Presentation on Operations Aspect of E and M commerce
The Internet is projected to grow faster than any other technology invented in human history. Electronic commerce has accounted for 1.3 % to 3.3%of the world’s global domestic product in 2001. The biggest growth in Electronic commerce is expected to come from trading in software, education, entertainment, finance and other professional services. The term e-commerce is used widely across many disciplines, and is evolving at a rate equally as swift as the technology supporting the process.
Some definitions broadly hold that e- commerce encompasses all electronically facilitated business processes, including data transfers among buyers, sellers, and various other supply chain entities. Other definitions such as IBM’s “electronic business” definition include an internet-specific relationship wherein business processes are electronically facilitated through Internet technologies. However the simplest definition I found as a basis to understand e commerce is “transactions carried out over the internet”, i.e. the buying, selling and marketing on the Internet.
Although the sale of goods, such as books and music, is the most visible area of e commerce growth, the biggest advances so far are in the supply and distribution of services. Including software services, finance, education, entertainment and professional services. Before the mass acceptance of the Net, electronic commerce between businesses and consumers was constrained to processes within an existing relationship, such as ATM facilitation provided by a bank. Similarly, although commerce between businesses has been conducted electronically since the advent of EDI (electronic data interchange) in the 1970’s, such processes were based primarily on pre-existing relationships between large companies.
The misconception of the Net as the sole facilitator of e commerce appears to have evolved with the growth of B2C trade on the World Wide Web. Although the Net, and more specifically the web, is not the only facilitators of e commerce, they have proven to be the predominant generators of new e commerce relationships. E commerce is merely a part of a new method of communication of communication that has been opened up by the development of the Net. The first four of these points were in place by the mid 1990’s; the last remains elusive to the present day.
In a very real sense, e commerce has its origins in the bulletin boards of the 1970’s. In those years which we could call the Jurassic period of computing, the dinosaurs i.e. the mainframe computers were facing extinction, and the earliest of mammals i.e. minicomputers and birds i.e.PC were evolving rapidly, each spawning a new form of communication. What made bulletin boards effective was the ability to broadcast information. Early bulletin boards provided us with the first digital billboards. In the 1970’s, no microcomputer user could live without them E commerce was born of the mindset using digital networks to connect consumers and suppliers electronically.
The role of IT
One of the major problems with IT industry, since the first computer was produced, has been the inability to forecast with any degree of accuracy both the size of market an how the technology will be used. The mid and late 1980’s saw further changes in the use of IT in business. The role of IT became strategic. For example, American Airlines (AA) spent a lot of money developing a large computer reservations system and achieved a competitive advantage with it.
It placed its terminals in travels agents’ shops, giving immediate information on availability and pricing. This was a better way of doing business as far as both travel agents and consumers were concerned. AA’s market share increased and it was able to charge other airlines for using its system. At this point IS, information systems became strategic in the sense of being an important factor in the competitive environment. This contrasted with its previous role in automating isolated functions such as payrolls to achieve efficiency benefits.E business requires business re-design, of both structure and processes. Business may not be able or prepared to face this task, which may be more difficult than implementing the technology.
Customer confidence is lacking: Internet fraud grows and privacy problems occur. Venture capital: The US is better than Europe at this. Money is provided earlier and more easily. US venture capitalists do not require long trading records and take more risks. The tax treatment of share options is more favorable. Failure stories discourage new business ventures. Reliability has recently been an issue with problems such as denial of service attacks, viruses and hackers. Security of Private data and of credit card numbers is of paramount concern to B2C consumers.