Economic environment in the past had hailed successful business adventure as one that had the availability of raw materials, large plots of land, capital and money.
In recent times, the economic environment has changed dramatically. Money and land are no longer the most important resource for a company’s success. It is now information. No matter what miraculous inventions or products one has come up with, if there is no information about it to the wider group of people, your products, your ideas and your company will go down the drain and nobody will even sympathize with you because nobody know you existed.
Fortunately, the economic environment changed and brought with it tools to manage the change to ones advantage. That is, as Information became the most important resource, Information and Communications Technology became revolutionalized, gathered paced and continued to provide increasingly more powerful, affordable, versatile and convenient tools in the form of technologies, infrastructure and services that help the business group handle its new resource, Information.
These above mentioned factors indicate that businesses, both large and small, need to change their way of doing things in order to exploit the unique opportunities presented by the birth of Information and Communications technologies era. Thus the emergence of what is now popularly known as e-Business.
E-Business is using the internet and related technologies to redesign and embed an organization’s internal activities, processes and relations and come up with new ways of working that are superior to what was being done in the past.
It is about computerizing your processes, getting closer to your customers, partners, vendors and staff through computers that are networked and having staff whose activities are more knowledge based rather than physical.
The e-Business thrives on network of computers called the Internet. This network of computers is global and allows individuals and companies to access and share information and transactions. The internet as is recently called is the result of many years of hard work starting from the 1840s. Then, it was known as the Telegraph.
With the Telegraph, signals were sent over vast distances and dot, dashes short and long signals were used. It was a major source of communication by the American Government during the American civil war in 18o1-1865. Electronic signals of +/-15v. are still used in network interface card today.
Before the advent of the internet, many men had envisaged it and their worked had been developed over a period to get what we now call the Internet. We can talk of Vannever Bush, who established the US military/university research partnership that later developed the ARPANET. He also wrote the first visionary description of the potential use for information technology, inspiring many of the Internet’s creations.
There is also Joseph Carl Robnett Licklider, who developed the idea of the universal network, spread his vision through the IPTO and inspired others to continue his work by creating the ARPANET. Another person worth mentioning is Dr. Steve Crocker, and internet and computer security expert. His company, Steve Crocker and Associates, specializes in current Internet and electronic commerce technologies. Steve is also one of the founding members and chief technical officer of Cyber Cash Inc. the leading internet payment company. The last person to be mentioned is Mark Anderseen. As a part-time research assistant of the National Centre for Super Computing Applications of the University of Illinois, at the onset of the World Wide Web, Mark considered the complexity of the browser at the time and decided to develop a browser that was user friendly and graphically rich and could be used by almost anybody. These are just a few of the great minds that envisioned and laid the foundation for the internet. With such long years of serious research, it is no wonder that the Internet has been widely accepted and it usage has grown tremendously over the years. In 1977 the internet was having 111 hosts, by 1981, the figure had doubled to 213hosts. In 1983 the net was having 562 hosts. The figure got to 100,000 hosts in1989, over 200 million in 2002 and it is estimated that by 2010, 80% of the planet will be on the net.
This kind of growth is not surprising considering the profound convenience and assistance that the Internet provides especially in the area of business. One of the major breakthrough as far as the use of the Internet is concerned, is doing business on the net or simply e-business. The Internet is the engine that has escalated the growth and diversification of e-business. This has given the internet and e-business such importance in the current economic environment as it has become the way of life for the modern day business mind and the world at large.
In the first place, the internet is what can be termed as a modern functional anarchy. It has no ownership whether direct or indirect. It does not exist as an Entity and does not charge for anything. Any group of individuals or companies can access the Internet and is responsible for the machines they use and the access onto the net. Any user or server on the net can connect to another user or server, thus giving individuals and companies a tremendous opportunity to set up internet sites for their day to day activities. Thus, anyone can get involved in doing business online or get involved with e-business without seeking approval from anyone. With this, individuals, companies and government departments can inform the world or whoever cares to know about them, what they do. Students can sit in their homes and get to know what school is offering what program without the students having to travel long distances just to buy forms or make enquiries. In the same way investors can do not need to move from country to country just to get information about what governments are doing to boost investments in their countries. A click on a button will have about 80% of the job done.
