Executive Summary
The term e-business has a wide variety of meanings in today’s business world. It may be used to refer to organizations working in the information communication technology fields as well as upcoming institutions that deal with digital content. However, the term is generally used to refer to use of information and communication technology in daily operations of business institutions.
The technology is applied in order to help businesses in reducing operation cost, explore new markets for their products or services and in improving customer values. E-business strategy can therefore be defined as the set guidelines that facilitates in conduction of e-business. This is through careful information dissemination. Through this strategy, a business is able to extend its services to global market. It helps the business gain international recognition with minimal cost and at the same time with high competency.
Introduction
The term ebusiness has a wide variety of meanings in today’s business world. It may be used to refer to organizations working in the information communication technology fields as well as upcoming institutions that deal with digital content. However, the term is generally used to refer to use of information and communication technology in daily operations of business institutions. The technology is applied in order to help businesses in reducing operation cost, explore new markets for their products or services and in improving customer values.
With the innovation of internet and World Wide Web, every business operator is shifting to ebusiness. Ebusiness strategy can therefore be defined as the set guidelines that facilitates in conduction of e-business (Ali 2005, PP. 24-32). This is through careful information dissemination. Ebusiness strategy helps business organizations use the acquired information appropriately. Through this strategy, a business is able to extend its services to global market. It helps the business gain international recognition with minimal cost and at the same time with high competency.
Development of e-business strategy
There are different approaches employed in developing ebusiness strategy for various institutions. One of the main models used is referred to as Strategic Capability Network (SCN). This model comprises of the vital factors required to analyze or come up with business strategies. The method proves very productive in developing ebusiness strategy as it requires only interconnecting some of the business resources such as computing technology to its business principles such as income from new customers and customer satisfaction (David 2002, P. 15).
The model uses value proposals, resources as well as the business abilities. Value proposals highlight some of the benefits that the business extends to its customers as well as employees. These benefits are achieved due to the business having certain capabilities that helps it meet them. The model tries to look at some of these capabilities and their interdependencies to come up with the most viable ebusiness strategy.
A good example is the one implemented by Citibank in the year 2000. In this model various mechanisms were established that could enable customers conduct all their transactions with the bank without having to involve Citiphone Officers or automated teller machine. In this model, there is an interaction between three elements of the business model. These are business logistics, revenue and the business principles. The bank aimed at improving its customer satisfaction (EBusiness Strategy 2004, Par.5).
Role of e-business models in development of e-business strategy
A business can not come up with e-business strategy if it does not employee ebusiness in its operations. For a business to come up with a viable ebusiness strategy, it has to put into consideration some of the components of its e-business model. This facilitates in ensuring that all business goals and objectives are addressed in the strategy. In the past, businesses used to develop their strategies in the during board meetings while IT strategies were developed within the IT department.
These strategies were later incorporated together in running the business operations. Ebusiness operations can not offer room for these developments today. Today, for an organization to maintain competitive advantage, it needs to ensure that it has developed its ebusiness strategies based on its e-business model. As its methods of operation keep on changing, there is need for it to ensure that it updates its strategies to ensure that its objectives are not compromised (Eddington 2006, Par.3).
Depending on the business mode of operations, ebusiness strategies ranging from operations to IT are developed consecutively. The best example is in the Dell computer manufacturing company. For a long time, the company has been employing its ebusiness model in coming up with its ebusiness strategy. This has helped it in coming with a good strategic management with respect to supply and inventory management.
Effects of e-governance on social structures and relationship
Development of e-business has resulted in numerous social implications. These range from political implications, economic implications, social implications and technological. Development of e-governance has led to effectiveness in most of the governance systems (Efraim King Lee & Viehland 2004, P.58).
E-business has resulted in a significant change in social structure. The most affected group is the disabled and the elderly. The way in which people use to interact in the past has greatly changed with most people spending their time in the internet conducting internet shopping or looking for the most convenient places to conduct their shopping. The elderly and the disabled, being unable to use this technology has been disadvantaged. It has resulted in the emergence of social classes. There has been establishment of online communities where people meet and chart online sharing ideas and information (Feng 2005, PP. 78-82).
People’s social life has been affected by this development. In the past people had to travel to their places of work or to the business premises if one intends to conduct some business transaction. Today, working style has changed where people are now capable of conducting business transactions right at home through the help of internet.
Impacts of e-business on networkbased innovations
E-business has resulted to a significant development in the innovation approach in network based innovation models. With improvement in trade cooperation, a verity of traders is now capable of networking. This can only be achieved if they are capable of communicating freely. As a result, e-business has compelled people to come up with a network system that can be used by a wide group of people in communication.
People can only opt to use a certain system if the happen to understand that it will be productive. There has been an increase in the effort to develop productive network systems that will facilitate in incorporating a wide group of people in the trade. Through e-business, it is now possible for people to source goods and services to a wide range of people. The speed at which orders are made and delivered has also been increased leading to vibrant economic growth of different nations (ICT and e-business in the banking industry 2008, Par. 7).
The technology has provided incentives where business operators are able to come up with new methods of conducting their business activities. A good example is the innovations made by Amazon.com Inc. This is one of the leading internet based organizations that are mostly visited by consumers. The company deals with the sales of variety of products ranging from books, videos, clothing and household goods and many others.
The company was the first to sell products globally by storing them in varied warehouses and distributing them through different member companies. As a result of innovation of e-business, the company has started expanding its internet services. It has managed to come up with Amazon EC2 and Amazon S3 to improve on its performance. Amazon EC2 stands for Elastic Computing Cloud.
