Chapter 5: Emerging Modes of Business
Learning Objectives
- State the meaning of e-business.
- Explain the process of online buying and selling as a part of e-business.
- Distinguish e-business from traditional business.
- State benefits of switching over to electronic mode.
- Explain requirements for a firm's initiation into e-business.
- Identify major security concerns of electronic mode of doing business.
- Discuss the need for business process outsourcing.
- Appreciate the scope of business process outsourcing.
Introduction
The way business is done has undergone fundamental changes, particularly through:
- Digitisation - Conversion of content into electronic format.
- Outsourcing - Contracting out business processes.
- Internationalisation and Globalisation - Expanding business reach.
E-Business vs Traditional Business
Comparison Table
| Basis of Distinction | Traditional Business | e-Business |
|---|
| Ease of Formation | Difficult | Simple |
| Physical Presence | Required | Not Required |
| Locational Requirements | Proximity to source | None |
| Cost of Setting Up | High | Low |
| Operating Cost | High | Low |
| Nature of Contact | Indirect | Direct |
| Internal Communication | Hierarchical | Non-hierarchical |
| Response Time | Long | Instantaneous |
| Organizational Structure | Vertical | Horizontal/Flat |
| Business Processes | Sequential | Simultaneous |
| Interpersonal Touch | Much More | Less |
Applications of E-Business
- e-Procurement: Internet-based sales transactions between businesses.
- e-Bidding/e-Auction: Online bidding for goods and services.
- e-Communication/e-Promotion: Online marketing and communication strategies.
- e-Delivery: Electronic delivery of digital content and services.
- e-Trading: Online buying and selling of financial instruments.
Security and Safety of e-Transactions
Types of Risks
- Transaction Risks: Vulnerability in online transactions.
- Data Storage and Transmission Risks: Risks associated with data handling.
- Threat to Intellectual Property and Privacy Risks: Concerns over data protection.
Conclusion
E-business and outsourcing are reshaping business operations, driven by the need for efficiency and competitive advantage. These emerging modes of business continue to evolve, presenting both opportunities and challenges.