Role of E-Commerce in Business

Introduction to Commerce

Commerce has an extensive tradition of profiting from innovative and novel systems and tools. As soon as new technology is emerged or is introduced, successful businesses are very much speedy in recognizing such progressing opportunities and try to avail it as much as possible in order to grow their commercial capabilities. Commerce is basically a division of trade or production and it deals with the exchange of goods or services from the manufacturer to the final consumer. Commerce basically deals with the exchange or trading of goods or products that do have some economic value so that some profit is gained. In today’s world conducting commerce is not a different thing. Many businesses find it very much effective to adopt new technologies that can digitally exchange text and also to involve technologies that can provide monetary information. These tools and services help to serve the goals of the businesses, to develop new markets and most important to create innovative business opportunities. In such conditions, different types of services are introduced that are innovative as well as different from traditional businesses. By the integration of such tools and services new type of commerce is introduced and emerged that is named eCommerce or electronic commerce. (E-commerce definition: Understanding e-commerce, n.p.).

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Introduction to Electronic Commerce

Electronic commerce is basically the combination of traditional business practices with computers, information and different technologies that are used for communication. It is not a new type of commerce that has been introduced. It first emerged in the 1960s in large or private networks as large organizations developed electronic data interchange (EDI) installations and banks started to use electronic ways of fund transfer known as electronic funds transfer (EFT).

It is a fact that in this age of technologies e-commerce is no longer the limited area of large organizations and private networks. With the advancements of the internet or in particular, we can say World Wide Web has not only presented a new commercial perspective for large organizations but has also provided a practical access point for small and medium enterprises into the e-commerce applications. (E-commerce definition: Understanding e-commerce, n.p.)

E-commerce can be defined as the conduct of transactions or conduct of trade or exchange by using electronic tools and services. It can be said as the art of selling and buying products or services over the internet.

There are many types of businesses that can be done under e-commerce. E-commerce may be done business to business, business to customer or government to the customer but the most active one is business to business. This type of e-commerce has the most prominent impact on the economy of the country as well. Business to business eCommerce has deep effects on the relation of suppliers and manufacturers in some specific industries or areas like the mining industry or automobile industry. (John Mitchell, n.p.).

E-commerce is much more than buying and selling goods and services over the internet. It involves business with the latest electronic services and technologies. It also includes large computer networks as well as telecommunication means. It has been almost thirty years that e-commerce has been introduced in the market but it has got continuous growth in recent years. In the last 5 years, the internet has improved itself from a secondary way of communication in academic institutions and large organizations to a well-established way of communication that is spread across all parts of the majority society. The growth of e-commerce is totally dependant on the growth of technology or the changes in technology. The more entrenched the medium will be the more users will be drawn towards it. Markets are increased by the increasing number of users. When markets are increasingly more businesses are expanded and as a result, the development in stable and secure technologies is made in order to facilitate e-commerce. A stable and safe environment having strong mechanisms for monetary information and other processes will attract more businesses towards itself and the use of the internet will become more common and if things will remain growing in this pattern then growth is ensured. All such factors play an important role in the growth of the e-commerce market and they should be given a lot of time and economy so that the e-commerce market can continue growing. (E-commerce definition: Understanding e-commerce, n.p.).

There is no existence of any simple definition of e-commerce that simply defines the overall operations, functions and underlying technologies of e-commerce. The most common view of e-commerce is online shopping through the internet. To some extent, this definition is correct as online shopping is one of the most active and common aspects of e-commerce but in the broader sense, any activity can be conducted through e-commerce by using digital and electronic systems. It basically integrates business operations with electronic and network technologies there are also few non-networked and telephony media involved in the operations but the core or base of e-commerce is network technologies and open networks such as the internet. (E-commerce definition: understanding e-commerce, n.p.).

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E-commerce Online Shopping

E-commerce has provided a benefit of online shopping, online purchasing or internet buying. It includes many activities of buying and purchasing of items or properties. It also includes activities such as an online auction. It is just like the same as customers go and buy goods in actual life. Online shopping allows transactions by using electronic ways by computers. Online shopping is becoming common and popular day by day as the internet is becoming common for everyone and every person is now aware of the use of the internet. In the future generation, online shopping will be a promising and growing business. (E-commerce- overview- online shopping, n.p.)

Types of Online Shopping

There are many different types of shopping that can be conducted online. It has got advantages as well as disadvantages.

