The term ebusiness, or electronic business, is applied to many different business models but the common thread running through the majority of ebusiness solutions is the Internet, which is used to link Services and Service users.
Generally ebusiness solutions fall into one of two categories;
- but there are many variations within each!
We have selected three scenarios to illustrate the main aspects of ebusiness solutions.
The simplest form of ebusiness is the basic Advertising Web Site, promoting a business's products, services and brands to its customers and potential customers - basic Business to Consumer (B2C).
Even this, the simplest form of Web site, with some simple development can provide significant business benefits. In addition to product promotion a Web site can be used to disseminate product support information, future product plans, project reports, provide up to date business contact details etc.
A feature of this type of e-business solution is that it provides non-stop promotion of products and services at low cost. However, the effectiveness of any advertsing is dependent on the number of people seeing it - in Web site terms the number of visitors or "hits" on the site.
There are several techniques that can be used to attract visitors to a web site including;
If a site is very successful at attracting visitors then it, in turn, attracts other businesses as advertisers who will pay for space based on the numbers of relevant visitors. This can provide an opportunity for advertising at cost effective rates via other web sites.
Because the advertising revenues are so important to many sites, they are constantly inventing new ways of attracting visitors which is one of the reasons why, over the past 18 months or so, there has been a strong movement towards the development ofPortal Sites.
Very often Portal Sites have developed from simple product or service sites that have been extended to include hundreds of links to other sites within a market or topic area. The portal strategy has also been adopted by many of the early Internet Service Providers substituting advertising revenues for reducing subscriber revenues.
For the consumer, Portals simplify the task of finding and accessing information in a market area or product type, providing a form of single point of contact to the Internet. The largest portals on the internet can receive millions of hits per day and yet they are often not directly selling anything!
The natural progression from a basic Advertising Web site is to provide on-line sales capability enabling visitors to select and order products via the Web site - this is the major shift in the positioning of the Web site and leads to advanced B2C ebusiness solutions.
The simplest form of on-line order is a Web form that the visitor completes and submits to the site. The details from the form have to be collected and forwarded to the business for action. At this, the simplest level of capability, the order process might involve contacting the customer by telephone to complete credit card payments, delivery details etc. While this form of order confirmation might work on a local scale it cannot easily cope with international orders from differing time zones!
Obviously a site with an on-line order form is an improvement over a simple advertising site but it does not make effective use of the facilities provided by the Internet to automate the ordering process.
The simplest way to automate your site is to use Email, linked to your web pages. Email. Most Internet Service providers offer free email accounts with their web site hosting services and these can be used to provide efficient feedback, on-line orders, booking services etc.
A simple email based on-line ordering system involves the visitor selecting product(s) from the web site into a "shopping basket" and then submitting their order to the Web service. The Web service will then requests payment details and if these are confirmed the web service accepts the order and send details through to the business using email. The business can reply by email directly to the visitor (now a customer) with delivery details etc. This email-enabled process can operate automatically 24 hours a day!
While this process is now quite common it is dependent on another key technology for success -secure transmission of payment details! The Internet provides several security options - encoding transmissions to stop anyone capturing traffic and reading payment details. High quality encryption requires significant computer processing effort so the usual technique is to use open communications for Web traffic but switch to secure transmission for critical payment transactions.
The impact of even a simple Web site on a business can be dramatic as it extends the business's market "reach" to a National or International audience - and it can generate business around the clock. When a business implements on-line ordering it can sometimes be surprised at the impacts - the slick on-line ordering system can accept orders quickly and accurately but fulfillment processes are often based on legacy systems and processes. For instance electronic orders may have to be re-keyed into an existing order processing system! Many established businesses have had to review and revise their internal business processes and systems to become more responsive to internet business. This often requires improved automation of the supply chain, and obviously this involves suppliers!
The B2B market is developing because businesses have recognised the advantages of Internet trading. On-line ordering is as convenient for a business as it is for a consumer! Also if a business switches to ordering via the Internet they can more easily switch supplies when the value offered is attractive.
Increasingly, Businesses are requiring their suppliers to offer Internet based ordering and supply services. This is improving the flexibility/responsivenes of supply, reducing costs and enabling more effective customer service. Another major impact of B2B is that it enables new entrants to markets to compete on equal terms with established providers, many businesses are now starting to actively search for alternative suppliers via the Internet. TheB2B market has developed rapidly opening markets to increased competition as it reduces "barriers to entry" for new and small businesses - UK National and Local Government and the Health Service are increasingly ordering from Internet based suppliers.
B2B ebusiness solutions fall into the same categories as B2C namely, Promotion, On-line trading and Portals.
B2B Portals have particular importance because of the value of potential sales value generated through them. In several major industries, for instance the US Aerospace Industry, market leaders are collaborating to establish and extend industry portals, creating single points of contact for all suppliers in a sector.
B2B inter-trading mainly impacts the order/fulfillment process, reducing costs and improving supply responsiveness. The B2C market faces additional challenges - a major one being the delivery model. Its easy and convenient to buy on-line but delivering the purchased goods to the customer is more difficult. Grocery chains can invest in fleets of delivery vans but small businesses moving into on-line sales need to use existing delivery services - post, parcel post etc. This is very much a developing field - a National Milk Delivery organisation has recently announced plans to operate as a delivery agent on behalf of Internet businesses.
Whether you have an idea for a new business or are already running an established small business then you should carefully consider the potential and/or relevance of ebusiness. Using ebusiness techniques could have a dramatic impact on your business!
The type of business you are planning or operating will have a strong bearing on the ebusiness solutions that might be relevant. There are several issues that should be considered;
a. Is your business very localised by nature/choice - for instance Window Cleaning, Keep Fit Classes?
If so then the "reach" (National/International audience!) provided by the Internet is probably not relevant. However you may find that a simple advertising site with contact details generates additional prospects and customers. It may also be beneficial to offer an email communication option to your customers. A London Dentist now sends appointment reminders by Email!
Many communities now have Web Sites. Look your location up on the internet and see if you can find a Local Authority, Chamber of Commerce or similar Web site with a local services page - it could be worth advertising there.
b. Is your business localised but with potential to expand - e.g. a Butcher, Accountants?
If so then you might find that an Advertising site with an email contact/ordering system could increase prospects and customers. With seasonal produce customers will often travel outside their usual area to buy specialities.
Because an Internet site has such reach, it might be worth considering extending or tailoring products to be more suitable for long distance delivery. If you are a service provider then could you offer a remote version of the service via Email and post? How does someone in a remote location gain access to services?
c. Could the business you are planning be an ebusiness?
This obviously depends on the products/services you plan to supply but if they are suitable for online selling and post/carrier delivery then it may be worth considering a shift of focus to a total ebusiness solution.
There are many potential benefits including potential market size, customer perceptions of your business (basically based on your web site image and service quality), lower traditional overheads because premises can be located where convenient rather than prime locations, you may not need that shop! etc. A word of caution though! ebusinesses operate in a fast moving competitive world and your products and services will be open to scrutiny by competitors so innovation needs to be continuous!
d. Could you develop your own ebusiness?
This will depend on your in-house skills and your business plan. It is important that your Web site looks professional and operates smoothly. In most cases the best approach will be to employ a specialist web developer who can quickly translate your ideas and plans into a working ebusiness solution.
If you have basic HTML skills and time to devote to learning and testing an ebusiness solution then you could use one of the many site builder products. These products enable creation of your "shop front" and product catalog and most include links to secure payment services. These services handle different types of payment, for instance they will validate credit card transactions, authenticate the user, convert currencies and deposit your preferred currency directly into your bank within hours of a transaction!