Electronic business

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Electronic business (also known as online business or e-business) is any kind of business or commercial activity that includes sharing information across the internet. [1] Commerce constitutes the exchange of products and services between businesses, groups, and individuals; [2] and can be seen as one of the essential activities of any business. [3]

Contents

Electronic commerce focuses on the use of information and communication technology to enable the external activities and relationships of the business with individuals, groups, and other businesses, while e-business refers to business with help of the internet. Electronic business differs from electronic commerce as it does not only deal with online transactions of selling and buying of a product and/or service but also enables to conduct of business processes (inbound/outbound logistics, manufacturing & operations, marketing and sales, customer service) within the value chain through internal or external networks. [4] The term "e-business" was coined by IBM's marketing and Internet team in 1996. [5] [6]

Market participants in electronic business

Electronic business can take place between a very large number of market participants; it can be between business and consumer, private individuals, public administrations, or any other organizations such as non-governmental organizations (NGOs). These various market participants can be divided into three main groups:

  1. Business (B)
  2. Consumer (C)
  3. Administration (A)

All of them can be either buyers or service providers within the market. There are nine possible combinations for electronic business relationships. B2C and B2B belong to E-commerce, while A2B and A2A belong to the E-government sector which is also a part of the electronic business.

History

One of the founding pillars of electronic business was the development of the Electronic Data Interchange (EDI) electronic data interchange. This system replaced traditional mailing and faxing of documents with a digital transfer of data from one computer to another, without any human intervention. Michael Aldrich is considered the developer of the predecessor to online shopping. In 1979, the entrepreneur connected a television set to a transaction processing computer with a telephone line and called it "teleshopping", meaning shopping at distance. From the mid-nineties, major advancements were made in the commercial use of the Internet. Amazon, which launched in 1995, started as an online bookstore and grew to become nowadays the largest online retailer worldwide, selling food, toys, electronics, apparel and more. Other successful stories of online marketplaces include eBay or Etsy. In 1994, IBM, with its agency Ogilvy & Mather, began to use its foundation in IT solutions and expertise to market itself as a leader of conducting business on the Internet through the term "e-business." [7] Then CEO Louis V. Gerstner, Jr. was prepared to invest $1 billion to market this new brand. [8]

After conducting worldwide market research in October 1997, IBM began with an eight-page piece in The Wall Street Journal that would introduce the concept of "e-business" and advertise IBM's expertise in the new field. [7] IBM decided not to trademark the term "e-business" in the hopes that other companies would use the term and create an entirely new industry. [8] However, this proved to be too successful and by 2000, to differentiate itself, IBM launched a $300 million campaign about its "e-business infrastructure" capabilities. [8] Since that time, the terms, "e-business" and "e-commerce" have been loosely interchangeable and have become a part of the common vernacular. [9]

According to the U.S. Department Of Commerce, the estimated retail e-commerce sales in Q1 2020 were representing almost 12% of total U.S. retail sales, against 4% for Q1 2010. [10]

Business model

The transformation toward e-business is complex and in order for it to succeed, there is a need to balance between strategy, an adapted business model (e-intermediary, marketplaces), right processes (sales, marketing) and technology (Supply Chain Management, Customer Relationship Management). When organizations go online, they have to decide which e-business models best suit their goals. [11] A business model is defined as the organization of product, service and information flows, and the source of revenues and benefits for suppliers and customers. The concept of the e-business model is the same but used in online presence.

Revenue model

A key component of the business model is the revenue model or profit model, which is a framework for generating revenues. It identifies which revenue source to pursue, what value to offer, how to price the value, and who pays for the value. It is a key component of a company's business model. It primarily identifies what product or service will be created in order to generate revenues and the ways in which the product or service will be sold.

Without a well-defined revenue model, that is, a clear plan of how to generate revenues, new businesses will more likely struggle due to costs that they will not be able to sustain. By having a revenue model, a business can focus on a target audience, fund development plans for a product or service, establish marketing plans, begin a line of credit and raise capital.

E-commerce

E-commerce (short for "electronic commerce") is trading in products or services using computer networks, such as the Internet. Electronic commerce draws on technologies such as mobile commerce, electronic funds transfer, supply chain management, Internet marketing, online transaction processing, electronic data interchange (EDI), inventory management systems, and automated data collection. Modern electronic commerce typically uses the World Wide Web for at least one part of the transaction's life cycle, although it may also use other technologies such as e-mail.

