Custom «E-Commerce» Essay Paper Sample
Every business organization is globally affected by e-commerce or e-business and the World Wide Web will continue being a vital requirement for any business entity that will strategize towards increasing its sales and reducing the costs. The use of the internet has brought tremendous change in the way business is done and as a result of this change, many business entities have been in one way or another been affected. Previously, the use of the internet was majorly limited to academic use through searching of information, but as of recent times, the use of the internet has been unlimited and has proved useful to business entities which use it for e-business (Schneider, 2009, p.15).
The use of the internet has revolutionized the way in which organizations are operating all over the world. The World Wide Web has been used by organizations to collaborate, obtain, communicate, provide and share information. But it is e-commerce that has grabbed the headline of around each and every media all over the world. Through e-commerce, a business entity is able to promote, market, buy and sell its goods and services via the internet which has of late experienced tremendous growth. The use of e-business by small businesses has grown from 10 per cent over the last ten years to 75% this year. This is therefore enough prove that selling online is a better method of doing business (Andam, 2008, p. 35).
E-Commerce also known electronic commerce, refers to the buying and selling of products via electronic means like the internet and other computer networks. In general, E-commerce therefore refers to all business activities which use the internet technologies. The widespread use of the internet has tremendously increased the amount of trade done electronically (Schneider, 2009, p.5). Though some people use e-business and e-commerce interchangeably, the two terms are distinct in that in E-commerce, ICT (Information and Communications Technology) is normally used in inter-organizational business transactions and in transactions among business organizations and individuals. On the other hand, e-business is used in enhancing one's business and it includes any process which a business entity; be it a governmental, non profit, or profit performs its activities through a mediated computer network (Schneider, 2009, p.10).
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The effects of E-commerce or e-business have been profound on the whole society. Individuals can now, by the use of e-business, be able to shop online in the privacy of their houses without physically going to the traditional markets. The use of E-commerce on the other side, will force small businesses to either completely shut their premises or adopt the use of e-business because e-commerce has completely changed the way retail business is conducted and the way people purchase and spend their money. For many years to come, e -commerce will continue to influence how businesses sell and market their products and how people will choose to make purchases (Baiker, 2007. p. 80).
Because of the emerging global economy, many business entities will stand to gain a lot of benefits because of adopting e-business and e-commerce because they have become increasingly necessary tools of business strategy and spurring economic development. The relationships between organizations and individuals has been greatly been revolutionized through the integration of information and communication technology in business entities. The distinctions between traditional markets and worldwide electronic market place like the capital size of the business will gradually be narrowed down because of the web based technologies and the internet in general. The adoption of e-commerce by a business entity will therefore encourage greater participation by the customers, enhance business productivity and reduce costs (Plunkett, 2009, p.83).
The development of e-business or e-commerce for a business entity which has no significant e-business activity will enable the firm to improve customer satisfaction, reduce the costs and help in finding new markets for the organization's goods and services through the use of information and communication. There exists a great difference between the traditional business entities and the e-business systems because businesses which operate e-commerce projects in most instances will not evaluate or appraise them using traditional systems. Because of increased technological innovations, business entities with little or no e-business activities will therefore have to rethink their business strategies via e-commerce as a result of its new capabilities and cultures. The use of the internet will enable businesses to be able to buy goods and services from other businesses over the World Wide Web or the internet. Businesses will be able to sell their goods directly to their customers (e-retailing) through the use of the internet (Schneider, 2009, p.25).
The development of e-business in an organization which has little or no significant e-business will have some impacts on the organization and its infrastructure. The company will need to quickly adapt to the new technology which will offer the organization a chance to experiment with new services, products and processes. The invention of these new technologies in an organization with no or little e-business activities will therefore require it to invent new organizational processes. For example, the structure of the organizational unit that deals with e-commerce may differ from the conventional marketing and sales units.For the organization to be more responsive and flexible to the market, then it has to put in place new processes and it is such kind of processes change that must be clearly planned and managed (Goseelin, et al, 2009, p.85).
An organization with no significant e-business activities wishing to develop e-business from scratch must be aware of work and employment since they will be changed into the digital age. The introduction of e-business in such a firm will therefore lead to reduction of employees and general staff in organizations because companies will want to outsource cheap labor from other countries through electronic means. It is such changes that will create new opportunities and risks that will force organizations to think more about careers, jobs and salaries. Because of e-commerce, workers in the digital age will therefore be more flexible and not all of them will secure jobs in the traditional form (Schneider, 2009, p.145).
The adoption of e-business by firms which have limited e-business activities will require special accounting and financial systems. The traditional payment systems used by the organization are inefficient and ineffective and therefore they cannot be used for electronic commerce. Legal issues and agreements based on international standards are some of the impacts the organization will face because of using new payment systems like electronic cash which are complicated. The use of electronic cash that is backed with currency and other assets will change the way payments will be made. The pluralism and diversity of electronic cash is based on the internet and therefore it could change the financial lives of clients and change the foundations of governments and financial systems (Baiker, 2007. p. 85).
With e-commerce, online businesses are in position to share and transfer their brand benefits via affiliate cooperative and marketing efforts among different brand owners. The use of e-business has therefore become a vital driving force towards the adoption of technologies such as e-marketing, e-store, radio frequency, e-procurement and reverse auctions as applied in the supply chain management practice. With e-business, organizations with little or no significant e-business activities will be able to use the World Wide Web to perform things that they had never before done like for instance, creation of virtual communities like social networks, serving as web portals and operation of auction sites (Schneider, 2009, p.28).
