E-Business Strategies
The Internet XE "Internet"
progressed through several
phases of evolution before
becoming a viable platform
for conducting business.
Although the Internet was
introduced in the early
1970s, its influence on the
business processes of
enterprises did not readily
begin until the 1990s.
Figure 1.1 illustrates
various phases of the
maturation of the Internet.
As the figure shows, the
first phase was the
emergence of the Internet in
the early 1970s, which
provided the foundation for
global communication.
Organizations, mostly
universities and research
institutions, used the
Internet for e-mail, file
transfers, and other
communication needs.
The first phase lasted until
the early 1990s. Phase two
followed, in which
corporations “Webified”
their front ends. This
involved establishing their
presence on the Web and
providing basic Web pages
describing the corporation
and its products and
services accessible over the
Internet XE "Internet"
. The second phase lasted
until the mid-1990s.
Phase three consisted of the
e-commerce phase that
emerged in the second half
of the 1990s. In this phase,
enterprises deployed
stand-alone e-commerce
systems with limited links
to their back-end systems.
Sites such as Amazon.com
surfaced in this phase and
laid the foundation for
retail e-commerce. Numerous
organizations followed with
most large retail stores
establishing their Web
presence with e-commerce
capabilities (“e-business XE
"E-business"
enabling”) by the early
part of the twenty-first
century.
In the fourth phase,
beginning in the late 1990s,
numerous organizations
started using the Internet
XE "Internet"
and the Web to experiment
with business-to-business
transactions. E-business XE
"E-business"
enabling of
business-to-business
linkages has proven to be
more challenging because
this has required
organizations to uproot
their existing electronic
linkages and channels with
trading partners.
Organizations initially
started reengineering such
linkages on a smaller scale.
However, the current trend
shows that most businesses
now have accepted the
Internet as a viable medium
as business practices and
technologies related to
security and other aspects
have reached basic levels of
maturity. This trend will
continue well until 2005, by
which time most
organizations expect to have
established mature
business-to-business
linkages over the Internet.
The
e-business model
E-business XE "E-business"
initiatives necessitate
organizational
transformation at all
levels, including the
transformation of internal
processes, technology
operations, customer-facing
processes, and many others.
Bringing about this level of
change is a major challenge
and requires organizations
to revisit business and
technology strategies. At
the business level,
e-business strategies drive
organizations to operate in
virtual communities to
conduct business. On the
technology front,
organizations leverage rapid
technological advancements
to build value-added
systems. In addition,
intelligent technology
strategies provide
organizations with better
opportunities for reaping
the most return on
investment (ROI) from their
technology investments.
Comprehending all such
strategies, however,
requires a deep
understanding of the
underlying components of
e-business. Figure 1.2
illustrates the primary
components of the layered
e-business model. As
illustrated, the Internet
XE "Internet"
infrastructure
lies at the core of the
e-business model. Internet
infrastructure refers to the
global Internet network and
the various technological
and business elements that
support its existence. The
Internet infrastructure
comprises ISPs (Internet
service providers) and other
network service providers (NSPs)
that provide the data pipes
and connectivity, which in
turn link users globally.
The United States has the
most mature connectivity of
these network pipes. Other
countries that seek to get
onto the e-business
bandwagon have to fortify
this core element before
businesses in those
countries can embark on
mission-critical e-business.
E-business XE "E-business"
builds on the Internet XE "Internet"
infrastructure’s two
primary capabilities. First,
the Internet infrastructure
has increased the reach of
enterprise and individual
users. This has enabled
businesses to reach global
customers and partners. To
the end customer, this
provides more options to
shop and more sources and
avenues from and with which
to seek information.
Businesses, on the other
hand, can discover other
businesses and explore
opportunities to engage in
business relationships more
rapidly. The Internet
infrastructure’s second
primary capability is its
ability to provide a common
technology platform for all
software and business
applications. Until very
recently, organizations
spent a huge amount of
energy to standardize
enterprise technology
architectures. These
technology architectures
were a prerequisite to build
standardized enterprise
systems that could scale
appropriately and link to
business partners
seamlessly. The Internet
provided all enterprises a
common technology platform
that organizations could use
to build standardized
systems that in turn could
interoperate globally. The
Internet’s common technology
platform has enabled
seamless communication
interfaces, facilitated
access to information
repositories, and in general
enabled open application
integration, which is the
primary catalyst behind
building virtual business
processes.