Concerns

While much has been written of the economic advantages of Internet-enabled commerce, there is also evidence that some aspects of the internet such as maps and location-aware services may serve to reinforce economic inequality and the digital divide. [12] Electronic commerce may be responsible for consolidation and the decline of mom-and-pop, brick and mortar businesses resulting in increases in income inequality. [13] [14] [15]

Security

E-business systems naturally have greater security risks than traditional business systems, therefore it is important for e-business systems to be fully protected against these risks. A far greater number of people have access to e-businesses through the internet than would have access to a traditional business. Customers, suppliers, employees, and numerous other people use any particular e-business system daily and expect their confidential information to stay secure. Hackers are one of the great threats to the security of e-businesses. Some common security concerns for e-Businesses include keeping business and customer information private and confidential, the authenticity of data, and data integrity. Some of the methods of protecting e-business security and keeping information secure include physical security measures as well as data storage, data transmission, anti-virus software, firewalls, and encryption to list a few. [16] [17]

Privacy and confidentiality

Confidentiality is the extent to which businesses makes personal information available to other businesses and individuals. [18] With any business, confidential information must remain secure and only be accessible to the intended recipient. However, this becomes even more difficult when dealing with e-businesses specifically. To keep such information secure means protecting any electronic records and files from unauthorized access, as well as ensuring safe transmission and data storage of such information. Tools such as encryption and firewalls manage this specific concern within e-business. [17]

Authenticity

E-business transactions pose greater challenges for establishing authenticity due to the ease with which electronic information may be altered and copied. Both parties in an e-business transaction want to have the assurance that the other party is who they claim to be, especially when a customer places an order and then submits a payment electronically. One common way to ensure this is to limit access to a network or trusted parties by using a virtual private network (VPN) technology. The establishment of authenticity is even greater when a combination of techniques are used, and such techniques involve checking "something you know" (i.e. password or PIN), "something you need" (i.e. credit card), or "something you are" (i.e. digital signatures or voice recognition methods). Many times in e-business, however, "something you are" is pretty strongly verified by checking the purchaser's "something you have" (i.e. credit card) and "something you know" (i.e. card number). [17]

Data integrity

Data integrity answers the question "Can the information be changed or corrupted in any way?" This leads to the assurance that the message received is identical to the message sent. A business needs to be confident that data is not changed in transit, whether deliberately or by accident. To help with data integrity, firewalls protect stored data against unauthorized access, while simply backing up data allows recovery should the data or equipment be damaged. [17]

Non-repudiation

This concern deals with the existence of proof in a transaction. A business must have the assurance that the receiving party or purchaser cannot deny that a transaction has occurred, and this means having sufficient evidence to prove the transaction. One way to address non-repudiation is using digital signatures. [17] A digital signature not only ensures that a message or document has been electronically signed by the person, but since a digital signature can only be created by one person, it also ensures that this person cannot later deny that they provided their signature. [19]

Access control

When certain electronic resources and information is limited to only a few authorized individuals, a business and its customers must have the assurance that no one else can access the systems or information. There are a variety of techniques to address this concern including firewalls, access privileges, user identification and authentication techniques (such as passwords and digital certificates), Virtual Private Networks (VPN), and much more. [17]

Availability

This concern is specifically pertinent to a business's customers as certain information must be available when customers need it. Messages must be delivered in a reliable and timely fashion, and information must be stored and retrieved as required. Because the availability of service is important for all e-business websites, steps must be taken to prevent disruption of service by events such as power outages and damage to physical infrastructure. Examples to address this include data backup, fire-suppression systems, Uninterrupted Power Supply (UPS) systems, virus protection, as well as making sure that there is sufficient capacity to handle the demands posed by heavy network traffic. [17]

Cost structure

The business internet which supports e-business has a cost to maintain of about $2 trillion in outsourced IT dollars just in the United States alone. With each website custom crafted and maintained in code, the maintenance burden is enormous. In the twenty-first century, look for new businesses that will help standardize the look and feel of the internet presence of a business to be more uniform in nature to help reduce the cost of maintenance.

The cost structure for e-businesses varies a lot from the industry they operate in. There are two major categories that have commune characteristics. The first group is fully digital businesses that do not provide any products or services outside of the digital world. This includes for example software companies, social networks, etc. For those, the most significant operational cost is the maintenance of the platform. Those costs are almost unrelated to every additional customer the business acquires, making the marginal cost almost equal to zero. This is one of the major advantages of that kind of business. The second group are businesses that provide services or products outside of the digital world, like online shops, for those costs are much harder to determine. Some common advantages over traditional businesses are lower marketing cost, lower inventory cost, lower payroll, lower rent, etc. [20]

Security solutions

When it comes to security solutions, sustainable electronic business requires support for data integrity, strong authentication, and privacy. Numerous things can be done in order to protect our E-Business. Starting off with basic things like switch to HTTPS from old outdated HTTP protocol which is more vulnerable to attacks. Furthermore, the other things that require full attention are securing servers and admin panels, payment gateway security, antivirus and anti-malware software, using firewalls is also a must, regular updates, and back up our data.

