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Electronic Commerce Before explaining the impact of technology on organizations and traditional commerce, I will define the terms

Technology, Business Organizations, Electronic commerce and traditional commerce.

What is Electronic Commerce?


E-commerce (electronic commerce or EC) is the buying and selling of goods and services on the Internet, especially the World Wide Web. In practice, this term and a newer term, ebusiness, are often used interchangeably. A type of business model, or segment of a larger business model, that enables a firm or individual to conduct business over an electronic network, typically the internet. Electronic commerce operates in all four of the major market segments: business to business, business to consumer, consumer to consumer and consumer to business.

What is Traditional Commerce?


Traditional Commerce is the process of buying, selling or exchanging products, services or information is physical probably with the existence of a physical store.

What are the Business Organizations?


Business organization is an entity formed for the purpose of carrying on commercial enterprise. Such an organization is predicated on systems of law governing contract and exchange, property rights, and incorporation. The term "business organization" refers to how a business is structured. The business organization is defined in the bylaws when the business is formed with the name and contact information of those who own and run the company with their roles defined. The bylaws state the purpose of the organization and what it does. A sole proprietorship does not have bylaws because one person owns and controls the business.

What is meant by Technology?


Technology is the usage and knowledge of tools, techniques, crafts, systems or methods of organization. The word technology comes from the Greek technologa, an 'art', 'skill' or 'craft' and -loga, the study of something, or the branch of knowledge of a discipline. The term can either be applied generally or to specific areas: examples include construction technology,

Electronic Commerce medical technology, or state-of-the-art technology or high technology. Technologies can also be exemplified in a material product, for example an object can be termed state of the art.

The impact of technology on organizations


The Technology affects the Organizations in the following ways:

1. Impacts on Organizational Strategy


EC has created new opportunities for innovation in products and services. Services which used to be delivered in person can now be delivered over networks through internet. Among the key levers are:

Reusability: using information captured for one purpose (e.g. Transactions), and using for others Simultaneity: making information instantly available in several systems (e.g. via ole) Resequencing: including parallel processing of data-bases Time extension: offering 24 hour a day; 365 days a year service Portability: taking service and products closer to the user

2. Management Processes
Electronic commerce is rapidly entering the era where EC supports unstructured management processes as well as highly reutilized business processes. EC has provided more effective ways of accessing information from multiple sources, including use of external information on databases and the Internet. However, group decision support systems that operate in a meeting room environment can help enhance decision making, but EC does need someone who is an expert facilitator to help the group master the technique of structured discussion.

3. Organization Culture
Newer types of EC such as electronic mail and groupware are creating significant changes in the way that information flows around group ware, and between them and their customers and suppliers. EC can hasten the development of more open and innovative cultures. However, as experts like Davenport warns, and surveys from companies like Reuters confirm, the notion that "information is power" still reigns large in many or group warless, our experience shows that many new systems fail to become accepted by their users, because the systems developers have not been culturally sensitive to the department or group ware, in which the new systems are to be used.

Electronic Commerce

4. Organization Structures
For many years EC has been argued that EC will enable larger span of control and the destruction of group ware. This has at last happened, but due as much to initiatives like BPR (business process reengineering) and the drive to cut costs. Research on whether EC encourages centralization decentralizations produced ambivalent results. Many companies have centralized room operations (for efficiency) while at the same time decentralizing her activities.

5. The Catalytic Role:


Electronic commerce has a catalytic effect. E-commerce will serve to accelerate and diffuse more widely changes that are already under way in the economy, such as the reform of regulations, the establishment of electronic links between businesses (EDI), the globalization of economic activity, and the demand for higher-skilled workers.

6. The impact on interactivity:


E-commerce over the Internet vastly increases interactivity in the economy. These linkages now extend down to small businesses and households and reach out to the world at large. Access will shift away from relatively expensive personal computers to cheap and easy-touse TVs and telephones to devices yet to be invented. People will increasingly have the ability to communicate and transact business anywhere, anytime. This will have a profound impact, not the least of which will be the erosion of economic and geographic boundaries.