Internet XE "Internet"
technologies,
which provide the software
foundation for e-business XE
"E-business"
applications, are at the
next layer. The Internet
infrastructure provides only
basic connectivity between
two communicating entities.
Internet and Web
technologies, on the other
hand, help realize real
e-business functions.
Technologies that surfaced
after the birth of the
Internet helped shape
concepts and associated
solutions that ultimately
became the foundation for
today’s e-business
applications. Technologies
such as hypertext markup
language (HTML), for
example, laid the foundation
for Web-based publishing.
Continual advances in those
technologies along with the
ability to post database
transactions over the
Internet securely and
reliably provided the punch
that the corporate world
required to accept the
Internet and its associated
technologies. Other
technologies include
hypertext transfer protocol
(HTTP), which facilitated
Web access; simple mail
transfer protocol (SMTP) for
e-mail; and extensible
markup language (XML XE "XML"
).
The Internet XE "Internet"
and Web technologies drive
the Internet’s enabling
functions, the
third element in the
e-business XE "E-business"
model. These enabling
functions help build
full-fledged e-business
applications and include the
four critical functions of
collaboration
XE "Collaboration"
, communication, content
delivery and processing,
and commerce.
E-business applications XE "Applications:E-business"
and business processes
build on these four
underlying principles
enabled by the Internet and
other networks to help
enterprises realize their
e-business strategies. These
primary functions enable
some of the following:
v
Web-based interaction.
This involves facilitating
access to enterprise systems
using Internet XE "Internet"
and Web technologies and
designing systems with user
interfaces that attract
customers to an
organization’s Web pages and
enable them to conduct
commerce. Organizations
facilitate access to such
systems using various
information appliances such
as computers, handheld
computers, and other forms
of wireless appliances.
Web-based interaction
includes communication,
e-commerce, and other forms
of business activity.
v
Content
XE "Content"
management.
The ability to empower users
with information on products
and services along with
other content services
requires effective content
management strategies and
tools. Content management
involves the ability to
publish content on the Web
site, update that content
through built-in workflow,
and so on.
v
Innovative merchandising
technologies.
Merchandising involves
offering sales promotions,
electronic coupons, and
other affinity programs.
Merchandising also involves
providing users the ability
to browse catalogs,
investigate products and
services, select items and
place them in shopping
carts, and buy using popular
financial instruments.
v
Electronic communication and
collaboration
XE "Collaboration"
.
The Internet XE "Internet"
has become the de facto
medium of communication for
both individual and
corporate users. The forms
of communication are quite
diverse including basic
text-based batch
communication, real-time
chat, and video and audio
communication. Increasing
the bandwidth of the
Internet is enabling vendors
to incorporate richer forms
of communication in their
tools and is pushing
enterprises to rely on the
Internet for
mission-critical
communication.
E-business XE "E-business"
applications XE "Applications:E-business"
form
the final piece of the
e-business model.
Enterprises implement these
applications to reap the
direct advantages for
running their operations.
Building e-business
applications requires the
presence of the other three
layers. Popular e-business
applications include the
e-supply chain XE "Supply
chain"
and e-CRM XE "CRM"
(i.e., e-business-enabled
customer relationship
management) applications.
E-supply chain solutions
tend to automate and
streamline an organization’s
supply chain business
processes through the
Internet XE "Internet"
and e-business
technologies. E-supply chain
tools address supply chain
issues of inventory
management XE "Inventory
management"
and control, collaborative
product design XE "Product
design"
, logistics XE "Logistics"
, warehousing,
e-procurement, and
transportation issues. E-CRM
applications address all
aspects of establishing and
maintaining customer
relationships. E-CRM tools
include sales, marketing,
and customer service tools.
These tools include
functionality for rich forms
of communication including
Web communication and
collaboration XE "Collaboration"
and customer complaint
systems and support for
multiple customer touch
points through various
information appliances and
virtual and physical
channels.
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