Module II
Introduction to E-Business
M.Com II, Semester IV
Subject: Computer Applications in Business
Introduction to E-Business
E-business has made shopping easy for us. We don’t need to go
anywhere physically, we can shop from home and get great deals
too. But do you know what is e-business? Let’s find out more
about e-business.
E-business or Online business means business transactions
that take place online with the help of the internet. The term
e-business came into existence in the year 1996. E-business is
an abbreviation for electronic business. So the buyer and the
seller don’t meet personally.
Origin and Overview of E-Business
➢E-business is the term used to describe financial transactions made or
recorded electronically.
➢These days, transactions can be made through a watch or cellphone, and
checks can be deposited without the depositor ever having to visit a
bank, but 30 years ago, that wasn’t at all the case.
➢The evolution of e-business has taken us from a world of cash and
checks into a global economy in which 14.1 percent of all worldwide
retail sales were e-sales in 2019 and this number climbs every year.
➢To understand how these convenient transactions became such an
integral part of our lives, it’s important to look at how the technologies
that make this option so available came about.
The 1980s
➢The real beginning of electronic business came about in the 1980s, when the use
of personal computers began to grow.
➢The word “personal” doesn’t necessarily mean that these computers were
available in family homes; rather, they were often used for business purposes,
allowing companies to move from paper filing records to electronic storage of
transactions and data in databases capable of being searched, collated and
analyzed far faster than an individual employee.
➢We cannot say that personal computers hadn’t entered the household market.
➢1974 to 1977 saw the very first personal computer models available for
purchase, and from 1975 to 1981, the market saw the launch of Microsoft,
Apple and IBM, as well as spreadsheet and word processing software.
➢However, computers of this age were still working through their very first
iterations, and it took until the end of the 1980s to see anything related to a
world-wide web.
The Internet and the 1990s
➢ While companies had learned to connect individual computers to each other, the
invention we now know as the internet came to popularity around 1990 to 1991.
➢ From there, the internet grew quickly, as did the capabilities of the personal
computers that were able to connect and use it.
➢ This decade saw the creation of a number of things many users now take for granted,
including web browsers, Google, E-Bay, Amazon and PayPal, as well as PC gaming.
➢ The computer technology and the online technology went hand-in-hand, with
developments on one side spurring new innovations on the other.
➢ Once companies realized that online commerce was not only possible, but that it
could help them reach target markets that had previously been unavailable, this trend
only continued to grow.
➢ Businesses went from offering informational websites in the early 1990s to offering
full online purchasing opportunities as early as 1994.
➢ This rapid development was due not just to the development of computer and
internet technology, but the ways the banking and financial industries were evolving
to make things even easier for consumers and companies to process purchases
electronically.
The Financial Side of E-Business
➢ The advances of technology in the 1980s and 1990s helped fuel the development of e-
business as well. The 1980s introduced the magnetic strip on the back of a credit card,
which would be read by computer equipment to help speed up transactions.
➢ While the early technology for credit cards was introduced in 1973, reducing
transaction time significantly, since computer networks weren’t at all connected, most
retailers still had to call a company by phone to ensure the card was legitimate. The
magnetic strips on cards in the 1980s combined with the development of the internet to
make credit cards easy to use.
•
The 2000s : WIFI and Mobile
➢ The early 2000s saw computers and the internet becoming staples throughout
households. In terms of technology, this is also the decade that saw the advance of
wireless internet connections, as well as the iPhone and iPad from Apple, the first two
mobile devices that made such significant progress into market share that they changed
the face of personal computing forever.
➢ The added mobility of technology only made e-business more accessible, leading to an
increased popularity among consumers.
• Since online commerce was relatively new, and growing quickly, many
companies jumped into e-business with large investments but no idea of
what to actually do to manage and grow the investment. Stock prices
soared, then plummeted, and a number of companies that lacked solid
plans and online strategy failed.
•
➢ This segment also saw the foundation of money made through digital media itself.
YouTube and Facebook began to sell advertising space as they grew.
➢ Although e-books had existed in a number of forms since the 1980s, the original Kindle
was released in 2007 as electronic books became their own significant kind of media.
Likewise, although forms of music were available prior to this decade, the growth of MP3
sales and digital downloads of new songs and albums released in these years increased
substantially.
•
The 2010s: Growth and Evolution
➢The most recent decade saw both significant growth and significant change in e-
business.
