Posing New Challenges

The shift of commerce from the physical
world to the virtual world will force companies to get in sync with
ecommerce or left behind by tomorrow’s business.

Electronic commerce (EC) is the use
of computer net-works–the internet, intranets, extranets and private
networks–to complete business transactions, Prior to 1997, web-based
EC still was in an embryonic stage. There was uncertainty about
which products and services should be used to develop commerce sites,
to provide web-enabled content such as advertising or publishing,
or to support business activities such as sales or customer service.
EC was identified mainly with electronic data interchange (EDI)–an
older, less-flexible technology that seemed out of step with the
new ways of doing business electronically via the internet.

In 1998, the concept of EC has begun
to crystallize in the thinking of most business people. EC-enabling
tools and technologies–for example, products and services for site
development and operations–are recognized as a multi-billion-dollar
industry in their own right. Perhaps more important, EC now is understood
to include the customer interactions of advertising, product selection,
contract negotiation, and so on–all the way through to the product
and services delivery phase, including logistics, payment, settlement
and clearance. As the scope of EC’s definition has expanded, the
technologies that support EC have expanded as well. The term electronic
business has been introduced, which includes not only EC but all
web-enabled core business processes, extensive customer integration
and connectivity, and strategic transformation of business processes
to exploit the efficiencies these technologies make possible.

Due to differences in the markets involved,
vendors have outlined their capabilities in two categories.

  • Business-to-Business EC–The use
    of private networks or the internet to automate business transactions
    between companies.
  • Business-to-Consumer EC–The use
    of the internet to sell merchandise or provide services to customers
    in much the same way as a store or a catalog at the level of the
    underlying technologies, the differences in these categories are
    less apparent; for example, Microsoft’s Site Server Commerce Edition
    and Open Market’s OM-Transact 4 have features that apply to both
    categories. In fact, many of the business-to-business tools grew
    out of those developed initially for the business-to-consumer
    market. Vendors such as iCat and Open Market, for example, are
    beginning to move aggressively into the business-to-business side
    of EC as well.

Many of the advertising supported
websites providing online information and web versions of print
publications do not distinguish clearly between ‘business’ and ‘consumer’
audiences; consequently, advertisements may be targeted at business
purchases even if the content is aimed at individuals. On the other
hand, a significant number of websites, especially in financial
services are aimed not at selling new goods or services but at providing
customer service and transactional capabilities to existing customers.

To succeed, commerce sites targeting
consumers need to offer convenience, control and selection while
saving both time and money. Business users have similar needs, but
other factors may determine a site’s use and success–for example,
contractual terms and conditions, availability or settlement and
fulfillment options.


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