Such organizations will also be able to use the internet through web auction sites to enable them sell goods to their clients and gain advertising revenue. The use of e-business by organizations will therefore lead to an increase in sales and a decrease in costs. E -business will also enable an organization to advertise its goods to potential customers spread in different nations in the world. With the establishment of virtual communities on the internet, an organization with little or no business activities will stand to gain a lot from the use of e-commerce because it will be easy to reach the small groups of customers who share a common interest but are geographically scattered. The use of e-business will increase the accuracy and speed at which business entities can share information thus reducing costs of transacting for both sides (Schneider, 2009, p.120).
Businesses that will chose to adopt E-commerce in their entities should be aware of the security threats that are involved as a result of adopting this technology and therefore know the counter measures to be taken. Counter measures should be used by business entities that have adopted e-commerce so that the security of the communication channels, client computers that are attached to the server and the web servers in general are well protected. Encryption and digital certification alongside a written security policy are essential in a business wishing to adopt the use of e-commerce or e-business (Plunkett, 2009, p.105).
For the safety of the organization and of business transactions done through e-business, business translators should be authenticated and there must be controlled or limited access to resources like web pages for selected or registered online users. Data and information involving e-commerce should be encrypted to ensure the effectiveness and the privacy of the transactions. The use of the Secure Sockets Layer (SSL) as a security technology that is built into leading browsers will minimize the risks involved in transacting business by e-commerce.
For the security and confidentiality of the use of e-business, keys are passed between the client browser and the internet server through the use of a public key in which transactions between a user and the web server being used are normally encrypted. To minimize costs, a business planning to use e-business can be able to use the host websites of businesses which use secure servers and certificates in order to secure their business transactions. However, to maintain the trust of customers, it is advantageous for a business entity to buy its own key in order to secure pages that are consistent and relevant to its site (Baiker, 2007. p. 75).
For a business seeking to adopt the use of e-business, there exists a number of challenges which must be fought in order to ensure the success of the electronic transactions. The increased number of competitors has made many B2B companies to fade away. This increase in competition and the low barrier to entrry makes it hard for new business to venture into e-businesses. Organizations using the traditional means of doing business will also be faced with the challenge of hosting their own websites. They are normally compounded with three options of either hosting their websites with a service provide, with a portal site like Yahoo or host their own websites. Portals will require that such organizations pay some monthly fee in order for them to perform tax calculations, payment processing, collect statistic and maintain the site. These portals, could over time, become expensive, cumbersome and tedious incase the order volume increases. Since the portal storefronts do not normally grow with the business, this can be a major let down for businesses and therefore it is recommended that businesses which want to adopt e-business should host their own websites (Schneider, 2009, p.45).
For developing businesses to effectively adopt the use of e-commerce and e-business and gain increased participation on the global market, there must be improvement of the underdeveloped information infrastructure. Areas for policy interventions like for instance, the high costs of internet access, hosting charges and communication fees must substantially be reduced. Insufficient security safeguards, underdeveloped transportation infrastructure and inadequate professional Information Technology workforce must be promptly be dealt with in order for the business entity to conveniently use e-commerce and e-business (Schneider, 2009, p.180).
E-commerce or e-business is therefore a powerful tool which is recognized in the information age to aid in the economic growth of any business entity. The use of E-business promises better businesses and sustainable economic growth for small and medium enterprises. The business interaction by different parties electronically rather than by direct or physical contact enables business transactions to be done promptly and therefore saving time and costs that could have been used through physical exchange of business transactions. Since e-commerce uses digital and electronic information/communications processing technologies in business transactions in order to transform, redefine and create relationships aimed at value creation among organizations and between organizations and individuals, the use of e-business will exceed the use of traditional systems in a number of ways (Baiker, 2007. p. 85).
The use of e-commerce is categorized according to the type of parties which are participating in the business transactions. In general, there exists five e-commerce categories namely the business to business, business to consumer, consumer to consumer, business to business and business to government. The mostly commonly types of business commerce conducted include the Business to consumer or B2C, the Business to business or B2B and the transactions and business processes in which governments, companies and other entities use the internet to enhance their selling and buying activities.
Any non-electronic business entity that may decide to adopt e-business or e-commerce in its operations can stand to gain a lot of benefits like for instance having reduced costs as a result of reduced paper work, reduced labor, reduced postage costs and reduced errors which occur as a result of typing data. The business entity will also reduce the time spend in payments and delivery of goods and services since transactions will be done electronically rather than manually. As a result of e-business, the business entity will be in position to handle complex product ranges, situations and customer profiles comfortably because of the electronic systems.
As a result of improved communication between customers and other business partners, there will be an improved client and trade partner relationship because of adoption of best practice e-business. Unlike the traditional markets, the internet through the use of e-business or e-commerce has a greater potential of expanding the business entity into wider geographical areas since the internet is a network of network all over the world.
The use of Electronic Fund Transfers (EFT) will make online shopping to be possible for both individual and business entities which will adopt e-commerce or e-business. The use of EFT by banks to transfer information concerning accounts through private communications networks is enough prove of the existence of e-commerce for years back. The use of Electronic data Interchange (EDI) by businesses for many years is also an example of e-business or e-commerce in which business can be able to exchange data in computer readable standard format to other business entities.
It cannot therefore be denied that many business entities are moving from the traditional means of doing business to electronic systems of doing business through the use of the internet. E-business despite having some challenges has proved to be the way to go for businesses entities strategizing to cut their operational costs and increase their market base. Major risks involved in adopting e-business should be minimized so as to encourage business using the traditional systems of being business to be better placed in adopting the use of e-business. All in all, the benefits of adopting the use of e-business by entities with no or little e-business activities outweigh the disadvantages. Businesses should therefore aim at eliminating the traditional business systems with a view of adopting e-business which is continually growing day by day.
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