Online Auctions

Online auctions are the popular places for exchanging goods and services. The individual users that are registered to some particular website that offers auctions can buy and sell almost anything. Examples of online companies that offer the services of the auction are yahoo or eBay. Normally the price over here is less than the market prices. Users can assess the honesty of sales and can build trust over these companies by observing the past history sales or buy records before making any exchange. Much of the information is provided online for the users and for the help of the customers there is always a section on every company’s website that is for answering the queries of the users and customers. However, in some cases, there are some vendors who refused to ship overseas because there are risks associated as the vendors are registered but they are not official businesses so the credibility is not known.

Classifieds

It is just like our newspaper classifieds. They offer many good and sometimes used items with good discount offers. But the risk here is comparatively higher as it is hard to evaluate the history of the trader in classifieds.

Portals

Portals just simply portray our shopping centres. It combines many different shopping locations in a single place but the difference is that it is online and electronic. The benefit of portals as compare to other ways of online shopping is the variety of shops and the navigation in between the shops is very much quick and simple. The only disadvantage or difficulty that is in this system is that sometimes the site has been changed without any information which creates a problem for the customers. (Ecommerce: overview, n.p.).

Steps for Doing Online Shopping

Online shopping is very much simple and easy. You don’t even have to go out or drive. It is something that can be done by sitting at your place and with just by few clicks you can buy the things you want. Following are some of the steps that are normally followed while shopping online:

  1. Decide the shop from where you want to buy the things.
  2. Every user has been provided with a username and password so log in by using your log in details and fill out the personal information like address, telephone number, shipping address and billing address etc.
  3. Browse the items by giving some time in order to give yourself a choice of variety.
  4. There is a virtual shopping cart over every online shop. You can easily and simply add or delete items in the cart. So put the items of your interest in the shopping cart.
  5. There are different ways in which the customer can pay. So select the most appropriate way of payment that is suitable and convenient for you.
  6. Similarly, there is a choice given for the delivery method. It depends on the customer that how he wants to get the things. So select the most proper and suitable way of delivery.
  7. Confirm the order when everything is done.
  8. Log out. (Ecommerce overview, n.p.).

Types of Payment

There are many ways in which customers can make payments when they are purchasing items online. The customers are allowed to choose the method that is convenient for them and the method that is most reliable for them. The most common payment methods are credit cards, cheques or cash on delivery. Cheques can be personal cheques as well as cashier’s cheques. Another method can be a money order or money transfer. On many online shopping websites, there are payment systems such as PayPal. (Ecommerce overview, n.p.)

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Online Purchase Industries

In a survey made in October 2001, there are many industries that had large shares of online sales and shopping. Few of the industries that are making their ways into the electronic and digital world are:

  • Airlines: This industry is progressing very much in the field of online transactions. Tickets can be booked online very easily with just a few clicks.
  • Apparel: The shopping of such stuff is getting popular day by day. Famous designers or brands must have their online shops as well in today’s world.
  • Computer Hardware: The trade of computer peripherals is proving itself to be a business that is becoming common day by day. All the major computer industries have their online portals and they deal with customers throughout the world.
  • Hotel Reservations: This is also an important benefit of online shopping and transactions. People can easily make dealing with all the high budget and top-class hotels whenever they want to. It is very much easy to make a booking of their choice online.
  • Consumer electronics: This is again an area that provides a lot of variety to the customers and the customers can browse through different brands and items of their choice and can order according to their own specifications. (Economic overview, n.p.).

Online Shopping Demographics

According to the survey that was made by the statistical data of population the average genders, age and culture of online shopping or e-commerce are as follows:

Gender

In American countries, the growing rate of female users is triple as compared to male users. The use of the internet is becoming common and not only male but female users are very much involved in this world of the internet and also in the online shopping business. But in most Asian countries like China, Hong Kong, Singapore, Pakistan, India and Japan the average online customers or users are male rather than female. Internet awareness is now becoming common and everyone can access it so within few years the ratio of female and male users will be equal. (E-commerce- overview- online shopping, n.p.).

Age

There are about 50% of customers or online shoppers that are at the age from 18 to 49. This is the average age group of people belonging to American countries. But in most Asian countries the average of the users who used to do online shopping are under 36 years of age. (E-commerce- overview- online shopping, n.p.)

