EMERGING MODES OF BUSINESS

E- BUSINESS-CONCEPT

➢ Business refers to economic activities comprising industry, and

commerce.

➢ e-business may be defined as the conduct of business activities using

electronic devices such as computer, mobile, internet, etc.

e-business versus e-commerce:

➢ e-commerce covers a firm’s interactions with its customers and

suppliers over the internet.

➢ e-business includes not only e-commerce, but also other business

functions such as production, inventory management, product

development, accounting and finance and human resource

management.

➢ e-commerce comprises a business firm’s interaction with its suppliers,

and distributors/other business firms.

SCOPE of e-Commerce or e-Business: B to B, B to C, intra-B and C

to C.
B to B Commerce: (business-to-business) - using Electronic Data

Interchange (EDI) technology to send and receive commercial documents

like purchase orders or invoices.

B to C Commerce: (business-to-customers) - identifying activities,

promotion and sometimes even delivery of products (e.g., music or films)

that are carried out online.

Intra-B Commerce: within a business firm, employees do not have to

come to office, meetings can be held online via tele/ video conferencing.

C to C Commerce: business originates from the consumer and the

ultimate destination is also consumers, best suited for dealing in goods for

which there is no established market mechanism, for example, selling

used books or clothes either on cash or barter basis, PayPal is an example

of this kind.

Benefits of e-Commerce:

to Business Organisation:

Expands the marketplace to national and international markets,

Gradual decline in the cost of operations,

 Facilitates ‘pull’ supply chain management, (process of

manufacturing and supplying is driven by actual customer demand)

Competitive advantage over competitors,

Proper time management and support business processes, and

Small firms co-exist with big firms.

to Consumers and Society:

Flexibility,

Competitive price/discounts/waive offs,

More options and choices and customized products,

Quick and Timely delivery (digitized products),

Employment potential,

Facilitate e-Auctions and e-Tenders,

Interaction with consumers.

LIMITATIONS OF e-BUSINESS

Low personal touch

Incongruence between order taking/giving and order fulfilment

speed

Need for technology capability and competence of parties to e-

business

Increased risk due to anonymity and non-traceability of parties

People resistance

Ethical fallouts
e-Business Applications

e-Procurement:

internet-based sales transactions between business firms.

between a single business purchaser and many sellers.

online trading between multiple buyers and sellers.

e-Bidding/e-Auction:

‘Quote your price’ - bid for the goods and services.

submit tender quotations online.

e-Communication/e-Promotion:

e-mail, online catalogues displaying images of goods, advertisement

through banners, pop-ups, opinion poles and customer surveys, etc.

Meetings and conferences by the means of video conferencing.

e-Delivery:
 electronic delivery of computer software, photographs, videos,

books (e-books) and journals (e-journals) and other multimedia

content to the user’s computer.

rendering of legal, accounting, medical, and other consulting

services electronically.

outsourcing of a host of Information Technology Enabled Services

(ITES).

print the airlines and railway tickets at home.

e-Trading: online buying and selling of shares and other financial

instruments.

REQUIREMENTS FOR SUCCESSFUL E-BUSINESS IMPLEMENTATION:

➢ Registration: by filling-up a registration form.

➢ Placing an order: pick and drop the items in the shopping cart (an

online record of what you have picked up while browsing the online

store)

➢ Payment mechanism:

Cash-on Delivery (CoD)

Cheque

Net-banking Transfer: Internet using Immediate Payment

Services (IMPS), NEFT and RTGS.

 Credit or Debit Cards: ‘plastic money,

Digital Cash: form of electronic currency exists only in

cyberspace.

SECURITY AND SAFETY OF BUSINESS TRANSACTIONS:

Transaction risks:

‘default on order taking/giving.’

‘default on delivery’.

‘default on payment’.

Data storage and transmission risks: ‘viruses and ‘hacking’.

VIRUS: Vital Information Under Siege.

• on-screen display (Level-1 virus),

• disruption of functioning (Level-2 virus)

• damage to target data files (Level-3 virus),

• to complete destruction of the system (Level-4 virus)

Risks of threat to intellectual property and privacy

BUSINESS PROCESS OUTSOURCING (BPO)

CONCEPT: Contracting out the non-core activities to captive or third-

party specialists with a view to benefitting from their experience,

expertise, efficiency and, even investment.

➢ Outsourcing involves contracting out

➢ Generally non-core business activities are outsourced

➢ Processes may be outsourced to a captive unit or a third party

BPO provides services such as:

➢ Customer care, i.e. call centre, help desk, etc.

➢ Human resources, i.e. recruitment and selection, training and

placement, payroll processing, etc.

➢ Technical support

➢ Services related to finance and accounting.

➢ Website services, i.e. web hosting, etc.

➢ Transcription

NEED

➢ Focusing of attention

➢ Quest for excellence

➢ Cost reduction

➢ Growth through alliance

➢ Fillip to economic development

SCOPE

➢ key segments are contract manufacturing, contract research,

contract sales and informatics.

 ➢ more popularly associated with IT-enabled services or Business

Process Outsourcing (BPO).

➢ more popular term is ‘call centers’ providing customer-oriented

voice-based services.

➢ ‘Customer Care’ accounts for the bulk of the call centre activities

with 24 hours × 7 days handling of in-bound (customer queries and

grievances) and out-bound (customer surveys, payment follow-up

and telemarketing) traffic.

KNOWLEDGE PROCESS OUTSOURCING

➢ KPO refers to outsourcing of core information-related business

activities which require advanced analytical and technical skills as

well as a high degree of specialist expertise.

➢ KPO is a sub-set of BPO.

KPO provides services such as:

➢ Investment research services

➢ Market research services

➢ Data analytics

➢ Business research services

➢ Others: Legal Process Outsourcing, Financial Process Outsourcing,

Media Process Outsourcing.