Influence of E-Business on Various Business Features - Essay Example

? Influence of E-Business on Various Business Features Influence of E-Business on Various Business Features “The digital enablement of transactions and processes within a firm, involving information systems under the control of the firm, which doesn’t include the company’s revenue” – Laudon and Tracey E-commerce nearly rules the world today. E-Business is a wider prospective of ecommerce. E-commerce covers only the revenue generating aspects of a company while E-Business covers both revenue- generating and non-revenue generating aspects of a business like inventory management and warehouse facilities. There are different types of e-business methods. The most famous ones are Business-to-Business (B2B), Business-to-Consumer (B2C), Mobile or m-Commerce and Consumer-to-Consumer (C2C) business. The B2B model is the most famous amongst all the e-business models (Rahulshams, 2011). Effects of E-Business on Project Management Business to Business or B2B has changed the entire project management strategies. Earlier a company has to manufacture products and sell them. They have to come up with efficient marketing plans to sell their products and a detailed project management report. But, e-business eliminated such needs completely. Websites providing B2B and B2C services like the Elance.com and Ebay.com influenced the way business was done like never before. The importance of project management got reduced greatly because of e-business. Positive effects: E-business reduced the dependability on project management saving billions of dollars spent on planning and executing a core plan. Negative effects: E-business paved way for any person to become a master with some software. Those who just preferred e-commerce without giving importance to core e-business strategies failed drastically leading to the burst of the dotcom bubble very soon. Huge companies like Ebay.com and Amazon succeeded mainly because they were able to integrate all core process related to their business starting from inventory to customer details and the products stock details together in a secure way using various e-business features. Small companies which failed to provide such e-infrastructure failed mainly because of information mismanagement and the inability to gain customer satisfaction. Effects of E-Business on Supply Chain Management Traditional way of doing business involved purchasing goods from suppliers, storing them in a warehouse, transporting them to the shops where it will be sold to the customers. E-business eliminated the need to maintain separate warehouses. Huge companies like Wal-Mart switched to e-business many years before they established a website for themselves and entered e-commerce. They started by automating the inventory and supply chain process. The suppliers bought in packed products directly to the stores, eliminating the need for a separate warehouse and the transporting necessities. Their supply chain management underwent major changes under the influence of the IT sector. Positive effects: Changes made by Wal-Mart in their supply chain management influenced many other industries to follow the same. The traditional way of storing goods in warehouses started to dwindle slowly. Many industries like healthcare started to invest millions in training their suppliers to follow a uniform standard. More value was given to adding value to the goods rather than labelling it or sticking to the process. For example, consider the logistics industry. Earlier companies like Blue Dart and Fed Ex used to transport goods directly with their label. Nowadays they use the services of various freight forwarding agencies to transport goods as fast as possible. Speed is the added value here and importance given to transport goods under a particular label is reduced. The supply chain management process is changed using advanced technologies to make the procedure much easier to manage and provide a better service to the customer. IBM conducted a detailed research on how various industries gradually switch to modern e-business oriented supply chain management from their traditional supply chain management. The results are shown below in a chart. Negative effects: E-business has altered supply chain management in such a way it has cut down many jobs in transporting goods and warehouse management. It increased the overall administration cost for the companies as the automating process were very costly initially. But, in course of time, most of the companies switched to electronic supply chain management for ease of access and the need to manage huge data. Even huge companies like SAP appointed hundreds of IT experts and software engineers to automate and modernize their supply-chain managing process irrespective of the cost (Gilbert, 2004). How E-Business affects Manufacturing and Retailing The retail industry was one of the first industries to switch to E-business. Huge retail shops like Wal-Mart ventured into E-business way back before globalisation. They retail industry, especially the apparel section which serves as the 3rd largest revenue generating category in the retail sector transacted nearly $20. Billion ways back in 2003. A decade has passed and the amount generated through online apparel sales keeps increasing steadily (Tuunainen & Rossi, 2002). But still, only 7% of the total apparel sales occurring in the world take place through the online sites. It is a well known fact that business where the customers like to touch and feel the products usually do not succeed in the internet. On the other hand businesses which manufacture goods like books flourish online. While the customers miss the chance of feeling the fabric and trying it on when they purchase it online, they get the facility to read chapters from books and preview various pages of it when they purchase them online. Several toy stores failed in the online business just because the kids did not like selecting products without looking at them directly or touching them. The manufacturing industry too underwent several changes. A person need not be a manufacturer anymore to own a company. Consumer to Consumer (C2C) businesses like auction sites, Olex.com etc are thriving just by acting as middlemen. There are several share market companies which gain great profit through the C2C method. Consumers who want to sell a service or a product directly advertise on the auction sites or sites like Olex.com for free or very little cost. They gain major revenue though the advertisements. Further affiliate marketing, which became quite famous after the inception of internet, affected the manufacturing industries multitude in several different ways. It created several sellers for one manufactured item. Companies manufacturing goods are actually very less in today’s market compared to the number of people ready to sell them worldwide. E-Business