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Chapter 1 Introduction to e-business and e-commerce 13

E-business defined

Electronic business Given that Figure 1.2 depicts different types of e-commerce, what then is e-business? Let’s
(e-business) start from the definition by IBM (www.ibm.com/e-business), which was one of the first
All electronically suppliers to use the term in 1997 to promote its services:
mediated information
exchanges, both within
an organization and with e-business (e’biz’nis) – the transformation of key business processes through the use of
external stakeholders Internet technologies.
supporting the range of
business processes. Today, IBM calls the e-business services it provides for its clients ‘on-demand’ web services,
as explained in Chapter 3.
You will find that the term ‘e-business’ is used in two main ways within organizations. The
first is as a concept which can be applied to strategy and operations. For example, ‘our organiz-
ation needs an improved e-business strategy (or e-business technology)’. Secondly, ‘e-business’ is
used as an adjective to describe businesses that mainly operate online, i.e. they have no physical
presence on the high streets and seek to minimize customer service and support through
enabling ‘web self-service’, i.e. customers serve themselves before, during and after sales. In the
dot-com era e-businesses used to be known as ‘pureplays’. Amazon (www.amazon.com) and
eBay (www.ebay.com, Case Study 1.3) are the world’s two biggest e-businesses.
In an international benchmarking study analysing the adoption of e-business in SMEs the
Department of Trade and Industry emphasizes the application of technology (information
Information and
communication and communications technologies (ICTs)) in the full range of business processes, but also
technology (ICT emphasizes how it involves innovation. DTI (2000) describes e-business as follows:
or IT)
The software applications, when a business has fully integrated information and communications technologies (ICTs)
computer hardware and into its operations, potentially redesigning its business processes around ICT or completely
networks used to create
e-business systems. reinventing its business model . . . e-business, is understood to be the integration of all
these activities with the internal processes of a business through ICT. (DTI, 2000)

Referring back to Figure 1.2, the key business processes referred to in the IBM and DTI defi-
nitions are the organizational processes or units in the centre of the figure. They include
research and development, marketing, manufacturing and inbound and outbound logistics.
The buy-side e-commerce transactions with suppliers and the sell-side
Debate 1.1
e-commerce transactions with customers can also be considered to be key
How new is the e-business concept? business processes.
‘E-business is just a new label – there Figure 1.3 presents some alternative viewpoints of the relationship
is no distinction between the role of between e-business and e-commerce. In Figure 1.3(a) there is a relatively
e-business and traditional information
systems management.’ small overlap between e-commerce and e-business. From Figure 1.2 we
can reject Figure 1.3(a) since the overlap between buy-side and sell-side
e-commerce is significant. Figure 1.3(b) seems to be more realistic, and
indeed many commentators seem to consider e-business and e-commerce to be synony-
mous. It can be argued, however, that Figure 1.3(c) is most realistic since e-commerce does
not refer to many of the transactions within a business, such as processing a purchasing
order, that are part of e-business.
So e-commerce can best be conceived of as a subset of e-business and this is the perspec-
tive we will use in this book. Since the interpretation in Figure 1.3(b) is equally valid, what is
important within any given company is that managers involved with the implementation of
e-commerce or e-business are agreed on the scope of what they are trying to achieve!
In Chapter 8 we go on to consider how e-marketing, a concept now used by many mar-
keting professionals, relates to the concepts of e-business and e-commerce.
Intranet
Intranets and extranets
A private network within a
single company using
Internet standards to The majority of Internet services are available to any business or consumer that has access to
enable employees to the Internet. However, many e-business applications that access sensitive company information
access and share
information using web require access to be limited to qualified individuals or partners. If information is restricted to
publishing technology. employees inside an organization, this is an intranet as is shown in Figure 1.4.