Notes on Emerging Modes of Business

E-Business

E-Business means conducting the activities of industry, trade and commerce through computer networks. 

E-Business is wider than E-Commerce. E-Commerce only involves buying and selling of goods over the internet. But, E-Business includes E-Commerce as well as other electronically conducted activities such as production, finance, human resource management, inventory management, etc

Scope of E-Commerce:

1. B2B Commerce: It involves transactions among different business organisations.
2. B2C Commerce: It involves transactions between business and customers.
3. C2C Commerce: It involves transactions among customers.
4. Intra B Commerce: It involves transactions within a business.

Difference between traditional business and e-business:

Basis	Traditional Business	E-Business
Ease of formation	Difficult	Easy
Cost of setting up	High	Low
Operating Costs	High	Low
Business process and length of cycle	Long time	Shorter
Ease of going global	Less	More
Physical presence	Required	Not required
Location requirement	Important	Not important
Personal touch	More	Less
Transaction risks	Low	High
Employees	Semi-skilled or unskilled	Technically and professionally qualified
Contact with suppliers and customers	Indirect (through intermediaries)	Direct

Benefits of E-Business:

1. Ease of formation and Lower investment: The formation of e-business is very easy as compared to other business. Lower investment and lesser procedural requirements are required for setting up e-business. 
2. High Speed: E-business offers the benefit of high speed because transformation through internet is very fast. 
3. Convenience: E-business is available at any time and from anywhere. 
4. Global Reach: Internet is boundary less. It allows the seller an access to the global market and also provides a wider options to the buyer to choose products from any part of the world.
5. Moving towards paperless society: In e-business, most of paper communication is replaced by electronic communication. 

Limitations of E-Business:

1. Low Personal Touch: E-Business lacks personal touch. There is no personal contact between the seller and buyer. The buyer can not touch and feel the product before buying it. Hence, it may not be suitable for products such as garments, jewellery etc.
2. Increased Risks due to anonymity and non-traceability of parties: Transactions over the internet involves risks because it is difficult to establish the identity of the parties.
3. Incongruence between order taking/giving and order fulfillment: Physical delivery of the product may take time. Also, sometimes due to technical reasons, websites take very long time to open. 
4. Need for technologically competent parties: For conducting e-business, such people are required who are competent and skilled in using computer and technology. 
5. People Resistance: Many people resist e-business due to the stress and insecurity about adjusting to new technology and new modes of doing things. 
6. Ethical Fallouts: In e-business, many companies keep an electronic eye to keep track of the computer files and websites visited by their employees or others. 

E-Business Risks:

Following are the risks involved in E-Business:

1. Transaction Risks: Online transactions are subjected to following transaction risks:

1. Default on order taking or giving: It may happen that buyer denies that he has placed the order or the seller denies that the buyer has placed the order.

2. Default of payment: It may happen that the buyer claims that he has made the payment but the supplier has not received the amount. 

3. Default on delivery: It may happen that goods are delivered at wrong address or wrong goods are delivered. 

2. Data Storage and Transmission risks: Other main risks associated with e-business are VIRUS and hacking. 

VIRUS (Vital Information Under Seige) is a program which replicates itself on the other computer systems. 

Hacking means unauthorized entry into a website. 

3. Risks to Threat to Intellectual Property Rights: Once the information is available over the internet, it becomes difficult to protect it from being copied. 

Steps involved in Online Transactions:

1. Registration: The first step involved in online transaction is to get registered i.e. to have an account with the online vendor. 

2. Placing an Order: The next step in online transaction is to place order. The buyer browses the online store, picks and drops the items in the shopping cart. 

3. Payment Mechanism: The payment for the products bought online can be made through various ways:

1. Cash on delivery

2. Cheque

3. Net banking

4. Debit or credit cards

5. Digital cash

Resources required for successful implementation of E-Business:

1. Adequate computer

2. Well-developed telecommunication facilities

3. Well-developed website

4. Technically qualified and trained workforce

5. A good system of making payment