced if necessary, as they may be difficult to set up. None of the e-mail marketing possibilities suggested will work if wrongly used by "spamming".

Abstract

The rise of the information economy and the challenges of the global market have secured a strategic place in all organisations for e-commerce. Competition is forcing many companies to restructure so that customers rather than business processes become the focus of their organisation. In fact, to remain competitive in global markets, e-commerce has become imperative it has the capabilities to streamline central organisational policies and procedures.