Electronic Commerce

The Internet has become a great source of information for more than a decade now. It is also blooming into a place for transactions. Business transactions are now increasingly being conducted via the Internet or the ‘web’. After all, a business transaction involves a lot more transaction or exchange of information than that of the physical goods.

The physical transactions are far fewer than the transactions of information. Traditionally, this information flow has involved paper work such as gathering requisitions from the manufacturing and or materials and/or quality departments, sending letters of enquiry to the prospective suppliers, inviting tenders or quotations again in the form of letters, and after a purchase decision is made, transactions such as a purchase order mentioning the details of the quantity, quality and delivery specifications, the invoice or the bill from the supplier mentioning the amount payable, the confirmation of receipt of the goods from the buyer company, and finally the payment. All this paper work is nothing but a flow of information back and forth from one business organization to the other business organization. With the advent of the ‘web’ or the Internet, the entire information flow can be completed in a few seconds or minutes, sometimes literally with the click of the computer mouse.

Fast, Cheap and Convenient:

The very property of being time-efficient imparts several other values to such a transaction:
(i) Buying companies now have more time to search and select appropriate vendors who would fit the bill. This may result in a wider choice and an efficient selection of vendors.
(ii) Time is not wasted on avoidable paperwork, courier or mail delays. Lead times for procurement would be substantially lower.
(iii) For the same reason as above, lead times to supply would be substantially lower, almost Just-in-Time.
(iv) Many of the benefits of a Just-in-Time system could be realized, such as lowered inventories, better flexibility and lowered cycle times.
(v) New product designs could also be done with more information and quicker flow of information about the quality, cost and availability of components, parts, supplies, equipments, apparatus, testing facilities, etc. In an enterprise, the data base could be accessible to any authorized person at any location.
(vi) Being time-efficient improves the ‘connectivity’ there is a possibility of frequent and quick feedback between the two transacting organizations which can improve the performance of operations for both the transacting organizations.

Web and Relationships:

The very word ‘web’ and ‘Internet’ signify the connectivity between different organizations. Relationship is the order of the day and Internet makes that possible. E-commerce or electronic commerce is about business or commercial transactions involving transfer of information on the Internet. There are various forms of interaction.

There are retail sites like Amazon.com where the website acts as an intermediary between the producers and the customers. This site posts various books, toys and other such items for sale where the price of the product is mentioned along with a brief description. The price is fixed by the website; the products on sale are also selected by the site. The customer places an order on the site and the site takes the responsibility to fill that order.

There are some auction sites which bring the seller and buyer together and provide for the negotiation of the price of the product/service being sold. eBay and Priceline.com are two such examples. Customers can also bid on airline tickets, among other things, on such sites.

A business web (or B-web for short) such as America Online facilitates sharing of information between online organizations.

Companies like Dell Computers and Cisco Systems have set up websites to transact business with both the customer and the supplier. Dell’s products are mostly sold over the Internet and it integrates the partnering companies (suppliers) to meet the customer needs.–

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