You are here


27 August, 2015 - 17:26

The power of computers in transforming society is perhaps most obvious today in the way communications have changed. Our society has evolved from one that relied on face-to-face communication, to one in which phones became the primary medium, to today’s society that is increasingly dependent on e-mail and instant messages. In essence, the richness of older media has been sacrificed for efficiency and effectiveness. In other words, the phone took away the ability to detect emotions through an individual’s appearance, and e-mail took away the ability to detect emotions through voice inflection.


The Internet expanded the impact on society since it can substitute for such a wide range of personal and commercial interaction. The power of the Internet to support the sales and marketing of products efficiently has led to incredible levels of Web activity to support electronic commerce (e-commerce). E-commerce is a commonly used term that describes the business events associated with the Order-to-Cash and Purchase-to-Pay business processes, which encompass electronically ordering goods and services, and often the associated electronic payments. Although frequently used interchangeably with e-business, e-commerce is really only one part of what e-business encompasses. As noted in Chapter 1, e-business is the involvement of two (or more) individuals and/or organizations in the completion of electronically based business events (i.e., the partial or complete elimination of paper documentation and human intervention during business processes in favor of more efficient electronically based communication). These electronically based business events entail the interconnection of the underlying back-office processes of both organizations. Pricewaterhouse-Coopers was one of the first firms to use the term e-business to broaden the narrower view of e-commerce as support of the sales process. In 1999, the firm’s Web site included a statement in its discussion of e-business that recommended looking beyond the marketing aspects of a firm to see that e-business involves “optimizing business processes, enhancing human capital, harnessing technology, and managing risk and compliance.” We use the term “e-business” to refer to any interorganizational business activities conducted by electronic means, including e-commerce. We will sometimes use the term e-commerce when specifically discussing Internet-enabled sales support.


Review Question

Briefly define e-business and e-commerce. How are they related?


A by-product of e-business is often the elimination of the staff that would normally serve as the intermediary between the two parties to the business event. In e-commerce, bypassing the sales staff speeds up the business event by eliminating the interaction with a salesperson, establishing a direct and therefore immediate linkage to the vendor’s own Information System (which for many organizations participating in e-business today would be their enterprise system), and facilitating the electronic transfer of funds for immediate payment. The business event is completed more quickly. Additionally, the purchaser may electronically solicit pricing and quickly determine the best price—increasing price efficiency as well. Often, the computer, eliminating any waste of a purchaser’s time on such activities, does the price checking automatically.


It is not just big organizations that are using such technologies to speed up a process. For instance, your favorite pizza joint or sandwich shop may very well accept e-mail or fax ordering—basically allowing you to avoid being put on hold when you place your order and avoid the risk of the phone answerer getting the wrong ingredients on your pizza or sandwich. The Domino’s Pizza chain allows Internet ordering in some markets. You simply enter the order yourself—reducing the business’s need for people to answer the phones and take orders.

With the Internet, many more organizations now have the opportunity to reach customers directly through electronic communication. The potential of this distribution channel has led to the explosion of e-business over the Internet. In this chapter, we will explore a variety of technologies that enable e-business. We will also learn about the various forms of e-business that are used by organizations in today’s business environment.

One final note before we proceed. Throughout this text we highlight the discussion of e-business as it relates to various business processes, controls, and systems development issues. Since this chapter is specifically on e-business, we will reserve use of the e-business icon to those places in the chapter where a particularly critical e-business technology or concept is discussed.