Culture

The Swedish, European, Danish and American countries have the highest usage of the internet according to a demographic survey. However, people from Sweden are not very much interested in online shopping. People from British countries are very much interested in online shopping. It is observed that the majority of UK people are used to doing transactions, dealings, reservations and shopping online. They are very keen on performing most of the activities over the internet. They find it very much easy and convenient. However, the people from China on the other hand are very much interested in internet games as compared to online shopping. According to a demographic survey, 43 per cent of the population in China is interested in playing games. And only 16 per cent of them are interested in doing online shopping. (E-commerce- overview- online shopping, n.p.).

Different E-commerce Business Operations

The scope of applying electronic applications and digital operations in commerce is now becoming the necessity of today’s world. E-commerce is spreading itself throughout the world and now it not only includes the traditional activities like providing information about some particular service or product but it also includes the latest activities like conducting online trade-in virtual malls or providing the information digitally. The most common technical operations or digital techniques that are most commonly applied in e-commerce are mostly business to business or business to customer. Some of them are:

Exchange of information

  • Trading of goods or services.
  • Advertising
  • Sales promotion.
  • Online content delivery by applying digital procedures.
  • Transaction processing
  • Electronic fund transfer
  • Electronic share trading.
  • Electronic billing system.
  • Mutual work interaction.
  • Manufacturing management
  • Account settlement.
  • Online sourcing.
  • Public procurement
  • Direct consumer marketing
  • Inventory management.
  • Post-sales services
  • Commercial auctions.

These are the most common operations that are performed in any business involving e-commerce but still, the implementation of e-commerce is different in different places depending on the nature of work, environment and conditions. Most of the small and medium enterprises focus on operations like promoting the products and services with the help of online facilities. In most, small and medium enterprises the basic aim of implementing e-commerce is to provide quality customer support. Transaction processing is another most important factor for which many enterprises want to imply a system that is electronically and digitally strong and stable. (E-commerce definition: understanding e-commerce, n.p.)

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E-commerce today is totally different from traditional commerce and trading due to the unique and latest characteristics and functionalities of the medium that is being used by today’s e-commerce. E-commerce is getting popular and common as compared to other Media because it is dynamic and it allows the users to interact with the websites directly. The users can even post their comments and also can describe the scope of the product or service. E-commerce is not a person to person commerce instead it allows a very controlled interaction between the purchaser and the retailer. In e-commerce, another benefit is that the retailer can guide the customer about the series of options and processes. Another difference between e-commerce from traditional commerce is that it is not depending on time and space. The interaction can be made at any time whether it is a working hour or not and can be made from anywhere. The business can be conducted at any time, in any time zone, seven days of the week and 24 hours of the day. (Ecommerce definition: understanding e-commerce, n.p.)

Web Shop

A webshop is a place or website that is used to display and sell out the product or services in e-commerce. It is similar to the normal shops; and capable of selling just a few products or thousands of products. Webshops promote the products and services and provide the customers with different types of forms that ask the customers for various types of information required for making the purchase. The forms ask about the payment type, product information, address and customer’s required information. Ecommerce has made it easy to shop from one corner of the world to another. For the identification of products, there are different factors like every product has been assigned with a model number so that difference can be made in different products. There is always a name associated with every product that gives a short description of the product. There are different categories for different types of products. In addition to all this, some more information like manufacturer, price, colour and weight is also given for user’s convenience. (E-commerce Brisbane, n.p.)

How to Get Started With E-Commerce

The trick of having a successful e-commerce business is to have e-commerce software, strong, useful and demanding products, administration, support and search engine marketing. The key factors that should be kept in mind before starting an e-business include:

  • First of all, there should be inexpensive e-commerce software that includes virtual shopping carts as well. An e-commerce template can be purchased online with the shopping cart software and then slight changes can be made according to the look and feel you want to give your website. The website can be completely designed by the retailer himself. This front end investment is small but it can give much as it counts a lot that how customers are feeling about the website and its outlook. It should be designed in such a way so that customers are attracted by it.
  • The next step should be the purchase of an online storefront that should be hosted by a major e-commerce hosting site like Yahoo or eBay.
  • Store templates should be selected and customized. After the store outlook is completed products should be added and sold.
  • Look and feel is limited but it should be the quickest and easiest. In addition, it should also be designed in such a way so that the customer is attracted towards it.
  • The products should have variety and quality products and services should be provided to the users so that the customers are satisfied. (E-commerce definition, n.p.)

