E-Business became so popular, especially during the pandemic, that many offline stores and businesses switched to online. In this article, we will walk you through the main concepts of e-Business and explain how it works.
The term "e-Business" refers to the integration within the company of tools based on information and communication technologies (generally referred to as business software) to improve their functioning to create value for the business, its clients, and its partners.
E-Business no longer only applies to virtual companies (called click and mortar) all of whose activities are based on the web, but also to traditional companies (called brick and mortar).
The term e-Commerce (also called Electronic commerce), which is frequently confused with the broader term e-Business, actually only covers one aspect of e-Business, i.e. the use of electronic support for the commercial relationship between a company and individuals. You can read more about e-Commerce here.
The purpose of this article is to present the different underlying "technologies" (in reality, organizational modes based on information and communication technologies) and their associated acronyms.
How to create value?
The goal of any e-Business project is to create value. Value can be created in different ways.
Increase of margins
One way is due to an increase in margins, i.e., a reduction in production costs or an increase in profits. E-Business makes it possible to achieve this in several different ways, including:
- positioning on new markets,
- increasing the quality of products or services,
- prospecting new clients,
- increasing customer loyalty;
- increasing the efficiency of internal functioning.
Increased staff motivation
Another way is as a result of increased staff motivation. The transition from a traditional activity to an e-Business activity ideally makes it possible to motivate associates to the extent that:
- the overall strategy is more visible to the employees and favors a common culture,
- the mode of functioning implies that the players assume responsibilities,
- teamwork favors the improvement of skills.
Another way is as a result of customer satisfaction. E-Business favors:
- a drop in prices in connection with an increase in productivity,
- improved capacity to listen to the client,
- products and services that are suitable for the client’s needs,
- a mode of functioning that is transparent for the user.
Privileged relationships with the partners
An additional way is as a result of privileged relationships with the partners. The creation of communication channels with the suppliers permits:
- increased familiarity with each other,
- increased responsiveness,
- improved anticipation capacities,
- the sharing of resources that is beneficial for both parties.
An e-Business project can, therefore, only work if it adds value to the company but also to its staff, its clients, and partners.
What does "Time to Market" mean?
Time To Market is the time necessary to bring a product on the market from the moment the idea was put forward. New technologies provide an incredible source of inspiration to formalize ideas while making time to market even more critical because of the rapid flow of information and speedy competition.
What about the reduction of costs and ROI?
The use of new technologies for the functioning of a company makes it possible to reduce the costs on the different levels of its organization in time.
Nonetheless, implementation of such a project is generally very costly and necessarily leads to organizational changes, which may cause upheaval in the practices of its employees. It is, therefore, essential to determine the project's return on investment (ROI), i.e. the difference between the expected profits and the required overall investment, considering the cost of human resources mobilized.
How to characterize e-Business?
A company can be viewed as an entity providing products or services to clients with the support of products or services of partners in a constantly changing environment. The functioning of a company can be roughly modeled in accordance with a set of interacting functions, which are commonly classified into three categories: performance functions, management functions, and support functions.
- Performance functions represent the core of its activity (core business), i.e., the production of goods or services. They pertain to production, stock management, and purchasing (purchasing function).
- Management functions cover all strategic functions of the management of the company. They cover the general management of the company, the human resources (HR) management functions, as well as the financial and account management functions.
- Support functions support the performance functions to ensure that the company runs smoothly. Support functions group all activities related to sales (in certain cases, they are part of the core business) as well as all activities that are transversal to the organization, such as management of technological infrastructures (IT, or Information Technology):
Companies are generally characterized by the type of commercial relationships they maintain. Dedicated terms, therefore, exist to qualify this type of relationship.
One type is B-to-B (Business to Business, sometimes written B2B), which means a commercial relationship between businesses based on numerical support for exchanging information.
Another type is B-to-C (Business to Consumer, sometimes written B2C), a relationship between a company and the public (individuals). This is called electronic commerce, whose definition is not limited to sales but covers all possible exchanges between a company and its clients, from the request for an estimate to after-sales service.
Another type is B-to-A (Business to Administration, sometimes written B2A), which means a relationship between a company and the public sector (e.g. tax administration, etc.) based on numerical exchange mechanisms (tele procedures, electronic forms, etc.).
As an extension of these concepts, the term B to E (Business to Employees, sometimes written B2E) has also emerged to refer to the relationship between a company and its employees, in particular through the provision of forms directed at them for managing their careers, vacations, or their relationship with the company committee.
What are Front Office and Back Office?
The terms Front Office and Back Office are generally used to describe the parts of the company (or of its information system) that are dedicated, respectively, to the direct relationship with the client and proper management of the company.
The Front-Office (sometimes called Front line) refers to the front part of the company that is visible to the clients.
Back Office refers to all parts of the information system to which the final user does not have access. The term, therefore, covers all internal processes within the enterprise (i.e. production, logistics, warehousing, sales, accounting, human resources management, etc.):
What are the concepts of e-business?
Implementing an e-Business project necessarily involves deploying a business network through which business-specific services are accessible in client-server mode, generally via a web interface that can be queried using a simple navigator.
Nonetheless, the implementation of computer tools is not sufficient. It is believed that a company only implements an e-Business project as soon as it implements a new organization based on new technologies.
The concept of e-Business is, nonetheless, very flexible and covers all possible uses of information and communication technologies (ICT) for any and all of the following activities:
- making the relationships between the company and its clients and different partners (suppliers, authorities, etc.) more efficient;
- developing new business opportunities;
- facilitating the internal flow of information;
- controlling the company's different processes (production, warehousing, purchasing, sales, human resources, etc.).
The goal is, therefore, to create privileged communication channels between the company and its environment and link them with its internal processes to better control internal and external costs.