On the other hand, this easy access to the net and consequently the e-business has given organizations and individuals who are doing e-business an expanded market reach. Organizations are able to sell their products and services to customers across the globe if they choose to do so. One can easily think of organizations like quest.net that sell wellness products, amazon.com that sells books and therabreath.com with Dr. Harold Katz who deals with oral products, all of which would have been dealing with customers in their countries and intermediaries who inflate prices of products as they export them to other countries. E-business enables consumers to purchase products from manufacturers without intermediaries and high prices.
This also bring to light the fact that e-business has no boundaries or distance. Though data sent passes through routers and transmissions infrastructure owned by a collection of private and public entities, including telecommunication companies, universities and governments indicate that, the internet may not be as independent as Barlow and others want us to believe. However, e-business can be done anywhere and by anyone. The data is put on the net by anyone and anybody can access it.
This is primarily because, e-business generate visibility. AOL online average minutes per day increased in 1999 from 47 to 63 in 2001, that is over 30% increase of two years. The impact of Internet on the other media is very significant. Since the inception of the Internet, 23% people watch TV less, 20% read magazines less, 15% read news papers less and 9% listen to radio less. According to Netsizer.com, in 2002, the Internet reached two important milestones; it had 200,000,000IP host and 840,000,000 users. Also, statistics fro the Internet Society indicate that in 1977, the net had 111 hosts. This rose to 213 in 1981. By 1989, the number of host on the net had reached 100,000. In 2002, the number of hosts crossed 200,000,000 and it is expected that by 2010, 80% of the planet will be on the net. With this sterling performance of the net, it would have been a waste of human effort if all it would be used for is just sending messages to one another by the e-mail system. People use the net often and so are able to gather tones and tones of information. It is important that individuals, organizations and government Departments take advantage of visibility that the Internet generates to make themselves and their business known.
The next factor we can consider as very important is the fact that the e-business can be done 24 hours a day and seven days a week. Traditional businesses normally do not work on weekends and have closing times in accordance with Labor Laws. E-Business does not have any such laws or a body regulating its use. The business Executive, the average salary earner and the ordinary person can do business online at their own convenience. Whether it is purchasing of a product, service or making enquiries, e-business is just 24/7.
With e-business being 24/7, it has become very convenient for people to do business that way. Working people do not need to either rush out to buy things because the stores might be closing. Computer scientists do not have to carry computers to Microsoft office or an accessories store to purchase a software. These can be done anytime anywhere and therefore reduces the pressure on people to get to a place to have things done, get explanations or make enquires.
Also, e-business shrinks time and business. E-business bring with it radical changes, from the scope to timelines, staff size and makeup of the company. With streamlining of roles in e-Business, a company needs a workforce whose primary activities are informational and knowledge based rather than physical. When the operational procedures of a company have been computerized and put on the net, it makes the work load smaller. As customers visit sites to do business, less time is spent in the company’s office by both customers and staff. Doing business with seemingly big companies become very simple and exciting for customers. In developing countries where monies must change hands before simple information is given, the e-business will bring a lot of relief to people and organizations who deal with big companies and government departments. And with this, doing business online can e a tool for fighting corruption as it reduces the levels of human contact. Also, e-Business cut out lots of beaurocratic procedures that are normally time consuming and also enhances corruptible practice. The normal mall is such a big place it can take hours to move round the inside the mall in search of your preferred products. With e-business, with just ticking and clicking, one can mover round an e-mall in a matter of minutes. The same can be said of schools. To physically move from ones department to another or even the administration block can take a lot of time. However, with e-business this can take just a second. With e-business, going through business activities with even big companies is less time consuming and less burdensome.
The importance of e-business cannot be exhausted if it is not stated that it generates additional revenue. It is a fact that most organizations still maintain their traditional Brick and Mortar business as well as going online. This enables them increase their customer base, develop new products line and services to meet the sophisticated demands of the online customers. This in turn increases the revenue of the organization. No matter how big the traditional company is, getting into e-business will increase the revenue over the years.
Another important factor is the issue of cost reduction. With e-Business, the use of IT and related technologies help improve operational processes and procedures. There is also a lot of integration of departments and collaboration between Departments such that a lot of waste and duplication of roles and duties is eliminated. There is also the reduction of IT variety and complexity and the creation of synergies with initiatives.
With a reduction in cost and efficiency in processes, it becomes much easier to do business with the company and less costly. This invariably leads to customer retention, another important aspect of doing business. It is generally known that it is more expensive to recruit a new customer than to retain an existing customer. In view of this, it is better for an institution to get into e-Business, where new services can be added to the company’s core business and a virtual community can be created for customers to share their experience in the company. All this can be accessed in the comfort of their homes.
