E-Business Enterprise Applications

E-Business Enterprise Applications encompass the electronic processes used by organizations to buy and sell goods and services, leveraging information technology and the Internet to enhance traditional business practices. This modern approach allows businesses to operate beyond geographical constraints, accessing a global market for their products. E-business includes various applications, notably in the business-to-consumer (B2C) sector, such as online retailing, electronic storefronts, and electronic markets, which facilitate consumer transactions via company websites.

In addition to B2C applications, e-business also involves business-to-business (B2B) interactions, where enterprises engage in electronic procurement, manage supply chains, and utilize electronic exchanges to streamline their operations. These applications enhance productivity, reduce costs, and improve customer responsiveness by enabling faster transactions and better information sharing. With tools like web analytics, businesses can better understand customer behavior and optimize their marketing strategies. As e-business continues to evolve, it represents a critical element of contemporary commerce, combining traditional business practices with innovative digital solutions.

Published in: 2021

By: Wienclaw, Ruth A.

Subject Terms

E-Business Enterprise Applications

With the explosion of information technology and the Internet over the past few decades, an increasing amount of business is being conducted over communications networks. E-business is the process of buying and selling goods or services electronically rather than through conventional means and includes the support activities and transactions necessary to perform these tasks. E-business can reduce the need for service technicians, increase the responsiveness of the business to the needs to the customer, and allow businesses to add new features to their products and services. Business-to-customer applications include online retailing and electronic storefronts, electronic markets, portals, and online services. In addition, information systems can facilitate businesses in dealing with other business electronically through such applications as supply chain management, electronic procurement, and electronic exchanges.

With the explosion of information technology and the Internet during the late twentieth and early twenty-first centuries, the normal paradigm of business has changed. Once constrained by communication boundaries in the not-too-distant past, business transactions were only conducted in person or via e-mail, fax, or phone. Since then, an increasing amount of business has been conducted electronically over public and private communications networks. The proliferation of information on the Internet makes it possible to research and compare similar products and features as well as obtain the best price available in seconds or minutes rather than in hours or days. In the comfort of one's own home, one can purchase electronics, furniture, books, music, and more. Rather than going to the grocery store, it is even possible to point and click one's way to a full pantry using online grocery delivery services that will bring food to one's doorstep. Clothing, too, can be purchased online with easy return policies and even virtual models that allow one to "try on" the clothes before purchase. Although these technologies are still evolving, they are mature enough that more and more people rely on the Internet to conduct at least some of their business. For business enterprises in the twenty-first century, e-business, or e-commerce is a fundamental method of conducting business.

The use of communications networks for conducting business is still not an all or nothing proposition. Companies can have both traditional capabilities as well as e-business capabilities. There are several different strategies that are taken by organizations that want to do some or all of their business online. The off-line focused strategy has a primary channel that is off-line with online marketing efforts playing only a supporting role. The off-line focused strategy may publish a website that provides customers with information about store hours and locations, describes the range of products that are sold, or offers customer service options. For example, grocery stores often allow customers to go online to read the weekly sales flyer, send a comment to the store or corporate manager, or find driving directions to the store, but one cannot buy groceries online. The off-line focused strategy is often used when a sophisticated distribution system is needed to provide goods, personal consultation services are offered that can only be done in person (e.g., interior decoration services), or there are contractual restrictions among the channel partners that prohibit more online involvement. Due to the nature of their goods and services, other organizations can primarily use the online channel for their marketing efforts while others only do business online using traditional marketing methods (e.g., television advertisements; infomercials) to point the customer to their website. This strategy can allow both the business and the customer to bypass the "middleman" or to take advantage of the lower costs associated with the online channel (e.g., no need for the overhead associated with a physical retail store).

