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.
|
This article brought to Perry Ure clients by the
NSW Department of State & Regional Development.
Industry
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