Electronic commerce (EC) is possibly the most promising application of information technology witnessed in recent years. It is revolutionizing supply-chain management and has enormous potential for manufacturing, retail and service operations. The tremendous importance of EC has prompted us to write this paper. We have attempted to define e-commerce and examine major EC elements that link organizational systems. The application of EC in manufacturing, retailing and service operations is examined, and a framework for describing EC components and their role in different areas of an organization is proposed. Finally, we summarize our findings and conclusions.
We have examined the evolving role of e-commerce on the operations of manufacturers, retailers, and service providers. A framework for describing EC components and their role in operations is set forth. For companies that fully exploit its potential, EC offers the possibility of breakthrough changes: changes that so radically alter customer expectations that they redefine the market or create entirely new markets. To reap the benefits of EC, firms must understand its potential, its components, their own businesses, and the businesses of trading partners. Businesses must focus on strong partnerships and the core products and structure that make EC possible. They must define, develop, and use the EC infrastructure that will empower their business to take advantage of new business opportunities. Development of effective strategies for achieving competitive advantage through EC will be necessary for success in the 21st century.
EC requires substantial infrastructure planning. Pursuing EC goals with underpowered hardware equipped with inadequate bandwidth, ill-considered software, and no coherent data management strategy is a recipe for disaster. Infrastructure planning is critical to success. A badly designed system performs poorly at best and at worst invites security problems. The infrastructure must be designed with sufficient flexibility to allow for adaptive change, as will be surely mandated with the continued evolution of EC. Good infrastructure planning can make the difference in whether future EC developments create problems or opportunities for a business.
Historically, many infrastructure services have been provided by subscription with direct monthly aggregated billing. EC enables other business models such as immediate payment for services. Rather than each provider providing separate user billing, a common shared billing infrastructure, similar to the credit card associations, could be developed. This may be more flexible and cost-effective and it may reduce credit risks to providers.
A necessary ingredient of EC, user authentication to prevent fraud, has a major disadvantage for users with the loss of privacy. Authentication allows providers to log user activities and data warehousing across a variety of suppliers and providers. Without definitive privacy policy, the development of a dynamic market may be stifled. A customer care organization can preserve user anonymity and enforce privacy policy.
The world around us is rapidly changing. The above-mentioned issues must be addressed, as must others that exists, or will arise. The Internet and other EC related developments have the potential to radically change the ways in which we communicate, interact, receive information and entertainment, and acquire goods and services. For businesses to survive and prosper in the 21st century and beyond, they must develop business models that give EC the prominence it deserves as a key ingredient in business success.