E-Business

E-business is the process of buying and selling goods or services -- including information products and information retrieval services -- electronically rather than through conventional means. Although typically conducted over the Internet, e-business can be conducted over any public or private communications network. There are two types of e-business. Business-to-business e-business is the electronic marketing and selling of goods and services by one business to another. Business-to-consumer e-business is the electronic marketing and selling of goods and services by a business directly to the individual consumer.

There are many benefits of e-business. First, it enables a business to extend its geographic reach. With e-business, a business can literally have a global market. For example, software is not only sold over the Internet, but can be downloaded from the Internet, thereby eliminating the costs of delivery and packaging. Even for instances where the product needs to be physically delivered via a transportation carrier, e-business can facilitate a larger market. In addition, e-business increases the speed at which transactions can take place. Customers no longer have to wait in line to be served as they can complete their own transactions over a secure network. Transaction speeds are also increased because the customer does not physically have to travel to a store to pick up a product. Although the transaction speed is irrelevant if the customer still has to wait for delivery, for those items that are not available locally, time is still saved. Third, e-business can increase productivity. Before the advent of e-business, researching the characteristics of products was a labor-intensive task often requiring a search for review articles and trips from store to store to compare the features of similar products. Today, these activities can be done online for many products. This means that the information can be put to use more quickly and the decision made in a timelier manner. E-business also allows businesses to share information. Product specifications and users manuals can be posted online for customers to download; troubleshooting databases can also be made available to customers, or customer service can be available by e-mail or chat. These features can both reduce the need for service technicians and increase the responsiveness of the business to the needs to the customer. E-business can also enable businesses to add new features to their products and services. These can include personalization or automatic notification of updates, activities, or new products. Perhaps one of the most attractive advantages of e-business, however, is that it can significantly reduce costs for both the business and its customer. E-business allows customers to reach the business quickly and irrespective of geographic distance for purchasing, technical help, or customer service. These features can combine to give the e-business a competitive advantage over other businesses offering similar products and services.

Another advantage that e-businesses have over conventional businesses is the ability to use web analytics platforms to track usage of e-commerce websites, online advertising campaigns, and online promotions. Enterprises can then use this information to more effectively market their products and services to both B2B and B2C customers and prospects. There is some evidence, however, that few enterprises are taking full advantage of web analytics to analyze online activities. A 2012 study of business- to-business enterprises found that only 6 percent of marketers surveyed characterized their use of web analytics as "very effective" while only 7 percent of marketers surveyed stated that they were fully engaged with web analytics. Of the marketers surveyed, 44 percent were not at all engaged or only somewhat engaged with web analytics (Hosford, 2012).

Applications

There are numerous applications that an enterprise can use in order to facilitate e-business, whether it is selling to other businesses or directly to end users. Business-to-customer applications include online retailing and electronic storefronts, electronic markets, portals, and online services. In addition, information systems can facilitate electronic interaction between businesses through such applications as supply chain management, electronic procurement, and electronic exchanges.

Business-to-Customer E-Business Applications

Traditionally, shopping meant physically going to a store, searching aisles for products of interest, comparing product features, and purchasing. With the advent of information technology, customers frequently now have the opportunity to do these tasks electronically by shopping online.

One of the most common applications of business-to-consumer e-business applications is online retailing and electronic storefronts. In online retailing, customers are able to visit a business' website on the Internet and examine product pictures and information, compare different products, fill an electronic shopping cart, and checkout and pay for their purchases. The e-business equivalent of the storefront is the home page of the company's website, with the various web pages being the electronic equivalent of the aisles of a traditional store. Rather than going to a brick and mortar store, customers can visit the company's website and look for the items that they need. Most businesses engaging in e-business allow customers to "stroll the aisles" by having links to various categories of products. Walmart, for example, allows customers to go directly to apparel, baby, electronics, entertainment, home, jewelry, pharmacy, photo, sports, and toys. Amazon has dozens of product categories that customers can browse. Peapod, the online grocery store, allows customers various shopping options including browsing the aisles (e.g., going directly to the baking "aisle" and browsing the items there), express shop (which allows the customer to input a grocery list that the application software uses as key words to search the database so that it can present a list of options from which the customer can choose), and browse the current specials. In addition, most businesses also give customers the ability to search for specific items by various characteristics such as key words, title, product name, item number, or model number so that they can go directly to a specific product.

