Electronic commerce is the application of communication and information sharing technologies among trading partners to the pursuit of business objectives. In the real world of business four distinct types of EC mingle and interact:

• Information access provides search and retrieve capability for public domain and proprietary data archives. The most common example of this type of EC is the information service (e.g. Dialog, Nexus - Lexus, and ABI Informs) that maintains a data base and charges for access. Another example would be a case where a large manufacturer communicates engineering change notices to suppliers via dial-up access to a centralized database.

• Interpersonal communication services provide methods by which parties with mutual interests can exchange information, "discuss" ideas, and improve their cooperation. Examples include customer and supplier design groups jointly working out product specifications, updated files being sent by a publisher to a printer, and a purchasing agent using electronic mail to negotiate an expediting schedule with a supplier.

• Shopping services allow people to seek and purchase goods or services though electronic networks. This form of EC for retail sales is what comes most readily to people’s minds when they hear the term "electronic commerce". But this genre of EC can be extended in many other directions. As examples, it can apply to the purchase of used industrial equipment, commodities, or freight capacity.

• Virtual enterprises are business arrangements by which enterprises separated by geography and core expertise are able to engage in complex inter-related business activities. One example would be true supply chain integration, a situation in which planing and forecast data are transmitted quickly and accurately throughout a multi-tier supply chain. Another example would be a situation in which non-competing suppliers to a common customer use EC to allow the customer to do "one stop shopping", with the assurance that no matter how many suppliers are involved, a single phone call will bring the right materials to the right location at the right time.

Stage: Awareness Training | EC Questions

Electronic commerce is a combination of information technology, telecommunications technology, and business process to make it practical to do business in ways that could not otherwise be done. To illustrate, let’s draw on some examples from the first question ("What is EC"?). In each of these cases technology and business process must work together if EC is to be successful.

Stage: Awareness Training | EC Questions
Stage: Business Analysis

This question is as broad and difficult to answer as any general question about making a business more competitive. How for instance would you answer the familiar question: How can I generate more business? Brainstorming and inspiration are useful methods for answering this question, but the best solution will come from combining these methods with a systematic approach. As an example it would make sense to try to complete two matrices:

The more unfamiliar the territory, the greater the importance of system over inspiration. Thus to help answer the question about using EC to benefit your business we offer a systematic approach based on our virtual focus group on trends in electronic commerce. The key to discovering how EC can help your business is to answer the following question:

How can my business benefit from changes in how information
flows between me and my trading partners?

Answers to this question can be categorized along two dimensions.

What kinds of business activities can be classified in this way? Consider the following examples.

1. X-12 based EDI is used to send traditional purchase orders faster and with less expense. Without EDI purchase orders would still flow, but not as quickly and at greater expense.
   
2. Your company uses the Web to search for commodity items and used equipment that are listed in on-line catalogues. This makes shopping easier and faster, but paper catalogues are available and more than adequate for most tasks.
   
3. Engineering change notices, complete with graphics, are sent via mail or over a network. As with purchase orders the information would get be sent anyway, but is transmitted more quickly (and perhaps in a more usable form) through a network.
   
4. Evaluated receipts settlement, a system that pays on the bases of "evaluating" documents such as purchase orders and shipping receipts, and thus does away with a formal invoicing process.
   
5. Large-scale just-in-time production systems.
   
6. Concurrent engineering among your design teams and your customers’.
   
7. Vendor-managed inventory based on point of sale data capture.
   
8. Groups of non-competing suppliers forming "one stop shopping" systems for mutual customers.

By placing each of these examples into the matrix we end up with:

	Primary Business Impact			Implementation
Product/Process	Operations	Existing customers	Developing new markets	ability to foresee benefits	risk of failure	potential payoff
Improve established process	1 2 3				low	low
Enable a new process to be established	4 5 6	5 6			moderate	moderate
Allow new type of product or service to come into existence			7 8		high	high

Added to the original table is a second section, "Implementation." In its whole the table provides a way to organize EC possibilities in terms of what product or process they affect, what part of the business might be changed, and the benefits and risks of implementation.

We recommend an approach that oscillates between the systematic and the inspirational. As ideas are generated they can be placed within the table, thus providing a sense of value and risk. Working from the table, it becomes possible to decide on an acceptable level of benefit and risk, and to then search your business environment for possibilities that fit your comfort level.

Stage: Business Analysis | EC Questions
Stage: Requirements Analysis