E-commerce is typified by electronic exchanges between individuals and groups. Although e-commerce transactions can fall into many different categories, business-to-business and business-to-consumer are the most common. Both business-to-business and business-to-consumer applications and technologies can enhance the productivity of an organization. Examples of this success abound.
Business-to-business (B2B) systems allow organizations to move critical business functions to the Internet in an effort to better coordinate inter-organizational activities. B2B applications utilize networks that developed from the Enterprise Resource Planning (ERP) systems of the 1990s. These systems organized the resources necessary for a company to provide a service or manufacture a product. These systems required a high amount of customization and often had interoperability problems with the systems of other companies or vendors. Modern B2B systems circumvent these issues by utilizing standardized methods of interaction such eXtensible Markup Language (XML). These standards have significantly lowered the cost of entry for businesses so that even small companies can take advantage of B2B systems rather than rely on expensive ERP solutions (Erickson & Rothberg, 2002).
Business-to-consumer (B2C) systems focus on interactions with customers. Although these systems are primarily focused on sales, any consumer interaction with the business is considered a B2C transaction (Rayport & Jaworksi, 2004). Before implementing a B2C system, the company must understand their own objectives and what technology is necessary to achieve those objectives. Simply implementing a website is no guarantee of online success. Instead, the organization must define it’s marketing strategies in terms of positioning and differentiation, and then develop the website to take advantage of these strategies. The traditional path for developing these B2C websites has been to assign the project to an internal IT group. Unfortunately, many IT groups do not have the experience necessary to develop B2C sites on their own. Therefore, it is more cost effective to work with experienced vendors who have already overcome the learning curve necessary to implement a B2C site quickly and efficiently (Poon & Lau, 2006).
Examples of successful e-commerce ventures are abundant. Voice and data communications service provider Vanion Inc. has successfully leveraged B2B billing software to provide customizable billing solutions for their business customers. The analytical abilities of the B2B billing software allows Vanion customers to drill down into their bill and look at the phone usage of individual employees. This new software has had a tremendous impact on Vanion’s sales team which has leveraged the custom billing solution in their sales pitches (McCright & Ferguson, 2001). This experience is similar to the experience of Trade Settlement, whose B2B financial solution has enjoyed millions of dollars in return on investment. This software coordinates trillions of dollars of loan transactions for Trade Settlement’s customers (Burke, 2002). Examples like these are proof that the e-commerce concept works.
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McCright, J., & Ferguson, R. (2001). Footing the Bill with Ease. eWeek, 18(21), 34. Retrieved October 10, 2008, from Computer Source database.
Poon, P., & Lau, A. (2006). The PRESENT B2C Implementation Framework. Communications of the ACM, 49(2), 96-103. Retrieved October 9, 2008, from Business Source Elite database.
Rayport, J. F., & Jaworski, B. J. (2004). Introduction to e-commerce (2nd ed.). New York: McGraw-Hill/Irwin.