Another business-to-customer e-business application is the electronic market. These are collections of individual shops that can be accessed through a single location on the Internet. Electronic markets are the virtual equivalent of shopping malls and are also referred to as cybermalls or electronic malls. Just as in brick and mortar malls, the shops band together to offer convenience to the customer. This service can be attractive to customers who need a product or service but do not know where to find it. For example, Choice Mall offers shoppers products in a wide variety of areas ranging from arts and entertainment, beauty and fashion, and travel to home and family, professional services, and real estate. Within each of these general categories are hyperlinks to more specific categories. For example, under the "Travel Center" are listed agencies, cruise packages, discounts, general tours, and vacation resorts. If one wanted to find a travel agency, for example, one would click on the "Vacation Resorts" hyperlink, which would bring up a list of travel agencies participating in the e-market along with a brief description and a hyperlink to their home page.

In addition to shopping, a number of other services are available online. Through electronic banking, customers can access their accounts via a secure connection and conduct various banking transactions without physically going to the bank. For example, one can check to see if an electronic paycheck has been deposited, check on an account balance and transaction history, transfer money between savings and checking, and many of the other activities that one does in a bank. Electronic bank statements and scans of checks are also available online and can be used in place of paper documents, thereby saving money for both the bank and the customer. In addition to banking services, other personal financial services are available online. An increasing number of businesses such as credit card companies, utilities, and communications companies allow customers to view their statements and pay their bills electronically. Customers can pay their bills online instead of writing checks or can sometimes have the money automatically withdrawn from their bank account so that they do not have to be involved in the bill paying process at all (except, of course, to make sure that their account balance will cover the bills). Some companies also give their customers the option to receive their bills electronically rather than through the mail. Consumers are also able to invest, buy airline tickets, concert tickets, and book hotel rooms online.

Business-to-Business E-Business Applications

In addition to the opportunities afforded businesses in selling directly to consumers, information technology also enables businesses to do many traditional activities related to dealing with other businesses electronically. One of the areas that is being revolutionized by the application of information technology is supply chain management. A supply chain is a network of organizations involved in the production, delivery, and sale of a product. An organization's supply chain may include suppliers, manufacturers, storage facilities, transporters, and retailers, and includes the flow of tangible goods and materials, funds, and information between the organizations in the network. Each of the organizations in the chain provides a value-added activity to the product or service. Supply chain management is the process of managing the flow of these things within and between the organizations in the chain, a process facilitated through information technology. In supply chain management, all the parties in the network are linked together into a system where the functioning of each of these affects the functioning of the others. For example, if a supplier is late in delivering a component to the organization, it will affect the organization's ability to produce its product on time and may also affect the ability of the other organizations (e.g., transportation companies, storage companies, retailers) to perform their tasks in a timely manner. Enterprise applications are available to help organizations communicate within the supply chain, improve communication, and optimize the timeliness of deliveries.

In addition to supply chain management, information technology can also enable businesses to procure supplies and services electronically through the use of electronic procurement systems and electronic exchanges. Electronic procurement systems give employees access to the electronic equivalent of catalogs from multiple suppliers -- with whom the organization has often negotiated pre-approved prices. By using e-procurement systems, organizations can reduce purchasing costs, provide employee self-service, and increase their leverage with suppliers. E-procurement typically reduces costs as well as saves time by allowing employees to review catalog and other product information online in order to determine which vendor or product to use as well as to prepare and submit purchase orders electronically. Further, enterprise-wide e-procurement often allows organizations to aggregate their purchases from a single vendor, thereby increasing their purchasing volume and allowing them to negotiate better rates for goods and services. The basic paradigm for e-procurement is shown in Figure 1.