Information system

For designing any enterprise or organization or company the major part over which the entire organization is relying is always the information system of the organization. The same is the case with e-businesses; the system developed should pay a great deal of attention towards the designing of information systems. For e-commerce, the information is like the blood of the business. An information system is the part of the organization that gathers the information and then helps the organization manage its daily operations. This data is very much useful in making decisions as well. The information system is a system that uses technology for gathering, processing, storing and manipulating data. Most organizations rely on the information system for performing their transactions, operations, competing in the market place and augmenting their businesses. (Information System, n.p.)

Importance of Information Needs and Culture of Organization

For developing the information system of any organization or business the management of information is very much necessary as it helps the organization to achieve its goals. But before developing an information system it is necessary that the needs of the information should be fully understood by the system developer. The needs of information throughout the organization should be proper. The system developer should be aware of not only the organization’s need for information but should also know the requirements of the customer. The system developer should know what type of information is needed by the organization because if he will not fulfil the information needs of the organization then this will affect the growth of the company and also the achievement of goals will be interfered with. The information should be properly distributed across the organization. The distribution of data should be done in a proper and intelligent manner so that the departments can only get access to the information that is related to them. In many situations, there is some data that is confidential and should not be in reach of every other member of the organization. The system developer should be aware of that what information is to be provided to which department of the organization and he should also be aware of the customer’s needs of information. If he does not pay any attention to this sensitive issue then he will be responsible for disturbing the secrecy of the organization and he will also not be able to satisfy the customer. If the information that is being provided to the customer is not of their concern then obviously the customers will not be satisfied and will never be a promising customers. The information should always be consistent and on time and it should also be not less and not more than required. The system developer should have good tools for gathering the information and he should have a great practice and analysis otherwise a lot of issues can arise like misuse of information, leakage of information, disturbance of confidentiality, waste of time due to incomplete information, decrease in the number of customers and falling reputation of the organization. (Your Organization Needs an Information Strategy, n.p.)

An information system is the fundamental part of the culture or society where it is found. It means that the ideas, statuses, roles and everything that is residing in the information system represents the culture and human system of the organization. Culture is basically a set of ideas and rules. The culture of an organization represents the shared ideas, concepts and rules and they are expressed by human lives. Culture is the distinct patterns of life, beliefs and norms that give shapes to our way of life and it also affects the relations of the society or the groups within the society. Culture also reflects the knowledge of the people. When talking about the culture and human system within an organization then it reflects the beliefs, ways, working environment, dedication and the nature of the member in the organization. It reflects the knowledge and information of the people that are associated with the organization. The culture of the people in an organization shows that what they basically do and what they want to do. Obviously, this approach has a very much effect on the development of an information system. If the member is dedicated to his organization and the culture of the organization is established in such a way that every other person has got sincerity for his work then obviously they should take care of all the aspects while developing the information system. They will provide updated and complete information to the organization as well as customers and it will be beneficial for the organization itself. The organizational culture and human system provide the standards to decide what should be done by each individual who is associated with the organization for the betterment and success of the organization. If the member of the society is having any bad intentions or ill feelings for the organization then he would never work for the betterment of the organization.

For resolving this issue ethnographic research should be done in order to find out the cultural issues and problems residing in the organization. This research should be done by considering all the people who are associated with the organization. After getting the views and opinions of the members related to the organization, keen observations and analysis should be made to find out the problems in the culture of the organization. This survey will be then very much useful in finding out the solution that is perfect for the organization.

The role of the system developer is very much important here as he is the one who will design the information system and then find out the problems that are residing in the culture of an organization and if there are such issues then he can perform such surveys and analysis. If the organization is free of all the cultural issues and problems then obviously it will have a positive impact on the growth of the organization.

Works Cited

Ecommerce definition: understanding e-commerce. 2008. Web.

E-commerce definition. 2008. Web.

E-commerce overview: online shopping. 2008. Web.

Faraja Mukama, Honest Christopher Kimaro and Judith Gregory, Information Systems Research Group, Department of Informatics, University of Oslo, Oslo, Norway. 2008. Web.

Information System. 2008. Web.

John Mitchell and Associates. 2008. Web.

Your Organization Needs an Information Strategy. 2008. Web.

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