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E-commerce is a technology-mediated exchange between parties (individuals or organizations) as well as the electronically based intra-or inter-organizational activities that facilitate such exchanges (Rayport and Jaworski, 2002:4).
E-commerce consists primarily of the distributing, buying, selling, marketing, and servicing of products or services over electronic systems such as the Internet and other computer networks. The information technology industry might see it as an electronic business application aimed at commercial transactions. It can involve electronic funds transfer, supply chain management, e-marketing, online marketing, online transaction processing, electronic data interchange, automated inventory management systems, and automated data-collection systems. It typically uses electronic communications technology such as the Internet, extranets, e-mail, Ebooks, databases, and mobile phones. (Wikipedia, 2005).
E-commerce brings the universal access of the Internet to the core business processes of buying and selling goods and services. It helps generate demand for products and services and improves order management, payment, and other support functions. The overall goal is to cut expenses by reducing transaction costs and streamlining all kinds of processes (Awad, 2004:2).
According to Forrester Research (as cited in Kessler, 2003), electronic commerce generated sales worth US $12.2 billion in 2003.
According to Dictionary.com, the definition of E-Commerce is "The conducting of business communication and transactions over networks and through computers. As most restrictively defined, electronic commerce is the buying and selling of goods and services, and the transfer of funds, through digital communications. However EC also includes all inter-company and intra-company functions (such as marketing, finance, manufacturing, selling, and negotiation) that enable commerce and use electronic mail, EDI, file transfer, fax, video conferencing, workflow, or interaction with a remote computer."
Electronic commerce also includes buying and selling over the World-Wide Web and the Internet, electronic funds transfer, smart cards, digital cash (e.g. Mondex), and all other ways of doing business over digital networks.
E-commerce describes the process of buying, selling, transferring, or exchanging products, services and/or information via computer networks, including the Internet (Turban et al. 2004:7). E-commerce can be defined from the following perspectives:
The origin of commerce by exchanging goods occurred before recorded history, now commerce is a basic activity of goods trading and buying in everyday life. Entering into the electronic era, the way individuals and organizations do business and undertake commercial transactions have been changed. This indicates the movement towards electronic commerce. This means there is no paper work and physical interaction is limited, if at all. The emergence of electronic commerce started in the early 1970s with the earliest example electronic funds transfer (EFT), which allows organizations to transfer funds between one another electronically. Then another technology electronic interchange (EDI) was introduced. It helps to extend interbusiness transactions from financial institutions to other types of business and also provides transactions and information exchanges from suppliers to the end customers. However, the early system development was limited to special networks such as large corporations and financial institutions, which are costly and complex to administer for small business. So EDI was not widely accepted as expected. (Chen et al., 2001:2) (Turban, 2004:8)
With the progress of Internet technology and a highly developed global Internet community, a strong foundation of prosperous electronic commerce continues to be built. During the 1990s, the Internet was opened for commercial use; it was also the period that users started to participate in World Wide Web (WWW), and the phenomenon of rapid personal computer (PCs) usage growth. Due to the rapid expansion of the WWW network; e-commerce software; and the peer business competitions, large number of dot-coms and Internet starts-ups appeared. Integrated with the commercialization of the Internet, Web invention, and PC networks these three important factors made electronic commerce possible and successful (Schneider, 2002:8) (Turban, 2004:8).
There are many advantages and disadvantages for customers, business and non-profit organisations to apply electronic commerce. Through the Internet, different levels of product information can be accessed online globally, which makes it easy for customers to compare and evaluate. Business can provide wide range of choices to extend markets and opportunities. With contribution to digital goods and services, customers could save delivery time; business could reduce operating cost and increase profit. The drawback of E-commerce is the different expectations of goods such as clothes sales online when customers are purchasing. Another disadvantage is the privacy and security issues of customers’ credit card detail. (Chan et al., 2001:14) (Schneider, 2002:15)
Please go to E-commerce - Overview - Advantages and E-commerce - Overview - Disadvantages for more information.
The introduction of E-Commerce has impacted on the traditional means of online exchanges. It is creating a new market place and opportunities for the reorganization of economic processes, in a more efficient way. The open structure of the Internet and the low cost of using it, permits the interconnection of new and existing information and communication technologies. It offers businesses and consumers an innovative and powerful information system and another form of communication. This changes the way they search and consume products, with these products increasingly customized, distributed and exchanged differently (Anonymous, 2000:193).
Referring back to E-Commerce overview, E-Commerce consists of distributing, buying, selling, marketing, and servicing of products or services over electronic systems such as the Internet and other computer networks. The information technology industry might see it as an electronic business application aimed at commercial transactions. Moreover, it can involve electronic funds transfer, supply chain management, e-marketing, online marketing, online transaction processing, electronic data interchange, automated inventory management systems, and automated data-collection systems. In order to implement the above mentioned functions (such as electronic funds transfer and automated inventory management systems) required by running E-Commerce and to systemically deal with the data involves in performing E-Commerce, an Enterprise Information System is necessary for managing E-Commerce and provides an overall control structure to organize and manage all the transaction data within the organization or across all other organizations such as suppliers and customers.
According to Wikipedia 2005, Enterprise System is “more or less any kind of computing system that is of “enterprise class�?. This means typically offering high quality of service, dealing with large volumes of data – capable of supporting some large organization (“an enterprise�?). An Enterprise Information System would typically be operated by professional system administrators and be deployed on dedicated servers .It would typically offer network connectivity and provide services that supported the operations carried out by the enterprise.
“Enterprise Systems can be defined as customizable, standard application software, which includes integrated business solutions for the core processes and the main administrative functions of an enterprise.�? (Rosemann 1999).
An enterprise wide system is an off-the-shelf package that provides an integrated suit of applications which provide transaction processing and management information systems for the common core of business processes found in accounting, human resource management, manufacturing and sales and distribution. (Hernandez 1999)
Originally, Enterprise System was known as Enterprise Resource Planning (ERP), which supports broad set of activities by multi-module application software that helps a manufacturer manage the important parts of its business. These include product planning, parts purchasing, maintaining inventories, interacting with suppliers, providing customer service, and tracking orders. ERP is now known as Enterprise System, which extends beyond resource planning, with extensive complex of databases and support multi-online transactions. There are numbers of suppliers that provide Enterprise Systems for business and the examples of major well-known suppliers are SAP, Oracle, PeopleSoft and Baan.
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