The shared experiences of the members of the virtual community helps management to know more about the expectation of its customers, do an integrated channel management and come out with more personalized and proactive offerings to exceed customer expectation and solidify customer retention. The ultimate of all this is that, it helps improve company image and Brand position. This is important because, for online business, Brand is more important than offline business. Research has shown that when searching for insurance purchase, 56% of potential buyers went straight to known brand name sites. And also in initiating product purchase, 60% of prospects went to known brand name sites. It is therefore to the extreme benefit of the company to build an excellent company Brand and image, by establishing your firm leadership in the market and tailoring products and services to address the needs of your customers, using innovative technology.
Despite all the importance of e-business stated above, it must be noted that, the greatest impact of e-business is seen in Decision Making in corporations.
Decision making can be said to be a purposeful selection from among a set of alternatives in the light of a given objective. It is simply about making choices and there has to be a proper balance of decision making by humans and machines. That is to say, humans make decisions and through e-business, machines can also be enabled to make decisions. Everyone in the business makes decisions but mangers normally have the strenuous task of making decisions in the company. Most of these decisions are routine such as fixing the interest rates every day, ordering for supplies, or deciding on pay increase of employees. These are known as programmed decisions because most likely the outcomes are known to the one making the decisions. Whereas decisions whose outcome are not known such as opening new outlets for the company, introducing new products, or adding another segment to one’s core business are also known as` un programmed `
According to Boone Louis E and Kurtz David L, there are 6 steps in decision making; Identify the problem/opportunity Gather relevant information to make the informed decision Develop as many alternatives as possible Evaluate alternatives to decide on the best. Decide on and implement the best alternative Follow up on the decision.
All these can be done by using e-business application.
To be able to take the right decisions, one needs to access a lot of information. In traditional Brick and Mortar business, information needed to take decisions is gathered manually. This can be laborious, tiring and often comes with a lot of mistakes. With e-business, or when using the internet as a sales channel, a more dynamic and automated can be used because decision making in the internet environment has to be made much fast. This has been necessitated by the fact that e-business has created a highly competitive environment where things move much faster than the environment of the Brick & Mortar business. Thus the organization will have to react to consumer requirements and changing market conditions more rapidly. The e-business application also helps in management decision to choose to dynamically update a site or not. This is because, the application allows for easy access to information such as the purchasing power of the customers who visit the site. Thus the e-business application has the means to measure how busy or otherwise a site is. This is very easily accessible to management wherever they are, and helps management with the tools to make quick choices. There is no need for management team to converge at one location for a meeting before the decision is made.
Again, e-business allows instant giving of feedback by customers that can be accessed by site managers worldwide. This aspect of the e-business application helps management to gather information quickly about customer needs and expectations. Once this is available it helps management make quick decisions about the company’s products and services.
Internet allows for business applications. These must operate in real-time to support management intelligence so management can make real-time decision as customers expect immediate decision when using the e-business application. Therefore, a request for an upgrade of a Credit Card cannot stay two to three days before the customer gets a response. In the same way, loan request or an account opening cannot be tolerated beyond a certain period. All these need real time processing.
E-business application is event driven which is an analytic application that analyzes business information and comes out with automated business decision in real time. In short, this capability of the e-business set it way ahead of the traditional business.
However, the decision of a accompany to go online involves a lot of initial capital investment in Information Technology, staff training and a total overhaul of the institution’s structure. It is therefore worthy to note that a sizable portion of institution’s traditional and manual way of doing business must be maintained as a backup for the online business. A bank for example cannot forget entirely about its manual processes so that on days that there is a communication problem it can still use its printed reports to continue serving customers.
In conclusion, it can be said that the e-business is very important in today’s society looking at the convenience that it gives to customers due its growth and accessibility, the excellent customer service due to competitiveness, increased revenue for the company, simplified operational procedures which leads to reduction in cost for the company. It can be said that the importance of e-business in today’s world can never be over stretched, and it contribution to Decision Making in Corporations is so profound considering that lots of information has to be analyzed and quick decisions taken, real-time decisions taken to beat the competition, dynamically updating web pages to please segmented customers and the fact that business information can be analyzes and automated decisions taken produced, makes e-business, a very essential part of modern day’s society.