Access and data integrity

There are several different ways to prevent access to the data that is kept online. One way is to use anti-virus software. This is something that most people use to protect their networks regardless of the data they have. E-businesses should use this because they can then be sure that the information sent and received to their system is clean. [17] A second way to protect the data is to use firewalls and network protection. A firewall is used to restrict access to private networks, as well as public networks that a company may use. The firewall also has the ability to log attempts into the network and provide warnings as it is happening. They are very beneficial to keep third parties out of the network. Businesses that use Wi-Fi need to consider different forms of protection because these networks are easier for someone to access. They should look into protected access, virtual private networks, or internet protocol security. [17] Another option they have is an intrusion detection system. This system alerts when there are possible intrusions. Some companies set up traps or "hot spots" to attract people and are then able to know when someone is trying to hack into that area. [17]

Encryption

Encryption, which is actually a part of cryptography, involves transforming texts or messages into a code that is unreadable. These messages have to be decrypted in order to be understandable or usable for someone. There is a key that identifies the data to a certain person or company. With public-key encryption, there are actually two keys used. One is public and one is private. The public one is used for encryption and the private one for decryption. The level of the actual encryption can be adjusted and should be based on the information. The key can be just a simple slide of letters or a completely random mix-up of letters. This is relatively easy to implement because there is software that a company can purchase. A company needs to be sure that its keys are registered with a certificate authority. [17]

Digital certificates

The point of a digital certificate is to identify the owner of a document. This way the receiver knows that it is an authentic document. Companies can use these certificates in several different ways. They can be used as a replacement for user names and passwords. Each employee can be given these to access the documents that they need from wherever they are. These certificates also use encryption. They are a little more complicated than normal encryption, however. They actually used important information within the code. They do this in order to assure the authenticity of the documents as well as confidentiality and data integrity which always accompany encryption. [17] Digital certificates are not commonly used because they are confusing for people to implement. There can be complications when using different browsers, which means they need to use multiple certificates. The process is being adjusted so that it is easier to use. [17]

Digital signatures

A final way to secure information online would be to use a digital signature. If a document has a digital signature on it, no one else is able to edit the information without being detected. That way if it is edited, it may be adjusted for reliability after the fact. In order to use a digital signature, one must use a combination of cryptography and a message digest. A message digest is used to give the document a unique value. That value is then encrypted with the sender's private key. [17]

Advantages and disadvantages

Advantages

When looking at e-business we have many advantages, which are mostly connected to making doing business easier. The benefits of implementing e-business tools are in the streamlining of business processes and not so much in the use of technology. Here are some:

Disadvantages

Despite all the limits, there are also some disadvantages that we need to address. The most common limitations of electronic business are:

See also

Related Research Articles

E-commerce is the activity of electronically buying or selling products and services on online platforms or over the Internet. E-commerce draws on technologies such as mobile commerce, electronic funds transfer, supply chain management, Internet marketing, online transaction processing, electronic data interchange (EDI), inventory management systems, and automated data collection systems. E-commerce is the largest sector of the electronics industry and is in turn driven by the technological advances of the semiconductor industry.

Electronic services or e-services are services that make use of information and communication technologies (ICTs). The three main components of e-services are:

  1. service provider;
  2. service receiver; and
  3. the channels of service delivery

A personal identification number is a numeric passcode used in the process of authenticating a user accessing a system.

Deep packet inspection (DPI) is a type of data processing that inspects in detail the data being sent over a computer network, and may take actions such as alerting, blocking, re-routing, or logging it accordingly. Deep packet inspection is often used for baselining application behavior, analyzing network usage, troubleshooting network performance, ensuring that data is in the correct format, checking for malicious code, eavesdropping, and internet censorship, among other purposes. There are multiple headers for IP packets; network equipment only needs to use the first of these for normal operation, but use of the second header is normally considered to be shallow packet inspection despite this definition.

<span class="mw-page-title-main">Online banking</span> Internet-based financial transactions

Online banking, also known as internet banking, virtual banking, web banking or home banking, is a system that enables customers of a bank or other financial institution to conduct a range of financial transactions through the financial institution's website or mobile app. Since the early 2000s this has become the most common way that customers access their bank accounts.

