There is More to E-Commerce Than Selling on the Internet

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The latter half of the 1990’s has seen an explosion in the use of the Internet/Intranet and its accessibility to individuals, corporations and educational institutions. This revolution has dramatically changed the way organizations conduct business with its consumers and with each other. The geographic boundaries, that offer limited access to goods and services, are crumbling and companies of all sizes are busy building commerce solutions and adapting to new ways of doing business. The Internet/Intranet, with inherent features like easy access, real-time information, and low cost, is a natural driver for commerce solutions. Further, companies enticed with the promise of the following competitive advantages (but not limited to) are undertaking electronic commerce projects:

F Broader market reach

F Increased efficiency and accuracy through automated order-processing, inventory control, billing, shipping, etc.

F Reduced labor costs

F Lower overall costs

F Better customer service and support

F Instant communication with consumers and trading partners

F Improved profit margins through automated supply chain management

F Better forecasting of customer needs for goods and services

So, what is Electronic Commerce?

Electronic commerce (we will refer to them as eBusiness solutions) are often misunderstood to be limited to buying and selling of goods and services over the Internet. Actually, eBusiness solutions are a lot more than just the handling of business transactions and fund transfers over the Internet. It defines new forms of doing business. In addition to providing buying and selling services, commerce solutions can provide a complete system of services built into an organization’s digital nervous system so it supports the sales processes and provides total account management.

The diagram on page 33 illustrates the interaction between these services within the context of commerce solutions.

Where is electronic commerce going?

One definition of electronic commerce is: “any form of business transaction in which the parties interact electronically rather than by physical exchanges or direct physical contact”. However, while accurate, such a definition hardly captures the spirit of electronic commerce, which in practice is far better viewed as one of those rare cases where changing needs and new technologies come together to revolutionize the way in which business is conducted.

Modern business is characterized by ever-increasing supply capabilities, global competition, and customer expectations. In response, businesses throughout the world are changing both their organizations and their operations. They are flattening old hierarchical structures and eradicating the barriers between company divisions. They are lowering the barriers between the company and its customers and suppliers. Business processes are being re-designed so that they cross these old boundaries. We now see many examples of processes that span the entire company and even processes that are jointly owned and operated by the company and its customers or suppliers.

Electronic commerce is a means of enabling and supporting such changes on a global scale. It enables companies to be more efficient and flexible in their internal operations, to work more closely with their suppliers, and to be more responsive to the needs and expectations of their customers. It allows companies to select the best suppliers regardless of their geographical location and to sell to a global market.

One special case of electronic commerce is electronic trading, in which a supplier provides goods or services to a customer in return for payment. A special case of electronic trading is electronic retailing, where the customer is an ordinary consumer rather than another company. However, while these special cases are of considerable economic importance, they are only particular examples of the more general case of any form of business operation or transaction conducted via electronic media. Other equally valid examples include internal transactions within a single company or provision of information to an external organization without charge.

Electronic commerce is technology for change. Companies that choose to regard it only as an “add on” to their existing ways of doing business will gain only limited benefit. The major benefits will accrue to those companies that are willing to change their organizations and business processes to fully exploit the opportunities offered by electronic commerce.

Some common features of a commerce solution utilizing one or more of the above services include:

Universal Connectivity: Providing ubiquitous access to the system through a common interface.

Marketing: Publicizing products and services

Sales: Generating orders for the products

Payment: Enabling credit card and other payments along with electronic fund transfers

Fulfillment: Processing the order and delivering the product

Support: Providing pre and post sale assistance to generate more sales

Inventory Management: Maintaining and reporting inventory status

Secure Communications: Fast, efficient, reliable communication with customers and partners

Ivan Nikhoo is President of Vertex Systems. For more information,see their website at: www.vertexsystems.com


Successful Solutions

The services that help build the foundations of successful commerce solutions are as follows:

Client Services: Provides presentation, access and validation services to the users of the Commerce system.

Application Services: Processes information supplied by the user based upon business and data logic. Provides Web services, application security and serves as a point of integration for Store and Data Services.

Store Services: Performs user management, order processing, information interchange, running promotions and advertisements, processing data based upon business logic, and other commerce related services.

Data Services: Provides services aimed towards data storage, simplified programmatic access and legacy data connectivity.

Operating System Services: Primarily include directory, security, management and communications services.

Developer Services: Provide the tools necessary for component development, enterprise database development, team development and development lifecycle support.

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