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Benefits of e-Business

Ease of Formation and Lower Investment Requirements: Unlike a huge list of procedural requirements for setting up an industry, e-business is comparatively easy to start. The benefits of internet technology mount up to big or small business alike

Convenience: Gone are the days, where shopping ate our time and energy, now, internet offers the convenience of '24 hours × 7 days a week × 365 days' a year that allows facilities even at midnight. There are no time restrictions for it. This flexibility is available even to the organisational personnel which enables them access and do their work from wherever they are, and whenever they may want to do it.

Some e-Business Applications


e-Procurement: This involves internet-based sales transactions between business organisations as well as both, "reverse auctions" that make possible online trade between a single business purchaser and many sellers, and, digital marketplaces that make possible online trading between multiple buyers and sellers.


e-Bidding/e-Auction: Almost all the shopping sites have 'Quote your price' where you can bid for the goods and services. It also invites e-tendering where one can submit tender quotations online.


e-Communication/e-Promotion: e-mail communication is another means of promoting an organisation's product. It involves publication of online catalogues displaying images/pictures of goods/products, advertisements can also be published through banners, pop-ups, blogs and customer surveys. Video conference serves as a boon to many corporate companies that aids Meetings and conferences in a smooth manner


e-Delivery: e-delivery is the instant electronic delivery of computer software, photographs, videos, books (e-books), journals (e-journals) and other multimedia content to the user's computer at the click of a mouse. It also provides legal, accounting, medical, and other consulting services electronically.


e-Trading: e-Trading can be defined as securities trading, in other words it is online buying and selling of shares and other financial instruments.

Speed: As we have already noted, most of the buying or selling activities involves exchange of information which internet allows at the click of a mouse. This benefit has attracted many in the case of information-intensive products such as softwares, movies, music, e-books and journals which can be delivered online. The time consumed for this process is substantially reduced due to transformation of the business processes being sequential and becoming parallel or simultaneous. As we are all aware that in the digital era, money is also called as electronic pulses due to the quick electronic funds transfer technology of e-commerce.

Global Reach/Access: Internet has no boundaries. On the contrary, it allows the seller an access to the global market; on the other hand, it helps the buyer giving freedom to choose products from any part of the world. It would definitely not be an exaggeration to say that in the absence of internet, globalisation would have been to a large extent restricted in scope and speed.







Physical prescence


Not required

Location requirements

Near the source of raw materials or suppliers


Cost of setting



Operating cost



Nature of contact with suppliers and customers



Nature of internal communication



Response time for meeting customers



Shape of organizational structure



Business process and length of the cycle

Sequential procedure

Simultaneous, different process

Opportunity for inter personal touch



Level of going global



Government support



Nature of human capital

Semi-skilled or even unskilled manpower required

Technically and professionally qualified personnel required

Transaction risk




Movement Towards a Paperless Society: Usage of internet has to a great extent reduced paperwork and time consumption. Many corporate companies does bulk of its sourcing of supplies of materials and components with no paper work. Even the government departments and regulatory authorities have increasingly adoption this mode where they allow electronic filing of returns and reports. In fact, e-commerce tools are implementing the administrative reforms designed at speeding up the process of granting permissions, approvals and licences. In this regard, the provisions of Information Technology Act 2000 are quite remarkable.

Limitations of e-Business: Conducting business in the electronic mode does suffer from certain limitations. It is advisable to be aware of the also.
  • Low Personal Touch: Though very High-tech it lacks warmth of interpersonal interactions. To this effect, it is comparatively less suitable mode of business with respect to product categories that requires high personal touch.
  • Incongruence between Order Taking/Giving and Order Fulfillment Speed: There is an outflow of information at the click of a mouse, but the actual physical delivery of the product takes a lot of time. This incongruence may cost the patience of the customers. It also happens due to technical reasons where web sites take unusually long time to open. This may further create displeasure and frustration in the user.
  • Need for Technology Capability and Competence of Parties to e-Business: Other than the traditional 3R's (Reading, Writing, and Arithmetic), e-business needs a fairly high degree of familiarity of the parties with the world of computers. And, this "need" is responsible for what is known as digital divide, which is the division of society on the basis of familiarity and non-familiarity with digital technology.
  • Increased Risk Due to Anonymity and Non-traceability of Parties: Internet transactions happen between cyber personalities. It is becoming hard to establish the identity of the parties. Furthermore, one does not know the location from where the parties may be operating. It is therefore riskier to interact through internet. e-business is also riskier due to additional hazards of impersonation sometimes, leaving somebody else to transact in your name and leakage of confidential information such as banking details and so on. Further, there are also problems of 'virus,' and 'hacking,' that could condemn your computer.
  • Ethical Fallouts: These days companies use an "electronic eye" to keep track of your email account, the websites visited by you, the files being accessed etc. These are some of the ethical fall outs that we can face in our routine.
  • Despite Limitations, e-Commerce is the Way: It may be understood that most of the limitations of e-business mentioned above are in the process of being overcome. These days websites are more and more interactive to overcome the problem of 'low touch.' Communication technology has steadily evolved to increase the speed and quality of communication through internet. Efforts are being taken to overcome the digital divide, for instance, by resorting to strategies as setting up of community telecentres in villages and rural areas in India with the aid of government agencies, NGOs and international institutions. India has undertaken about 150 probjects in order to diffuse e-commerce in all nooks and corners. In concurrence with the above discussion, it is clear that e-business is here to stay and is poised to restructure the businesses, governance and the economies. Hence, it is appropriate that we get familiarised with the process of e-business.

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