E-Commerce

What is the Impact of Electronic Commerce?

E-commerce and e-business are not solely the Internet, websites or dot com companies. It is about a new business concept that incorporates all previous business management and economics concepts. As such, e-business and e-commerce impact on many areas of business and disciplines of business management studies. For example:

1. Marketing

• issues of on-line advertising, marketing strategies and consumer behaviour and cultures. One of the areas in which it impacts particularly is direct marketing. In the past this was mainly door-to-door, home parties (like the Tupperware parties) and mall order using catalogues of leaflets. This moved to telemarketing and TV selling with the advances in telephone and television technology and finally developed into e-marketing spawning ‘eCRM’ (customer relationship management) data mining and the like by creating new channels for direct sales and promotion.

2. Computer science

• development of different network and computing technologies and languages to support e-commerce and e-business, for example linking front and back office legacy systems with the ‘web-based’ technology.

3. Finance and accounting

• on-line banking; issues of transaction costs; accounting and auditing implications where ‘intangible’ assets and human capital must be tangibly valued in an increasingly knowledge based economy.

4. Economics

• the impact of e-commerce on local and global economies; understanding the concepts of a digital and knowledge-based economy and how this fits into economic theory.

5. Production and operations management

• the impact of on-line processing has led to reduced cycle times. It takes seconds to deliver digitized products and services electronically; similarly the time for processing orders can be reduced by more than 90 per cent from days to minutes. Production system are integrated with finance marketing and other functional systems as well as with business partners and customers.

6. Production and operations management (manufacturing)

• moving from mass production to demand-driven, mass customisation customer pull rather than the manufacturer push of the past. Wed-based Enterprise Resource Planning system (ERP) can also be used to forward orders directly to designers and/ or production floor within seconds, thus cuttin production cycle times by up to 50 per cent, especially when manufacturig plants, engineers and designers are located in different countries. In sub-assembler companies, where a product is assembled from a number of different components sourced from a number of manufacturers, communication, collaboration and coordination are critical – so electronic bidding can yield cheaper components and having flexible and adaptable procurement systems allows fast changes at a minimum cost so inventories can be minimised and money saved.

7. Management information systems

• analysis, design and implementation of e-business systems within an organisation; issues of integration of front-end and back-end systems.

8. Human resource management

• issues of on-line recruiting, home working and ‘intrapreneurs’ working on a project by project basis replacing permanent employees.

9. Business law and ethics

• the different legal and ethical issues that have arisen as a result of a global ‘virtual’ market. Issues such as copyright laws, privacy of customer information, legality of electronic contracts, etc.