Describe the Effects of eBusiness on the Existing Business
Describe Effects of eBusiness on Existing Business
As we shall see later in this module, the changes that eBusiness brings to a company can be far reaching. It is important to note that without proper control and coordination, these changes can damage the business; and in extreme cases, even be fatal for the company. It is therefore vital that the desired changes are identified, understood, constantly monitored, and managed as the eBusiness is established.
Commercial Implications
In understanding the commercial impact of a change to eBusiness, the executive might ask the following questions:
Is this a short-term solution or a long-term feature? For example, the eBusiness may be viewed as a learning vehicle for the company, which may intend to replace it with a more robust and better targeted solution later. Is the change to eBusiness aimed at reducing the size of an organization or changing its role, or is it intended to grow the scale of the operation as a result of increased business? In any case, eBusiness has commercial implications for company image, budgets, scale, and viability.
The diagram below describes each of the considerations for which the executive will need assurances.
The relationship between eBusiness and eCommerce
Commercial Implications for Introducing eBusiness
What are the commercial implications for introducing eBusiness?
The introduction of eBusiness, or electronic business, into an organization's operational strategy presents a myriad of commercial implications. Evident through numerous case studies and industry shifts over the past few decades, eBusiness has not only reshaped commerce but also forged new paradigms for value creation and competition.
Revenue Streams and Business Models: Evolving beyond traditional bricks-and-mortar operations, businesses can tap into online sales, thereby opening up diverse revenue streams. Subscription models, freemium offerings, affiliate marketing, and on-demand services are just a few examples of innovative revenue models birthed from eBusiness. Companies like Amazon and Alibaba have capitalized on e-commerce, while Netflix and Spotify showcase the transformative power of subscription models.
Cost Efficiency:
eBusiness can offer significant cost savings. Reduced overheads associated with physical spaces, the automation of various business processes, and the ability to scale operations without proportionate hikes in costs mean that, when executed well, eBusiness can bolster profit margins.
Global Reach:
The digital realm knows no borders. An eBusiness model can expand a company's reach from local or regional to global, virtually overnight. Such global accessibility translates to a broader customer base, diversified markets, and the potential for increased sales volumes.
Enhanced Customer Experience: With personalized marketing, 24/7 customer service, AI-driven assistance, and a plethora of digital payment solutions, eBusiness enables an enriched and seamless user experience. Brands can engage and retain customers more effectively by leveraging data analytics and offering tailored solutions.
Competitive Dynamics: The barrier to entry in many digital spaces is lower, meaning increased competition. Businesses that were once market leaders in the physical realm might find themselves outpaced by agile, digital-first startups. Conversely, traditional businesses that adapt well to eBusiness can outflank slower-moving rivals.
Operational Flexibility: eBusiness allows for more flexible and responsive operations. Whether it's adjusting marketing strategies in real-time based on data analytics or swiftly modifying inventory based on online demand forecasting, agility becomes a tangible asset.
Increased Reliance on Technology: An undeniable commercial implication is the elevated dependence on technology infrastructure. Investments in cybersecurity, digital payment gateways, server capacities, and IT support become critical. Any technological downtime can lead to direct revenue losses.
Regulatory and Compliance Challenges: eBusiness operations often grapple with complex regulatory landscapes, especially when transacting across borders. Data protection regulations, digital tax stipulations, and e-commerce standards vary by country, necessitating vigilant compliance management.
Shift in Employment Paradigms: While eBusiness might reduce the need for some traditional roles, it simultaneously creates demand for digital-savvy positions such as data scientists, UX/UI designers, and digital marketing specialists. Adapting to these shifting employment paradigms is vital for talent acquisition and retention.
Stakeholder Expectations: Shareholders, accustomed to traditional business metrics, might need education on eBusiness performance indicators. Meanwhile, customers, emboldened by digital empowerment, might demand higher transparency, ethical business conduct, and robust online engagement.
The commercial implications of introducing eBusiness are profound and multifaceted. While the allure of expanded markets and increased operational efficiency is compelling, the challenges—ranging from fierce competition to intricate compliance requirements—demand astute strategic foresight. Organizations venturing into or expanding their eBusiness operations must navigate this digital terrain with a judicious blend of innovation, adaptability, and resilience to truly harness the transformative power of eBusiness.
E-business (electronic business) represents online business processes on the web, when making use of the internet or extranets.
These client , inside and the board centered business processes incorporate trading labor and products, adjusting clients, handling installments, overseeing creation and supply chains, teaming up with colleagues, sharing data, running mechanized representative administrations and selecting workers.
E-business is similar to online business, but incorporates considerably more than web based buying exchanges.
Works and administrations range from the advancement of intranets and extranets to the arrangement of e-administrations over the web by application specialist organizations.
Undertakings convey e-business to purchase parts and supplies from different organizations, team up on deals advancements and direct joint examination.
Organizations are consistently reexamining and reshaping their plans of action affected by cutting edge innovations, half and half labor forces, elevated client assumptions and, explicitly, the web's accessibility, reach and always evolving capacities. The development of e-business in late many years has brought about new business necessities. Purchasers anticipate that associations should offer self-assistance choices to go through with exchanges, customized encounters, and quick, secure collaborations. New administrative regulations and best practices for keeping electronic information secure have been laid out. Organizations have embraced severe security conventions and devices, including encryption, advanced endorsements and multifaceted confirmation, to safeguard against programmers, misrepresentation and burglary.
New Routes to Market and Monetary Budgets
1) Introducing a new route to market or new interface between customers and a business can have dramatically different effects depending on the type of business to which it is applied.
2) New or modified monetary budgets will be required with a greater emphasis on systems costs, stock holdings
3) The staff mix and company structure is also likely to need changing. In many businesses the staff requirements in some areas may peak as the new processes are introduced, and customer base changes.
4) Many of the required changes and the approach to these changes may be unfamiliar to the existing company management.
5) There will often be a need to modify the approach to the introduction of eBusiness in order to accomodate problems along the way.A senior steering committee with adequate authority, knowledge and a membership, which is truly representative of the stakeholders, can be a powerful solution to controlling the ebusiness introduction
As we see in the diagrams above, the changes that eBusiness may bring to different businesses are wide-ranging.
Let us look at an example.
Impact of new Routes to Market
New routes to market have especially important commercial implications. In service industries, this effect can be a strong negative for eBusiness, especially for established players. For example when Automatic Teller Machines[1] (ATMs) were introduced into the United Kingdom (UK), the banks expected to see customer transactions migrate from the manned teller stations in their branches to the ATMs in equal number. In fact, the overall transaction numbers grew, and although there was a reduction in branch staff-managed transactions, the reductions were not on the scale the banks had expected. As a consequence, the anticipated cost reductions were never realized, and the business reasons for ATMs came under serious criticism.
Managing this Change
The important lesson here is that eBusiness will impact the existing business dynamics. In anticipating, planning for, and managing this change to eBusiness, its potentially damaging effects can be transformed into benefits.
On the other hand, if the effects of the change are ignored, then they might damage the business, as well as the reputation of the architect.
In the next lesson, we will talk about identifying the operational support requirements for eBusiness.
[1]Automatic Teller Machines: Machine that lets you do your banking without dealing with a person. At ATMs, you can take cash from your account, make deposits and move money between accounts. All you need is a password you key in and an access card. Do not confuse the acronym ATM with Asynchronous Transfer Mode, which is a means of transferring data across a network in the form of packets or cells with a fixed size.
