Definition And The History Of Term E-business

E-business (electronic business) is a term, which includes all the forms and methods of digital information and communication technologies to support and optimise business processes - from preparation to implementation.

There is often confusion between this term and the term e-commerce. It is worth noting that e-commerce (electronic commerce) refers only to the online trading of goods and services. Thus, it is important to understand that e-commerce is a subsection of e-business.

Concept Of E-business

To understand the concept of business, it is necessary to grasp the link between business and the net economy and know the typical market participants of e-business.

Net Economy And E-business

Net economy determines the range of online e-business, also known as electronic business. Internet-connected commerce relies on the growth of online internet access.

The digitalisation process, starting from the 90s, led to major structural changes in the economy, shifting the focus to the information technologies sector. The extended use of information technologies created the base for the so-called information economy. And today, within the information economy, an important role is given to knowledge superiority. The information economy exists in parallel with the traditional economy known as the net economy.

Market Participants

Market participants in e-business are classified into the following categories: Business (B), Consumer/citizen (C) and Administration (A). All the mentioned participants can act as a buyer or a service provider within the market. It is not hard to calculate that there are nine possible combinations for e-business relationships.

The Role Of E-business

The generation of electronic added value (electronic value creation) is the most crucial role of business. It has different forms, and a company can decide which type of value to pursue. Below the conditions of electronic added value are described:

  1. Value structuring, which is achieved due to the possibility to overview a large quantity of information.
  2. Value selection, which is achieved due to the availability of specific database information upon request.
  3. Value matching means that there is a possibility to merge inquiries between suppliers and consumers more effectively.
  4. Transaction value, meaning that online offers support a business to become more efficient
  5. Coordination value is achieved when an online offer allows different providers to combine their services more conveniently.
  6. Communication value, which means that an online offer improves communication between different participants of e-business.

To create electronic value, companies should follow the four steps mentioned below:

  • Collect large quantities of information: this is necessary to identify product related data.
  • Transform the information into a product.
  • Delivery of the final information product to consumers. Information product may involve a website, e-books, comparison platforms, etc.
  • Repeat the process as new information become available and keep the data up to date.

To gain all the benefits of e-business, companies should set long-term goals for e-business. They have to pay attention to questions related to processes automation, new business models creation, etc.

Core Components And Main Areas Important For E-business

The main parts of e-business are information, communication, and transaction.

The main areas, which are crucial for e-business, are the following:

  • Online stores which implement electronic sales.
  • Online marketplaces, which act via digital networks and aim to connect buyers and suppliers.
  • E-procurement, which is the electronic sourcing of goods and services by companies. It is concentrated on cost reduction.
  • Online companies: cooperation aiming to connect individual company services.
  • Online communities: these are electronic communication networks between individuals and organisations mainly promoting data and knowledge sharing.

Examples Of E-business Activities

There is not a complete list of examples of e-business activities. Exciting examples of e-business may be the following:

  • Operating an online marketplace for different goods and services.
  • Integration of different electronic supplier catalogues into one enterprise resource planning (ERP) system.
  • Designing and maintaining an online store, which includes products or services accessible from anywhere 24/7, multiple payment options, customer support (live chat, hotlines and so on).
  • Online marketing aiming to provide personalised advertising to customers. It can be achieved by using big data from cookies, purchase behaviour, customer data gathered from social networks and other sources.

E-business continues to develop steadily due to the digitalisation of our lives. The development of new and innovative technologies such as the Internet of Things (IoT) also promotes other activities connected to e-business.

Scroll down to read our indepth Ecommerce Platforms guide. What you should know, Ecommerce Platforms features, price plans and support. Pros and Cons of Ecommerce Platforms as a ecommerce, everything is explained below.

Overview of Ebusiness

Shopify is a software company that specialises in ecommerce software for small to enterprise level businesses.

Shopify is listed as the best ecommerce software related to Ecommerce Platforms. Shopify was founded in 2006 in Ottawa, Canada and currently has over 6,124 employees registered on Linkedin.

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