It is a new method of wed service that provides virtual servers for those business operators who require more computing resources at a lower cost. This technology allows users to adjust their computing capabilities and also their businesses. They provide users with storage space where they store data on their business operations. Amazon S3, on the other hand stands for Simple Storage Service. This is an adjustable online storage service developed to meet the varied need of storage space by companies and business organizations. The service helps in storing and retrieving of information from any computer. The stored objects in this service do not exceed 5GBs. However, the service allows users to store unlimited number of objects. To retrieve the objects, every user is required to have a unique key code. Before the advent of e-business, Amazon used to rely on low margin models of business that focused on sales volume made for each product. Since then, these services have helped the company make huge profit as well as increase its market share globally.
Impacts of e-business on organizational practices
Impacts on retail sector
The advent of e-business is gradually leading to change in the way businesses and organizations used to conduct their operations. Some of the sectors that have been greatly affected are the retail sectors and banking sectors (Timmers 1999, P. 11). In past, retail organizations could only trade with people who were within their proximity. It was not possible for people from far to trade with a specific retail business. Retail operators had to rent stalls or spaces where they could keep their products as they do the selling. Emergence of e-business has brought significant changes to this form of operations. It has resulted in creation of online retail organizations.
A good example is the eBay Inc. This organization has incorporated some new operation techniques to its traditional methods of operations (Kenneth & Traver 2003, P. 89). EBay has introduced online selling technique to its business facilitating in it conducting its operations locally, nationally and globally. The technique has saved the business great cash it used for renting spaces to sell their products (Michael 2001, Par. 1). This is because it is possible for buyers to order their goods online without having to travel to the business premise. Retailers also do not have to travel to the market place for them to sell their products. The traditional way of buyers having to travel looking for goods has also been eliminated (Paul 2000, P. 20).
From the above case study, it is possible to identify some of the benefits that e-business has brought to the retail sector. The technology has resulted in expansion of the operation scope for most retail organizations. This is because they can now be able to interact with customers countrywide or even globally. Operation cost of retail business has been reduced as retail operators do not require to transfer their goods to market place or rent stalls to sell their goods. However, the technology has not benefited every consumer. There are people who do not know how to use the technology as well as he elderly. There is need for this group of people to be addressed in the future.
Effects of e-business on banking sector
Today, every bank is out to exploit the various opportunities that accompanied the advent of e-business. Some of the main reasons that have caused banking sector shift to e-business are their need to efficiently address the increasing consumer demands. This has been a hardship to the banking institution for a long time. Banks need to improve their brand image and value in the eyes of the people to help them overcome competition. These problems can only be solved through adoption of e-business (Porter 1980, P. 45).
A case in hand is the e-business model that was adopted by Citibank in United Arab Emirates (UAE). The model employed is classified as merchant. In the past, for customers to make any transaction with the bank, they had to make use of either an automated teller machine or consult a Citiphone officer. This has been inconveniencing some customers who need to conduct their transactions in maximum privacy. The model has helped in ensuring that customers make their transactions in absolute privacy. This approach relies on three components of the business model (Sergeant 2000, Par. 3).
These are business principles, logistics and revenue. It was the main of Citibank to improve the value of services it offered to its customers. To achieve this, it need to come up with unique services and improved security. This could only be offered through employment of e-business. Some of the major changes that are seen in the banking sector are the introduction of the dual combination banking. This is where most of the traditional operations in the bank are now executed online with the exception of the most complex functions which are still performed in the bank. E-business has introduced significant transformation within the banking institution.
With most of the operations being performed online, the need for teller in the bank is gradually decreasing. This has made the banks take their tellers through rigorous training to help them fill other opportunities being created by e-business. Most of staffs who worked as teller in the past are now being forced to shift from low level skilled responsibilities to medium level skilled responsibilities (Sugato & TulskieBagchi 2000, Par. 6).
In the past little was being done to assess the security in banking institutions. With emergence of e-business banks have realized that there is chance of insecurity. In this respect, breach of security may come in three ways. These are fraud, hacking as well as errors in system design leading to the compromise of bank’s security. As a result, banks have resulted to installations of security detectors which identify any dishonest transaction that is done in the system. Regular security check ups are also conducted on the system on daily basis to confirm the possibility of frauds in the system (Tawfik & Enders 2005, P. 47).
Conclusion
With every business organization striving to make use of e-business services, there is need for them to develop viable e-business strategies. If not well organized, the technology might lead to organizations running at a loss. There is need for business organizations to use their e-business models in coming up with e-business strategy. This will ensure that all business activities and objectives are reflected in the strategy.
E-business has led to significant change in operations of numerous organizations. Operations in the retail sector have greatly improved. Banking sector has also been affected with banks changed their operations from use of tellers to most of their transactions being conducted online. This technology has led to a great evolution in the business world.
Recommendations
For e-business strategy to be effective, there are some important features that it must contain. These include supply chain management, customer service and customer relationship management, inventory and service management integration and tactical operations alignment. E-business strategy helps in ensuring effectiveness of supply management. It ensures that there is a smooth coordination between the wholesaler and the retailers for different products (Timmers 1998, PP. 14-27).
Through use of internet, the strategy helps in seeing that there is a parallel network of buying and selling products and services. It is the aim of every business to ensure that its customers keep on returning whenever they make a transaction with the business. E-business strategy should help in ensuring that there are better customer services within the business to help in their satisfaction (Beheshti & Sangari 2007, PP. 45-56).
The strategy must facilitate in provision of services that are tailored to customer needs. These may include timely delivery of goods and services to customers. Poor management of business inventory may lead to collapse of the business. E-business strategy should help in developing strategies for inventory accrual and purchasing mechanism that would ensure that business does not make unnecessary purchases (CyberGuru 2004, Par. 3).
As e-business has brought about numerous security inspections in banking institutions, staffs might feel not comfortable when working. There is need for development of more advanced methods of ensuring security that will not affect staffs.
Reference list
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