E-Business and E-Purchasing: Developments and Trends
Technological advancement and the introduction of computer-driven technologies in the business landscape have influenced how business is managed today. Computer-driven technologies are making it possible to turn out small runs of increasingly customized goods aimed at niche markets. Smart companies are moving from the production of long runs of commodity products to short runs of “higher value added” products. Murphy (1998) described a new business model or paradigm that he calls alternatively an “internetworked (virtual) enterprise” or “extended enterprise.
” These new enterprises “encompass channel partners, remote workers, suppliers, distributors, and consumers through a secure Web-based global network. ” Infrastructure to support this new development is provided by the Internet. The Internet allows companies to become decentralized and operate within the digital environment. Companies can position themselves in the Web in various forms. The purpose of each varies. At a corporate level, alternatives for the Web can be categorized in order of increasing commitment as follows:
- information only;
- interactive communications tool;
- channel to market (e-Commerce);
- separate online business;
- integration with traditional business strategy;
Transformation of traditional business to the Web Structurally, a website can be classified as: ‘bricks and mortar’ – traditional business model; the Web site is brochureware only; ‘clicks and mortar’ – the company pursues online and offline marketing and transactions; ‘clicks only’ – the entire business model is online, with little or no physical presence (such companies are also known as ‘dotcoms’ or ‘pureplays’ ).
Some of the major trends associated with recent developments in e-business include web-based platforms, content, search engines and database management, integration and security. When the dot. com bubble bursts in the late 90’s, e-business practitioners became more cautious and vigilant regarding their business practices. Competition on cyberspace also tightened with more businesses joining the bandwagon. In the web-based platforms, several e-business server applications were introduced.
Application vendors like IBM, BEA, Sun, ATG and others focused on “core set of infrastructure services like session management, transaction management, user management, security, logging, auditing, scalability solutions and ways of encapsulating business services. ” Efficient management of content and web-based data is an imperative in successful e-business ventures. Various vendors offered e-business enterprises solutions to manage their database that are frequently accessed internally and externally.
Vendors like Interwoven, Vignette, Microsoft and IBM offered to organize and manage information including the processes involved in making information available and defined specific roles to enable e-businesses to access data from different channels. Since many e-businesses are modeled after the ‘click and mortar’ structure, integration of online and offline activities is important to make e-businesses work. Finally, most e-businesses had increased the security level of transactions online.
Infrastructures were established so payments made online would be secure. Privacy has become a prominent issue in e-business. With the introduction of introduction of smartcards, authentication devices and real-time fraud detection using sophisticated bank systems, security levels at online transactions increased. Alternative online payment like SSL and Paypal offered secure payment systems. E-Purchasing Developments and Trends E-purchasing offered an alternative and more efficient manner of purchasing for many businesses.
Some of the benefits offered by e-purchasing include “faster sourcing, new sources of supply, improved comparison shopping, lower overall operating costs, lower prices paid, more control over spending and inventory, and more efficient use of sourcing personnel. ” E-purchasing is comprised of two main divisions: e-procurement and e-sourcing. E-procurement allows users to requisition, authorize, order, issue receipts and provide payment processes for some products or services.
E-procurement offered the automation of the major activities involved in buying and selling goods. E-sourcing on the other hand is a relatively new development and required some specialization. In e-sourcing, the transactions involved are dependent on the decisions of the buyers. When using e-sourcing as a purchasing tool, the specialized buyer must have knowledge of specifications, authorized to request for quotations, negotiate and evaluate on behalf of the company and enter into a contract or agreement.
A major development in e-purchasing activities is the widespread use of the Internet to advertise and promote products and services. The Internet provides the necessary information for suppliers to discover which companies would be requiring their goods and services. Consequently, the Internet is also where most buyers gather information on the goods they wish to purchase. The implementation of procurement websites allowed potential contractors and suppliers to access information without having to go through the physical purchasing departments of the companies.
Listed on the websites are information pertaining to the product, services or requirements including procedures, bid price limits and other pertinent information. Several web-based procurement intermediaries took the responsibilities of the purchasing departments of companies like Commerce One, MySAP, Ariba or C@Content. These virtual companies provide catalogues, price comparisons and even payment processing on behalf of the companies that engage their services.
Direct purchasing is the emerging trend in procurement where it allowed buyers and sellers to transact directly on the web without having to go through the purchasing departments of the companies selling or buying goods and services. Digital order processing, tracking and delivery are also additional features in e-purchasing platforms that allow customers to keep track or trace the shipment of their purchases. Tracking systems supply the customers with information on the progress of their orders until they would receive the goods.
Bibliography
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