E-Business and E-Commerce: Difference Between Terms

Introduction

Growth in the use of information technology has led to the development of e-business and e-commerce. Just like marketing includes sales of products, and sales do not necessarily include marketing, e-commerce is part of e-business, but e-business does not necessarily entail e-commerce. To understand the difference between e-business and e-commerce, one has to look at the specific elements that make up either concept. It is apparent that e-business is a wide concept that also encapsulated the elements of e-commerce.

This paper focuses on providing a clear understanding of the difference between e-business and e-commerce. The reason for choosing to distinguish e-commerce from e-business is to provide a clear understanding of the overlap between the two concepts, and to provide their detailed definitions to demystify the widespread notion that e-commerce and e-business are synonymous concepts.

E-business

E-business entails the incorporation of information technology in the process of business management. E-business is normally aimed at increasing value to the target customers, and it facilitates faster growth for businesses. E-business helps companies understand the needs of the customers better, and it also facilitates ways to meet these needs in a financially sustainable cost (Balakian, Young & Veerapaneni, 2002). This is facilitated by incorporating the different elements of e-business, which will be discussed hereafter.

The first element of e-business is business intelligence. Business intelligence entails the factors that enable a business to effectively study and analyse its business environment. Business intelligence processes include the collection of data related to the market, storing the data and analysing it to determine the changes required for the business to adapt to the external environment.

The competitiveness of companies is a function of the efficiency of business intelligence in the respective companies (Griffin, 2015). Business intelligence involves developing information systems that enhance efficiency in decision-making on the part of the leaders and managers in a company. The entire process involves studying the trends of the market and aligning organisational processes to the trends to harness competitive advantage.

The second element of e-business is customer relationship management (CRM). CRM is a concept that organisations cannot afford to ignore because it entails adding value to the customers by ensuring they are satisfied with the services offered. CRM involves the development of technologies and information systems that bring a close focus on the individual customers.

CRM uses all the available information about the customers and their requirements, and the company tries to align its processes with the requirements of the respective customers. This fosters loyalty on the part of the customers, and it increases profitability for the associated companies. Companies that have adopted CRM systems have the ability to provide better services to their customers at relatively lower costs (E-Business and E-Commerce, 2012).

The third element of e-business is supply chain management (SCM). The management of the network of vendors that a company deals with can help in saving liabilities associated with access to raw materials and other commodities involved in a business. E-business uses SCM as a strategy to ensure businesses can offer products at the most competitive prices in the market.

SCM involves researching to identify vendors that offer the best deals to a company. SCM enhances the ability of the company to add value to its products and services; hence, its interplay with CRM increases competitive power for a company (E-Business and E-Commerce, 2012).

Enterprise resource planning (ERP) is another element associated with e-business. ERP is the process of integrating the different processes in an organisation. These processes involve finance, accounting, and sale, among many other business processes.

The use of technology to integrate these processes results in efficient business for a company because the management of electronic information is easier. ERP systems help in the management of information in all the departments of an organisation, and it facilitates the required applications to manipulate that data associated with every department (E-Business and E-Commerce, 2012).

E-commerce is also an element of e-business. E-commerce entails the use of the internet and online platforms to market, sell, and buy commodities. E-commerce is generally associated with making sales online through intensive marketing.

It provides a platform for companies to make sales through online retail shops. E-commerce is an integral part of raising profits for an organisation because it deals with the generation of revenue (E-Business and E-Commerce, 2012). One of the limitations of e-business is that it is an electronic process that requires the internet as the sole network that can support its processes. The integration of the different applications involved in e-business requires an online platform for data analysis and management.

E-commerce

E-commerce entails the process of exchanging commodities across an electronic network. E-commerce does not necessarily have to involve the exchange of money, but most business entities use e-commerce to sell their products and services. The processes of e-commerce also entails the collection of customer information in the form of electronic data.

For instance, before making a purchase on a commodity, the customer must provide his or her personal information, including email addresses, phone numbers, and financial details, which must be fed to an organisational database for management. E-commerce involves intense management of customers’ information (Introduction to E-commerce, 2006). There are two elements of e-commerce.

The first element of e-commerce is online purchasing. Online purchasing entails access to information about prices of commodities. It may also entail a negotiation process with the seller for the part of the buyer. The second element of e-commerce is online shopping. This is the process by which consumers retrieve information about the attributes of the products and services offered by a company (Balakian, Young & Veerapaneni, 2002).

These elements of e-commerce lead to the development of an online store that provides information about the products and services. Online stores also provide platforms for customers to purchase the products they desire. It is also apparent that e-commerce can be done through different networks. For instance, e-commerce can be conducted through local area networks or wide area networks. This means that it is not limited to the use of the internet.

Discussion

As revealed by the definitions of e-business and e-commerce that are aforementioned, the two concepts are different from each other. E-business encapsulates the different process of utilising and managing information technology, whereas e-commerce is just an element of e-business. The specific difference between e-commerce and e-business is that e-business entails the relationship between a business and the business processes it conducts, whereas e-commerce entails the relationship between a business and the customers.

E-business is all about the different processes in a company, which are enhanced by the employment of technological devices and information systems (E-Business and E-Commerce, 2012). E-business ensures that a company has the best supply chain, and it also ensures that the company focuses on the requirements of the potential clients. E-business is also a process that deals with the management of information regarding internal and external business pressures.

Managers and organisational leaders depend on the information generated through e-business technologies to help them make wise decisions. The integration of the different information systems required for different business processes leads to the development of an efficient electronic business. This means that a company using e-business as a strategy must install the relevant technology to facilitate effective business management.

For instance, a company with an ERP system would be compelled to use CRM and SCM applications to ensure the ERP system is utilised appropriately. E-commerce is also an element of e-business, and it entails the actual process of generating revenue through online stores. This process is associated with marketing and product promotion.

Conclusion

By definition, e-business and e-commerce are different concepts, but practically, they are related to each other in the sense that e-commerce is an integral element of e-business. The specific difference between the two concepts is that while e-commerce is just the element of online purchasing and shopping. This means that while e-commerce is majorly involved with informing customers about products’ attributes and prices, e-business deals with issues facing the company and its business, including the needs of the customers.

In essence, e-commerce is a part of e-business, but e-business is not a part of e-commerce. A technical difference between e-business and e-commerce is that e-business requires the internet as the sole network for integration of the different processes of business. E-commerce, on the other hand, can be performed through the internet or any other available electronic medium.

References

Balakian, W., Young, K., & Veerapaneni, R. (2002). Managing E-Business Projects. Bloomington, Indiana: AuthorHouse.

E-Business and E-Commerce: The Difference. (2012). Web.

Griffin, D. (2015). What is the difference between E-business & E-commerce? Web.

Introduction to E-commerce. (2006). Web.