E-procurement software can put vendors' catalogs online for employees to use in choosing products and services. E-procurement application software can also allow employees to electronically submit purchase orders, automatically route purchase orders for approval when necessary, and eliminate the need for hard copy documentation. E-procurement software can also be used to generate end-of-month, quarter, or year statements that allow the organization to track its spending and enable them to streamline their purchasing and procurement activities.

Another application used by organizations in business-to-business e-business is electronic exchanges (also known as electronic markets or B2B hubs). These are sites on the Internet where buyers and sellers can come together to exchange information and buy and sell products and services. As shown in Figure 2, electronic interchanges may have one of three structures. Public exchanges (also known as independent exchanges) are electronic markets operated by third parties who operate the electronic market, display information, and provide the tools necessary to conduct e-business. Independent exchanges may be vertical (i.e., serving members of a specific industry) or horizontal (i.e., simultaneously serving businesses in different industries).

Consortia-backed exchanges are e-markets created by a consortia of traditional firms within an industry who band together to create a common forum for business-to-business transactions of goods and services. The common goal of consortia-backed exchanges is to drive down costs for all participants. Another electronic exchange structure is the private exchange. Participation in private exchanges is by invitation only. Private exchanges are structured around the needs of a specific sponsoring business and its trading partners. Private exchanges have several advantages over other types of electronic exchanges. First, the owners of these exchanges can regulate access to both buyers and sellers and have the ability to exclude competitors and their suppliers from the exchange. In addition, the owners of a private exchange can offer pricing incentives or alternatives to streamline business processes and benefit participants. Further, as opposed to public exchanges, most private exchanges can be tailored to serve specific products.

Terms & Concepts

Application Software: A software program that performs functions not related to the running of the computer itself. Application software includes word processing, electronic spreadsheets, computer graphics, and presentation software.

Business-to-Business (B2B) E-business: E-business in which a business markets and sells to other businesses.

Business-to-Consumer (B2C) E-business: E-business in which a business markets and sells directly to consumers.

Channel: A route used by a business to market and distribute its products or services (e.g., wholesalers, retailers, mail order, Internet).

Database: A collection of data items used for multiple purposes which is stored on a computer.

E-Business: E-business (i.e., electronic business) is the process of buying and selling goods or services electronically rather than through conventional means along with the support activities and transactions necessary to do these tasks. E-business is typically conducted over the Internet.

Electronic Exchanges: Sites on the Internet where buyers and sellers can come together to exchange information and buy and sell products and services.

Enterprise: An organization that uses computers. Although this term is often applied to large organizations, the term can be applied to both small and large organizations.

Hyperlinks: Text or symbols on a website that allow the user to automatically link with another page or document. Hyperlinks are usually identified as being different from regular, unlinked text through a different text format (color, underlined, etc.).

Information System: A system that facilitates the flow of information and data between people or departments.

Information Technology: The use of computers, communications networks, and knowledge in the creation, storage, and dispersal of data and information. Information technology comprises a wide range of items and abilities for use in the creation, storage, and distribution of information.

Supply Chain: A network of organizations involved in production, delivery, and sale of a product. The supply chain may include suppliers, manufacturers, storage facilities, transporters, and retailers. Each organization in the network provides a value-added activity to the product or service. The supply chain includes the flow of tangible goods and materials, funds, and information between the organizations in the network.

Supply Chain Management: The process of efficiently connecting the parties in a value chain in order to reduce costs, improve customer service, develop the organization's knowledge base, increase efficiency, and create barriers to competitors. Supply management includes managing the flow of materials, information, and money within and between organizations in a supply chain.

Bibliography

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E-Business Enterprise Applications

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Subject Terms

E-Business Enterprise Applications

E-Business

Applications

Business-to-Customer E-Business Applications

Business-to-Business E-Business Applications

Terms & Concepts

Bibliography

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