Internet security is a branch of computer security. It encompasses the Internet, browser security, web site security, and network security as it applies to other applications or operating systems as a whole. Its objective is to establish rules and measures to use against attacks over the Internet. The Internet is an inherently insecure channel for information exchange, with high risk of intrusion or fraud, such as phishing, online viruses, trojans, ransomware and worms.

<span class="mw-page-title-main">Online shopping</span> Form of electronic commerce

Online shopping is a form of electronic commerce which allows consumers to directly buy goods or services from a seller over the Internet using a web browser or a mobile app. Consumers find a product of interest by visiting the website of the retailer directly or by searching among alternative vendors using a shopping search engine, which displays the same product's availability and pricing at different e-retailers. As of 2020, customers can shop online using a range of different computers and devices, including desktop computers, laptops, tablet computers and smartphones.

Secure Electronic Transaction (SET) is a communications protocol standard for securing credit card transactions over networks, specifically, the Internet. SET was not itself a payment system, but rather a set of security protocols and formats that enabled users to employ the existing credit card payment infrastructure on an open network in a secure fashion. However, it failed to gain attraction in the market. Visa now promotes the 3-D Secure scheme.

An e-commerce payment system facilitates the acceptance of electronic payment for offline transfer, also known as a subcomponent of electronic data interchange (EDI), e-commerce payment systems have become increasingly popular due to the widespread use of the internet-based shopping and banking.

An information security audit is an audit of the level of information security in an organization. It is an independent review and examination of system records, activities, and related documents. These audits are intended to improve the level of information security, avoid improper information security designs, and optimize the efficiency of the security safeguards and security processes.

<span class="mw-page-title-main">Verifone</span> Multinational point-of-sale equipment manufacturer

Verifone, Inc. is an American multinational corporation headquartered in Coral Springs, Florida. Verifone provides technology for electronic payment transactions and value-added services at the point-of-sale. Verifone sells merchant-operated, consumer-facing and self-service payment systems to the financial, retail, hospitality, petroleum, government and healthcare industries. The company's products consist of POS electronic payment devices that run its own operating systems, security and encryption software, and certified payment software, and that are designed for both consumer-facing and unattended environments.

Electronic governance or e-governance is the application of information technology for delivering government services, exchange of information, communication transactions, integration of various stand-alone systems between government to citizen (G2C), government-to-business (G2B), government-to-government (G2G), government-to-employees (G2E) as well as back-office processes and interactions within the entire governance framework. Using e-governance, government services are made available to citizens through IT. The three main target groups that can be distinguished in governance concepts are government, citizens, and businesses/interest groups.

Consumer-to-business (C2B) is a business model in which consumers (individuals) create value and businesses consume that value. For example, when a consumer writes reviews or when a consumer gives a useful idea for new product development then that consumer is creating value for the business if the business adopts the input. In the C2B model, a reverse auction or demand collection model, enables buyers to name or demand their own price, which is often binding, for a specific good or service. Inside of a consumer to business market the roles involved in the transaction must be established and the consumer must offer something of value to the business.

Privacy-enhancing technologies (PET) are technologies that embody fundamental data protection principles by minimizing personal data use, maximizing data security, and empowering individuals. PETs allow online users to protect the privacy of their personally identifiable information (PII), which is often provided to and handled by services or applications. PETs use techniques to minimize an information system's possession of personal data without losing functionality. Generally speaking, PETs can be categorized as either hard or soft privacy technologies.

In computing, managed security services (MSS) are network security services that have been outsourced to a service provider. A company providing such a service is a managed security service provider (MSSP) The roots of MSSPs are in the Internet Service Providers (ISPs) in the mid to late 1990s. Initially, ISP(s) would sell customers a firewall appliance, as customer premises equipment (CPE), and for an additional fee would manage the customer-owned firewall over a dial-up connection.

Cyber crime, or computer crime, refers to any crime that involves a computer and a network. The computer may have been used in the commission of a crime, or it may be the target. Netcrime refers, more precisely, to criminal exploitation of the Internet. Issues surrounding this type of crime have become high-profile, particularly those surrounding hacking, copyright infringement, identity theft, child pornography, and child grooming. There are also problems of privacy when confidential information is lost or intercepted, lawfully or otherwise.