7. Openness:
Openness is an underlying technical and philosophical tenet of the expansion of electronic commerce. The widespread adoption of the Internet as a platform for business is due to its non-proprietary standards and open nature as well as to the huge industry that has evolved to support it. The economic power will help to ensure that new standards remain open.

The impact of technology on Traditional Commerce


As in the start, I have defined that traditional commerce the process of buying, selling or exchanging products, services or information is physical probably with the existence of a physical store. The technology affects the traditional commerce in the following ways:

1. Work
EC is dramatically changing the nature of professional work. There are few offices where professional do not make use of personal computers, and in many jobs involving extensive

Electronic Commerce information and knowledge based work, the use of the computer is often a core actively. Becoming effective not only requires traditional skills of organizing, thinking, wrecking etc., but knowing how best to use the power of EC for researching sources, accessing information, connecting to experts, communicating ideas and results, and packaging the knowledge (asset) for reuse. One aspect of this is the need for hybrid managers - people who are competent at both their discipline and EC.

2. The Workplace
The way in which EC diminishes the effect of distance means that EC creates a variety of options for reorganizing the workplace. At a basic level, EC can provide more flexibility in the office, allowing desk sharing and a degree of location independence we Chin a building (this will develop as CTI (Computer Telephony Integration) and wireless PCs become more firmly established. At another level EC premeds the dispersion of work teams, thus saving costs of relocation and travel. EC has also created the mobile professional and also allows people to work effectively from home.

The impact of Electronic Commerce on Businesses Production costs:


Assessing the collective impact of these technological developments and their associated price declines on production costs, productivity, and prices is very difficult. Indeed, the impact of computers alone on productivity has been extraordinarily difficult to ascertain and has led to a sub-field of economics that tries to explain the "productivity paradox": why the widespread introduction of computers has not resulted in increases in the official productivity statistics. As work on this question progresses, it is becoming clear that the paradox is unlikely to have a single solution, and the issue of whether or not computers significantly increase productivity has not been resolved.

Changing firms cost structure:


The impact of electronic commerce on firms internal production and transaction costs falls into three broad categories: the cost of executing the sale, costs associated with the procurement of production inputs, and costs associated with making and delivering the product. This list probably represents only a subset of the cost impacts associated with electronic commerce as firms implement the technology, since by and large they only

Electronic Commerce represent savings over existing processes and thus do not factor in quality improvements. Similarly, beyond mere substitution, it is likely that electronic commerce techniques may foster completely new ways of conducting business. While these are hard to envision, they may lead to more significant cost savings. For example, When electricity first replaced water power, it typically used the same site near the water and the machines were vertically aligned to take advantage of the belts connected to the water wheel. While this represented an improvement over water power, large productivity gains were only obtained when new, horizontal buildings were constructed to fit the technology, allowing for the formation of assembly lines.

Order placement/execution:
By placing the necessary information on line in an accessible format, electronic commerce merchants generally transfer transaction costs (e.g. obtaining product information, selecting the product) to the customer. As a result, even when customers execute the transaction in a traditional way (off-line), for example by buying a PC over the phone or coming to an auto dealers showroom to test drive a car, they come "pre-qualified". They know more precisely what they do and do not want and are more likely to buy. This greatly increases the efficiency of the sales process. Micron Computers reports a productivity gain of a factor of ten: their Web sales people spend on average two minutes on the phone with a customer who has looked at their Web site but 20 minutes with traditional customers.

Customer support/after-sales services:


In what are increasingly knowledge-based economies dominated by sophisticated products, customer service and after-sales services are a major cost for many firms. Traditionally, this meant placing service personnel in the field to visit clients, staffing call centers, publishing extensive documentation, or issuing software. For many firms, these costs are substantial, accounting for more than 10 per cent of operating costs. Through electronic commerce, firms are able to move much of this support on line so that customers can access databases or "smart" manuals directly; this significantly cuts costs while generally improving the quality of service.

Electronic Commerce

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