Basics
and
Learning objectives
In this chapter, student should be able to:
1. explained e-commerce and related concepts;
2. identified how the Internet has enabled e-commerce;
3. enumerated the typical categories of making business
digitally;
4. discussed the advantages and disadvantages of digital
business,
5. mastered the technical and economical challenges when
doing business electronically.
E-Commerce Defined
Electronic commerce, commonly written
as E-Commerce, is the trading in products or
services using computer networks, such as
the Internet.
Electronic commerce draws on technologies
such as mobile commerce, electronic funds
transfer, supply chain management, Internet
marketing, online transaction processing,
electronic data interchange (EDI), inventory
management systems, and automated data
collection systems.
E-Commerce Defined
Modern electronic commerce typically uses
the World Wide Web for at least one part of
the transaction’s life cycle, although it may
also use other technologies such as E-Mail.
E-Commerce businesses may
employ some or all of the
following:
Online shopping websites for retail sales
direct to consumers,
Providing or participating in online
marketplaces, which process third-party
business- to-consumer or consumer-to-
consumer sales,
Business-to-business buying and selling,
Gathering and using demographic data
through Web contacts and social media,
E-Commerce businesses may
employ some or all of the
following:
Business-to-business electronic data
interchange,
Marketing to prospective and established
customers by E-Mail or fax (for example, with
newsletters),
Engaging in pretail for launching new
products and services.
Pretail
Pretail (also referred to as pre-retail, or pre-
commerce) is a sub-category of E-Commerce
and online retail for introducing new products,
services, and brands to market by pre-
launching online, sometimes as reservations in
limited quantity before release, realization, or
commercial availability. Pretail includes pre-sale
commerce, pre-order retailers, incubation
marketplaces, and crowdfunding communities.”
(Wikipedia 2015)
E-Business
“Electronic business, or 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.
E-Business
Electronic commerce focuses on the use of ICT
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 team in 1996.”
(Wikipedia 2015)
Digital Economy
“Digital economy refers to an economy that is
(substantially) based on computing
technologies.
The digital economy is also sometimes called
the Internet Economy, the New Economy, or
Web Economy.
Increasingly, the “digital economy” is
intertwined with the traditional economy
making a clear delineation harder.” (Wikipedia
2015)
E-Commerce Defined
Comprehensively
To come to a final definition of E-Commerce let
us start with some constituent attributes of E-
Commerce:
1. Digitalization of business
2. Focus on business processes
3. Usage of a global network
4. New potentials and opportunities for
cooperation:
E-Commerce Defined
Comprehensively
1. Digitalization of business
This means a comprehensive usage of ICT (Information &
Communication Technology) not only within a business
organization (as it has been done during the last decades
by traditional (internal) information systems), but now
through a more and more seamless linking and cooperation
of information and communication systems of all involved
business partners.
The comprehensive usage of ICT has been enabled by
some technologies and technical standards, which have
E-Commerce Defined
Comprehensively
2. Focus on business processes
We support business processes, of course, as we did it for
the last decades, but now the total processes, running
through several organizations and crossing their
boundaries, are supported.
We automate business processes not longer only within
organizations, as it was “the” traditional objective of ICT,
but now the automation is related to the total process,
running through all involved organizations, and not only to
the sub-process within the own organization.
E-Commerce Defined
Comprehensively
2. Focus on business processes
We increase the speed of business processes. Additional
potentials can be realized with the coupling of processes
between different organizations.
We increase the economic efficiency of business processes,
again through coupling of business processes at the
boundaries of the business partners.
E-Commerce Defined
Comprehensively
3. Usage of a global network
Internet plays a dominant role and has become a universal
technical infrastructure. Thus, it builds a global virtual
place where every organization and person being
interested in making business can come together without
geographical and time restrictions.
Global networks allow the exchange of information without
any restrictions in time and independently from any
geographical distances.
E-Commerce Defined
Comprehensively
4. New potentials and opportunities for
cooperation
More or less independent persons and/or organizations
work together.
Business actors can come together whenever they want it
or whenever there is a need.
E-Commerce is the exchange of goods and
services between (usually) independent
organizations and/or persons supported by a
comprehensive usage of powerful ICT
systems and a globally standardized
network infrastructure.
For this purpose the business partners have to couple their
business processes and their ICT systems. These systems
have to work together temporarily and seamlessly and
have to share, exchange and process data during the
whole business process and across the boundaries of the
cooperating organizations.
Data security and data privacy
as well as the compliance with
laws and other policies and
procedures have, of course, to
be guaranteed.
E-COMMERCE WITH THE “5-C-
MODEL”
Another approach to define and explain,
what E-Commerce is, comes from the so-
called 5-C-model (Zwass 2014). It
defines E-Commerce by five activity
domains whose denominations start with
the letter “C”:
1. Commerce
2. Collaboration
3. Communication
4. Connection
5. Computation
1. Commerce
In the electronic marketplaces there is
a matching of customers and
suppliers, an establishing of the
transaction terms, and the facilitation
of exchange transactions.
With the broad move to the Web-
enabled enterprise systems with
relatively uniform capabilities as
compared to the legacy systems, a
universal supply-chain linkage has
been created.
2. Collaboration
The Web is a vast nexus, or network,
of relationships among firms and
individuals.
More or less formal collaborations are
created or emerge on the Web to bring
together individuals engaged in
knowledge work in a manner that
limits the constraints of space, time,
national boundaries, and
organizational affiliation.