➢While the previous decade allowed stores that couldn’t afford a physical shop to
develop an online presence and make sales, the 2010s saw many businesses
with online presences invest money into brick-and-mortar shops to capitalize on
a local and extended market.
➢Other companies with solid online and physical retail presences worked to unite
the two, with concepts like physical pickup of an online order or free shipping to a
local store.
➢Companies also came up with new kinds of e-business, like subscription boxes or
software packages that include ongoing services, which introduced new avenues
of competition to previously established markets.
Advantages of E-Business
1. E-Business Saves Money
2. Better Communication and Faster Decision-Making
3. Cheaper Marketing, More Control
4. 24/7 Availability
5. More Avenues for Making Money
6. E-Business Means Freedom
7. Customer Profiling
8. No Location Disadvantage
Functions of E-Business
E-Business Applications
➢ e-bidding/e-auction : Many shopping sites such as airline tickets, etc. have ‘Quote your price’,
wherein one can bid for the goods and services online. It also provides the facility for e-tendering
under which quotation can be submitted online.
➢ e-trading: It involves trading of securities like shares and other financial instruments. The securities
are bought and sold online.
➢ e-procurement : It involves sales transactions between business firms through internet. It includes
‘reverse auctions’ and ‘digital market places’. Reverse auction facilitates online trade between a
single business purchaser and many sellers. Digital market places facilitate online trading among
multiple buyers and sellers.
➢e-delivery : It involves electronic delivery of photographs, videos, journals
and other multimedia contents to the user’s computer. It also involves
rendering various consulting services like legal, medical, accounting, etc.
electronically.
➢e-communication/e-promotion : It involves advertisement through
banners, pop ups, customer surveys, opinion polls, publication of online
catalogues, displaying images of goods, etc.
Scope of E-Business
1. As information sharing is the major part of the corporate industries, networking has
given boost to E-Business. This change in viewpoint has opened door for new
opportunities.
2. Selling can be focused to the global customer
3. Commercial transactions: ordering, delivery, payment
4. Transport and logistics
5. Automatic trading of digital goods
6. Accounting
7. Dispute resolution
Goals of E-Business
1. Reduced Cost
2. Lower Product Cycle Time
3. Faster Consumer Response
4. Improved Service Quality
Framework of E-Business
Service Enabling Infrastructures
E-business infrastructure refers to the combination of hardware such as
servers and client PCs in an organization, the network used to link this
hardware and the software applications used to deliver services to
workers within the e-business and also to its partners and customers.
Infrastructure includes the architecture of the networks, hardware and
software and where it is located. Infrastructure can also be considered
to include the methods for publishing data and documents accessed
through e-business applications. A key decision with managing this
infrastructure is which elements are located within the company and
which are managed externally as third-party managed applications,
data servers and networks.
Internet Technology
1. The Internet refers to the physical network that links computers across
the globe. It consists of the infrastructure of network servers and
communication links between them that are used to hold and transport
information between the client computers and web servers
2. Client/server : The client/server architecture consists of client computers,
such as PCs, sharing resources such as a database stored on a more
powerful server computer.
Internet service provider (ISP): A
provider providing home or business
users with a connection to access the
Internet. They can also host web-based
applications.
Backbones: High-speed communications
links used to enable Internet
communications across a country and
internationally.
Physical and network infrastructure components of the Internet
Hosting of web sites and e-business services
Hosting provider : A service provider that manages the server used to
host an organization web site and its connection to the Internet
backbones.
Web Technology
• World Wide Web (WWW) → The most common technique for publishing
information on the Internet. It is accessed through web browsers which display
web pages of embedded graphics
1. easy to use
2. Interactivity
3. provide a graphical environment supporting multimedia
4. standardization of tools and growth in demand
5. Flexibility in the style of designs and tailoring
Web Browsers and Servers
• Web browsers: Browsers such as Mozilla Firefox or Microsoft Internet
Explorer provide an easy method of accessing and viewing
information stored as web documents on different servers
• Web servers: Store and present the web pages accessed by web
browsers.
E-Commerce Building Blocks
Four key building blocks
1. Common business services infrastructure
2. Message and information distribution
3. Multimedia content and network publishing
4. The Internet (infrastructure)
Two supporting pillars
1. Public policy (“governance”)
2. Technical standards
Business Applications
1.Retail and Wholesale
2.Online Marketing
3.Finance
4.Manufacturing
5.Online Booking
6.Online Publishing
7.Digital Advertising
8.Auctions