severely affects vertical integration of manufacturing and its planning and controlling systems. This is established by introducing new means of communication, speedy delivery, price flexibility and many other new means. In short we can say, the actual factories dealing with producing goods does not experience much change but the marketing department related closely with manufacturing experienced great changes (Olhager & Rudberg, 2003). Positive effects: E-Business enhanced the co-operation between the marketing and the manufacturing department. E-Business opened new platforms for retail industries. Negative effects: There is no proper way to check the quality of the goods sold by affiliates. Customers are entitles to compromise on the standard of the product, no matter how famous the online store may be. There is no streamlined process for goods exchange in many online stores. E-Business and the Entertainment Industry E-Business affected the entertainment industry more than any other sector. Magazines, gaming industry, music, books, movie every category of the entertainment industry had to reform themselves to suit the changing needs of their customers. Here is a porter’s five forces analysis done on the entertainment industry in e-business. The diagram states the threat from the new entrants is potentially very high because any person with an interesting idea can transform it into a game quite easily these days. The threat from digital products like the smart phone is also very high as they come with several new applications for a very low cost every day. Digitization of media and globalization provides various choices to the customers. Consider the Spiderman series. A person can simply choose to buy a comic book online, download the cartoon, or choose to play the game version of the series. Every form of the series is accessible to them at their finger tips at a very low cost. They can choose to read, view or play them on their Computer, smart phone or gaming device. There are several versions for each games and books. Any person clever enough to create a new version of one famous game can make good money. Telecom and patient regulations cannot control them much (Loebbecke & Powell, 2002). The entertainment industry made use of e-business better than other industries. Instead of indulging in e-commerce like the retail industry, the entertainment industry indulged in full fledged e-business right from the beginning. They maintained all their inventory and transactions online. Though many game creating firms faced some challenges initially, they overcame them with the help of technology rather than using the traditional methods. They introduced varied version of the products and games in several different media starting from mobiles to applications which work on various different OS. If a game became famous in the iOS or Symbian OS, another version matching the Android OS will be available very soon. If a game or an application fails to make an impact, a modified version of the same with improved features will be released soon. Similarly, if a book or a music piece becomes quite famous, it can be downloaded so easily in the web for free or a petty cost very quickly. Several million downloads will be done by the time, they are blocked effectively. The regulations regarding the copyright as well as the patents are often given little importance. Entertainment has been transformed into something linked with the computer and the smart phone rather than enjoying a show in a theatre or playing in a park. E-Business helped the gaming industry and the mobile applications field grow enormously in a very short period, transacting billions of dollars. E-business also led to the growth of several web related security oriented services which paved way for secure online transactions. Positive effects: Many of us know Gangnam Si. He used the internet to become a popular entertainer. YouTube which was blamed for piracy got a whole new face after his success. Several people like Si used it to increase the views of their performances and become famous. Any art piece, music or movie which gains more number of views in internet is considered as the most famous one, though it does not bring the creator much monetary benefits. The review about a product can be found immediately online no matter it is a painting or a movie. People get a chance to know the critical review of the experts in the field in a very short time. Such facilities started to appear in the magazines, but became quite popular only with the online review sites. Negative effects: Creative piracy has grown into a major issue, no matter how hard the law tries. Major games, music compositions and movies which had been created spending millions of dollars are available free for anybody who knows how to use the torrent sites. This creates a significant loss to the entertainment industries revenues every year. Small scale artists struggle a lot because of this monetary loss. On the other hand the websites getting famous by presenting entertainment torrents for download earn a lot from their memberships as well as the advertisements in a very short time. Proper laws are yet to be enforced strictly. E-Business paves way for several security issues. Even huge companies like Amazon get affected by viruses now and then. The critical details about their customer’s cards can be used in devastating ways if stolen. The Evolving Trends of E-Business Business was done just by transacting goods without the use of money or coins in the old age. As time progressed, various coins and currencies started to rule the world. The era of credit and debit cards followed which lasted still. The beginning of the 20th century saw the introduction of huge malls. The beginning of the 21st century saw the inception of huge online malls controlled entirely by the e-business. This change is the reflection of time and growth in technology. It has both positive and negative effects. While e-business cut down many labour oriented jobs, it created thousands of hi-fi jobs paying the software engineers heavily. It automated several processes making our life much easier and happy. We can only hope it evolves to the best in future. References 1. Rahulshams. "E Business and Supply Chain Management" StudyMode.com. 09 2011. 09 2011 . 2. Gilbert, Alorie. “SAP gets new business apps rolling”. Cnet.com. 30 October, 2003. 2 December, 2013. . 3. Olhager, Jan & Rudberg, Martin. “Manufacturing strategy and e-business: an exploratory study”. Emerald Insight.com. 2003. 2 December, 2013. < http://www.emeraldinsight.com/journals.htm?articleid=850986> 4. Loebbecke, Claudia & Powell, Philip. “E-business in the entertainment sector: the Egmont case”. August, 2002. 2 December, 2013. 5. Tuunainen, Virpi Kristiina Tuunainen & Rossi, Matti. “E-Business in Apparel Retailing Industry – Critical Issues”. 6 June, 2002. 2 December, 2013. Read More