Benefits of E-Business
Some of the organisational benefits of doing business over the internet include the
following:
Business can be conducted 24-hours-a-day, seven-days-a-week.
Products can be supplied to anyone, anywhere in the world (as long as there is an
economic and reliable distribution channel). – No Geographical Limitation
Suppliers can build a one-to-one relationship with customers. Through search
tools and customer profiles, information can be tailored to customer requirements
on demand. Direct communication results in improved pre and post-sales support.
Customers can access up-to-date information – expensive printed catalogues and
service guides can be replaced by a single electronic product database (which
must be kept up to date at all times).
Email distribution is cheaper than direct mail and providing the information on a
website is cheaper still if users can be encouraged to access it for themselves.
Routine business operations can be automated, saving time and money – the
supply chain is shortened so delivery times and costs are reduced.
Staff costs can be reduced – standard enquiries and sales can be handled
automatically via software, leaving staff with time to handle the difficult or higher
added-value transactions.
Websites can be linked with customer databases and provide much greater
insights into customer buying behaviour and needs.
Allow employees to process a greater level of work in a shorter period by using
collaborative work spaces, share storages, streamlined work flow system.
Companies can link directly to suppliers, check availability of products, and then
place orders and track shipments without delay or human assistance. In an
increasingly competitive world, the best businesses are using new technologies to
clarify customer demand, target marketing efforts more precisely, tighten
business processes, and investigate new methods of distribution.
A well-run and efficient e-commerce operation will deliver the following benefits to
consumers.
24-hour shopping, seven-days-a-week.
Lower prices – because of reduced operating costs and wider competition.
Ease of use when identifying and browsing the choices available.
Drawbacks of E-Business
Not all customers use internet
One time setup cost – Website development/Increased IT Staff/Integration with
current system –
Security Risks – Hacking/Virus/Data Privacy
Legal Complexity
Risk of Obsolescence with all technology makes the existing one redundant
Prices charged for many technologically driven services are likely to have a higher
price than those standard service so that to recover the cost of any investments.
Social and employment costs of e-commerce
Although the benefits of e-commerce are significant, they do not come without the risk of
some longer-term social costs.
Many aspects of electronic shopping are automated and fewer staff are needed to
process orders, leading to a possible rise in unemployment in certain economic
sectors.
E-commerce businesses have access to global markets but they are also subject
to global competition. This means that costs and working practices need to
remain flexible to cope with changing consumer demands and competitor activity.
Suppliers can choose to operate from offshore low-cost bases. This has a
particular impact on high wage/high social cost economies which may find that
jobs are exported to lower cost economies.
Flexibility to operate offshore and to buy internationally means that it is very
difficult for national governments to police the legality of operations and to ensure
the quality and safety of some products supplied (eg medicines).
Ensuring the reliability, security and integrity of data and operations can be a
problem – electronic hacking is often one step ahead of the security industry.
