Electronic
Commerce
 What
is e-Commerce?
Electronic
Commerce (e-Commerce) is the use of electronic communication
to do business. It may be used to carry out business-to-business
(B2B) or business-to-consumer (B2C) transactions.
The
real benefit of e-Commerce is not that it makes old processes
work better but rather it provides a means to break with
tradition and create new ways of doing business. For example,
using the Internet will allow some businesses to remain
small while building a larger turnover by reducing the
cost of doing business. For example, a greengrocer provides
a service for people to order fruit and vegetables over
the Internet and to have those items delivered at a cost
competitive price, as a consequence people who would not
normally shop in that area have become a burgeoning market.
The
Internet is now a valuable communication tool which offers
small business a great opportunity to market itself internationally
and reach a global client base.
The best e-Commerce solution is dependent on the type
of data trading partners need to exchange to run their
businesses effectively. It is important to focus on the
business process rather than the technical issues such
as hardware and software. Different e-Commerce tools are
suited to different business objectives and different
trading partners.
Types of Electronic Commerce
Electronic
Commerce is best understood by looking at who is talking
to whom and what technology they are using. Using this
definition there are four fundamental types of e-Commerce:
-
Person-to-person,
which includes telephone, fax and e-mail. The key issue
for this type of communication is that the data is unstructured
and provides flexibility. However, if data has to be
processed, then it is necessary to re-key it into a
computer which takes an operator time, introduces delays
and the possibility of entry error.
-
Computer-to-computer,
which includes Electronic Data Interchange (EDI) transmissions,
as well as smartcards and barcoded data. For this form
of communication to be successful, the data transfer
format must be to an agreed standard.
-
Person-to-computer,
which includes electronic forms and the Internet, and
also Interactive Voice Response (IVR) to telephone services.
Examples of this form of communication might be people
paying their accounts using IVR or ordering a product
on the Internet using an electronic form. This form
of communication is only suitable where there are small
amounts of data to be input and there are only a small
number of options to choose from.
-
Computer-to-person,
which includes computer-generated faxes, e-mail and
paper mail. Although the data in these messages is sourced
from a computer database and is sent automatically,
the end result is that it must be in a form which is
understandable to a person who will read and act upon
it.
Benefits of Electronic Commerce
e-Commerce
can provide the following benefits over non-electronic
communication:
-
Reduced
Costs - Reduced labour, reduced paper, reduced
errors in keying in data, etc.
-
Reduced
Time
- Shorter lead times, faster delivery of product.
-
Flexibility
with Efficiency - The ability to handle complex
situations, product ranges and customer profiles without
the situation becoming unmanageable.
-
Enhanced
Long Term Trading Partner Relationships -
Improved communication between trading partners leads
to enhanced long-term relationships.
-
Lock
in Customers - The closer you are to your
customer and the more you work with them to change from
normal business practices to best practice Electronic
Commerce, the harder it is for a competitor to upset
your customer relationship.
-
New
Markets - The Internet has the potential
to expand your business into wider geographical locations.
However, it is necessary to develop the appropriate
production capacity and distribution channels to support
market demands generated by promoting your business
to a larger marketplace.
e-Commerce, a Business or Technical Issue
The
biggest mistake made by companies implementing e-Commerce
is to focus solely on technical issues. The most successful
e-Commerce users are those who are re-engineering their
businesses to take advantage of the available technology
and not falling into the trap of buying in technology
that may not fit their business methods, skills or customer
interactions.
Basic Steps to Expand Your e-Commerce Capability
It
is a good idea to stage the implementation of e-Commerce
so that the business and its employees learn to handle
the changing way of doing business.
-
Use
e-mail to replace fax. E-mail is faster and more responsive
than fax. It is possible to transmit whole documents
by e-mail which can then be edited elsewhere.
-
Use
Internet to locate useful business information. There
is a huge range of useful information potentially available
for free. Refer to the Department of State and Regional
Development's website www.business.nsw.gov.au
and diskette "Guide to International Market Research
on the Internet for NSW Exporters" as starting
points.
-
Provide
access to company information on a website. Customers
can obtain up-to-date information and the need to print
brochures is reduced.
-
Set
up company Intranet. Provides access to important company
information to all employees.
-
Carry
out business transactions over the Internet. There is
the potential to improve access to a larger market and
improve business efficiency.
-
Use
business-to-business EDI. More accurate, timely and
efficient transfer of information.
Ask for Help
This
is only a brief outline of Electronic Commerce. If you
need further assistance you may call your local Business
Enterprise Centre (BEC) or visit the Australian Electronic
Business Network website www.ause.net.
Better Business Tip
|
Are
you online often? If so, don't forget to use online
directories such as the Yellow and White Pages.
They can save you time and a small fortune in directory
assistance phone calls. Online banking is an excellent
way to pay bills and online Government information
services are a boon for small business.
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This article brought to Perry Ure clients by the
NSW Department of State & Regional Development.
Industry
Topics are updated regularly - Please visit this site again
soon ...
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