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VI Semester BBA
E-Business
NOTES
Prepared By,
Mr. Pavithran K.G
Assistant Professor, NHC-K
E-BUSINESS
Introduction, E-Commerce – definition, History of E-Commerce , types of E-Commerce B
to B etc. Comparison of traditional commerce and E-Commerce . E-Commerce business models
– major B to B, B to C model, Consumer-to-Consumer (C2C), Consumerto-Business (C2B) model,
Peer to-Peer (P2P) model – emerging trends. Advantages/ Disadvantages of E-Commerce , web
auctions, virtual communities, portals, E-business revenue models.
Introduction of E-Commerce:
E-business, is the application of Information and Communication Technologies (ICT) in support
of all the activities of business. Commerce constitutes the exchange of products and services
between businesses, groups and individuals and can be seen as one of the essential activities of
any business. Electronic commerce focuses on the use of ICT(Information and Communication
Technologies) to enable the external activities and relationships of the business with individuals,
groups and other businesses or e business refers to business with help of internet (i.e.) doing
business with the help of internet network.The term "E-Business" was coined by IBM's marketing
and Internet teams in 1996.
In 1997, IBM marketing, with its agency Ogilvy & Mather began to use its foundation in IT
solutions and expertise to market itself as a leader of conducting business on the Internet through
the term "e-business." Then CEO Louis V. Gerstner, Jr. was prepared to invest $1 billion to market
this new brand.
After conducting worldwide market research, in October 1997, IBM began with an eight-page
piece in the Wall Street Journal that would introduce the concept of "e-business" and advertise
IBM's expertise in this new field. IBM decided not to trademark the term "e-business" in the hopes
that other companies would use the term and create an entire new industry. However, this proved
to be too successful and by 2000, to differentiate itself, IBM launched a $300 million campaign
about its "e-business infrastructure" capabilities.Since that time, however, the terms, "e-business"
and "E-Commerce " have been loosely interchangeable and have become a part of the common
vernacular
E-business includes E-Commerce, but also covers internal processes such as production, inventory
management, product development, risk management, finance, knowledge management and
human resources. E-business strategy is more complex, more focused on internal processes, and
aimed at cost savings and improvements in efficiency, productivity and cost savings.
Meaning of E-Business:
E-Business is the conduct of business on the Internet, not only buying and selling, but
also servicing the customers and collaborating with the business partners. E-Business includes
customer service (e-service) and intra-business tasks.
Example of E-Business:
• An online system that tracks the inventory and triggers alerts at specific
levels is E-Business Inventory Management is a business process. When it is
facilitated electronically, it becomes part of E-Business.
• An online induction program for new employees automates part or whole of its offline
counterpart.
Meaning of E-Commerce:
(a) E-Commerce is defined as those commercial transactions carried out using the
electronic means, in which goods or services are delivered either electronically or in their
tangible or intangible form.
Examples of E-Commerce:
(a) Online shopping:
Buying and selling goods on the internet is one of the most popular examples of
ECommerce .
(b) Electronic payments:
When we are buying goods online, there needs to be a mechanism to pay online too. That
is where the payment processors and payment gateways come into the picture. Electronic
payments reduce the inefficiency associated with writing the Cheque books. It also does
away with many of the safety issues that arise due to the payments made in currency
notes.
Main difference between E-Business and E-Commerce :
E-BUSINESS E-Commerce
E-Business covers the online transactions, but E-Commerce refers to the online transactions
also extends to all the internet based (i.e.) buying and selling of goods and/or
transactions with the business partners, services over the internet.
suppliers and customers like: selling directly
to the consumers, manufacturers and suppliers;
monitoring and exchanging information;
auctioning surplus inventory; collaborative
product design. These online interactions are
aimed at improving or transforming the
business processes and efficiency. An E-
Business status is received when we handle
the business using phone calls, E-Mail orders,
postal orders, and also the online activities.
A brief history of E-Commerce :
(1) 1887: US statistician Herman Hollerith (1860–1929) sets up the forerunner of IBM
(International Business Machines), a company that will pioneer electronic forms of doing
business in the decades that follow.
(2) 1950s–1960s: IBM pioneers online transaction processing (OLTP): a way of handling
money transactions instantly (in "real-time") using sophisticated computerized systems.
With American Airlines, IBM develops an OLTP system called SABRE (SemiAutomatic
Business Research Environment) that revolutionizes airline reservations. In 1969, IBM's
transaction-processing software evolves into CICS (Customer Information Control
System), one of its least-known but most successful products.
(3) 1970: US company Docutel invents the ATM (automated teller machine, also known as
the "cashpoint"), which works using online transactions made through bank computers.
The popularity of ATMs leads to even more sophisticated forms of transaction processing.
(4) 1980s: CompuServe, Prodigy, and AOL (America Online) let people shop from home
using their computers and telephone lines.
(5) 1989: Tim Berners-Lee (1955–) invents the World Wide Web, unwittingly laying the
foundations for an explosive growth of E-Commerce in the years that follow.
(6) 1994: Jeff Bezos (1964–) founds Amazon.com, the iconic e-store.
(7) 1994: Marc Andreessen (1971–) develops the Netscape Navigator web browser, which
ships with a feature called SSL (Secure Sockets Layer): built-in encryption that allows
credit card transactions to be carried out securely online. There is a huge explosion in online
shopping and business and the dot.com phenomenon begins.
(8) 2000/2001: The dot.com bubble bursts and over 750 online businesses go to the wall. At
one point, Amazon.com's share price plunges to less than 10 percent of its original value.
(9) 2008: E-Commerce represents about 3.4 percent of total sales.
(10)
2012: The US Census Bureau reports that US E-Commerce retail sales for the second
quarter of 2012 are $51.2 billion (adjusted for seasonal variation). In 2Q 2012, ECommerce
represents about 4.7 percent of total sales (up from 4.2 percent one year before).
Electronic Fund Transfer
It is a very popular electronic payment method to transfer money from one bank account to another
bank account. Accounts can be in same bank or different bank. Fund transfer can be done using
ATM (Automated Teller Machine) or using computer.
Now a day, internet based EFT is getting popularity. In this case, customer uses website provided
by the bank. Customer logins to the bank's website and registers another bank account. He/she then
places a request to transfer certain amount to that account. Customer's bank transfers amount to
other account if it is in same bank otherwise transfer request is forwarded to ACH (Automated
Clearing House) to transfer amount to other account and amount is deducted from customer's
account. Once amount is transferred to other account, customer is notified of the fund transfer by
the bank.
Traditional Commerce v/s E-Commerce
Sr.
Traditional Commerce E-Commerce No.
Information sharing is made easy via electronic
Heavy dependency on information communication channels making little
1
exchange from person to person. dependency on person to person information
exchange.
Communication or transaction can be done in
Communication/ transaction are done asynchronous way. Electronics system
in synchronous way. Manual
2 automatically handles when to
pass
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