There are many types of e-commerce models, based on market segmentation, that can be used to conducted business online. The 6 types of business models that can be used in e-commerce include: Business-to-Consumer (B2C), Consumer-to-Business (C2B), Business-to-Business (B2B), Consumer-to-Consumer (C2C), Business-to-Administration (B2A), and Consumer-to-Administration

Utimaco Atalla, founded as Atalla Technovation and formerly known as Atalla Corporation or HP Atalla, is a security vendor, active in the market segments of data security and cryptography. Atalla provides government-grade end-to-end products in network security, and hardware security modules (HSMs) used in automated teller machines (ATMs) and Internet security. The company was founded by Egyptian engineer Mohamed M. Atalla in 1972. Atalla HSMs are the payment card industry's de facto standard, protecting 250 million card transactions daily as of 2013, and securing the majority of the world's ATM transactions as of 2014.

Human rightsandencryption are often viewed as interlinked. Encryption can be a technology that helps implement basic human rights. In the digital age, the freedom of speech has become more controversial; however, from a human rights perspective, there is a growing awareness that encryption is essential for a free, open, and trustworthy Internet.

Electronic Commerce Modeling Language (ECML) is a protocol which enables the e-commerce merchants to standardize their online payment processes. Through the application of ECML, customers' billing information in their digital wallet can be easily transferred to fill out the checkout forms.

References

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  2. ↑ James Stephenson (1942), Principles and Practice of Commerce, London: Sir Issac Pitman & Sons, Ltd, p. 14
  3. ↑ Oxford Living Dictionaries. Archived from the original on May 1, 2019. business [:] 2 The practice of making one's living by engaging in commerce.
  4. ↑ Beynon-Davies P. (2004). E-Business. Palgrave, Basingstoke. ISBN   1-4039-1348-X
  5. ↑ Gerstner, L. (2002). Who says Elephants Can't Dance? Inside IBM's Historic Turnaround. pg 172. ISBN   0-06-052379-4
  6. ↑ Amor, D. (1999). The e-business (r)evolution . Upper Saddle River: Prentice Hall. ISBN   9780130851239.
  7. 1 2 Pettit, Raymond (2012). Learning From Winners: How the ARF Ogilvy Award Winners Use Market Research to Create Advertising Success. Taylor & Francis. pp. 32–33. ISBN   9781136676765 . Retrieved 2014-05-31.
  8. 1 2 3 Meyer, Marc H. (2007). The Fast Path to Corporate Growth: Leveraging Knowledge and Technologies to New Market Applimcations. Oxford University Press. p. 30. ISBN   978-0195180862.
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  10. ↑ "Quarterly Retail E-Commerce Sales 1st Quarter 2022" (PDF) (Press release). US Census Bureau. 19 May 2022. Retrieved 12 August 2022.
  11. ↑ Paul Marson, (2000), Electronic Commerce - strategies & models for B2B trading, pp.31, John Wiley & Sons, Ltd, ISBN   0-471-72029-1
  12. ↑ Badger, Emily (6 February 2013). "How the Internet Reinforces Inequality in the Real World". The Atlantic. Retrieved 2013-02-13.
  13. ↑ "E-commerce will make the shopping mall a retail wasteland" ZDNet, January 17, 2013
  14. ↑ "'Free Shipping Day' Promotion Spurs Late-Season Online Spending Surge, Improving Season-to-Date Growth Rate to 16 Percent vs. Year Ago" Comscore, December 23, 2012
  15. ↑ "The Death of the American Shopping Mall" The Atlantic — Cities, December 26, 2012
  16. ↑ University of Pittsburgh, comp. e-Business Resource Group Security Guidelines. Publication. 5 August 2003.
  17. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 eCommerce theme by Potenza
  18. ↑ Westfall, Joseph (2010). "Privacy: Electronic Information and the Individual". Santa Clara University. Markkula Center for Applied Ethics. Archived from the original on 2010-07-11. Retrieved 30 November 2010.
  19. ↑ Awati, Rahul. "What Is Nonrepudiation? - Definition". TechTarget. Retrieved 12 August 2022.
  20. ↑ Rodrigue, J-P. (28 November 2017). "Comparison Between Retail and E-commerce Cost Structures for a $150 Apparel Piece". The Geography of Transport Systems. Retrieved 5 June 2021.
  21. 1 2 "Benefits and Limitations of e-Business : Dis-advantages, Solved Questions". Toppr-guides. 2018-03-10. Archived from the original on 2020-07-30. Retrieved 2020-05-29.
  22. ↑ "Advantages Of E-Business in Today's World | Sri Lanka Tourism Development Authority". www.sltda.lk. Archived from the original on 2020-02-20. Retrieved 2020-05-29.
  23. ↑ "Leaving Facebook". www.facebook.com. Retrieved 2020-05-29.
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