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The Impact of Electronic Business on the Organisation

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The Impact of Electronic Business on the Organisation The Impact of Electronic Business on the Organisation Ronel Smith Information and Communication Technology - icomtek CSIR South Africa [email protected] Abstract Hecker [10] defines e-business as any process that a business organisation conducts over a computer-mediated E-business is fast becoming an important initiative for network. It includes buying and selling, as well as a wide companies to consider, one that impacts every aspect of range of customer-, production- and management focused how a business is run. This report investigates the impact processes carried out by for-profit, government or non- of e-business implementation on various aspects of the profit entities. E-business is based upon the processing organisation including; strategy, human resources, and transmission of digitised information, including text customer relationship management, the IT department, and visual images from one computer or some other technology, the business environment, trust, service electronic device to another. E-commerce is that part of management and performance metrics. Implementing e- e-business which involves buying and selling goods and business applications will require process redesign, services. According to Agarwal, e-business is any net- organisational restructuring and alignment, new job enabled business activity that transforms internal and descriptions and reviewed and revised policies. external relationships to create value and exploit market Organisations will also have to examine tax, legal and opportunities driven by new rules of the connected security issues. E-business is changing all the rules and economy. Furthermore, e-business involves the models. An organisation’s ability to embrace new continuous optimisation of an organisation’s value technology and business models is key to increasing the proposition and value-chain position through the adoption organisation’s productivity. The Internet economy of digital technology. necessitates a fundamental transformation of traditional organisations. The true benefit of e-business is achieved Implementing e-business applications will require through the digitisation of the entire value chain. For a process redesign, organisational restructuring and successful e-business implementation it is important that alignment, new job descriptions and reviewed and revised decision-makers understand the nature of these changes, policies. Implementing e-business applications will also their potential impact, plan for them and manage the require organisations to examine tax, legal and security entire process in such a way as to ensure buy-in of all the issues [13]. E-business is changing all the rules and relevant stakeholders. The decision to implement an e- models. An organisation’s ability to embrace new business initiative should not be undertaken lightly and technology and business models is key to increasing the the benefits that can be gained from such a venture must organisation’s productivity. be investigated thoroughly before deciding to go ahead. E-business impacts the value-chain processes in the 1. Introduction exchange of goods, money, services and information. Basic market elements – who, what, when, where, how Timmel [24, p.22] quotes W. Krenz, Vice President of and why – are being radically altered by e-business. As A.T. Kearny as saying “In 1999, the best chemical companies incorporate e-business into their processes, a company had the best chemists. In 2005, the best number of unique secondary effects are taking place. chemical company will have the best e-professionals.” These effects include customers becoming more This is true not only for companies in the chemical empowered, product development processes becoming industry, but for all companies in all industries. E- more collaborative and marketing techniques becoming Business is fast becoming an important initiative for more targeted [12]. companies to consider, one that impacts every aspect of how a business is run. This report investigates the impact E-Business is focused on improving business of e-business implementation on various aspects of an performance through connectivity by deploying new organisation. The way in which companies and end-users technologies in the value chain to achieve transparency / conduct business will change, ultimately driven by the visibility and also by connecting the value chains emergence of new business models brought on by the between and across external businesses and between evolution of the Internet. business partners in order to obtain competitive advantage, generate top line growth, reduce overall costs business strategy is an understanding of the company' s and open new channels. This definition of e-business business goals ± not its e-business goals. E-business is a extends well beyond the buy-sell relationship to include a way to facilitate improvements in a company' s processes, transformation of the way to do business. If properly in addition to allowing a company to expand market implemented, e-business can help an organisation to penetration, geographical markets, etc. Therefore, the improve relationships with customers, increase revenues processes that will be integrated into the e-business and cut costs. infrastructure must be both known and ready for integration. To implement e-business without E-business influence on an organisation can impact understanding the company' s business goals or processes business efficiency and should be felt across the is likely to lead to e-business failure [15]. Much like organisation ± from the time the sales force initiates a long-range business planning, e-business plans must be transaction, through the manufacturing and service re-evaluated and adjusted on a regular basis. An e- cycles, right up until the time when the customers pay business strategy is not a one-time event. It is an iterative their bills. The impact of e-business on a company' s process. In today' s e-economy traditional planning effectiveness is found in its overall financial well-being. horizons tend to be too long for the very fluid state of e- E-business is not just about buying over the Internet; it is business. Continuous planning with feedback has about increasing the value of the organisation by evolved as the strategy of choice for the fluid and volatile improving the way it operates. e-environment [23]. According to GMT [9] and Dalton [6] using ICT In a survey conducted jointly by Information Week technology businesses can achieve significant and Business Week, IT and business executives from all improvements and cost reductions in several key industries agree that generating new sources of revenue functions in various departments, including isn' t the main goal of deploying e-business initiatives. In fact that ranked well behind creating or maintaining a • Human resource services such as benefits, competitive edge, improving customer satisfaction and retirement planning and job postings. keeping pace with the competition [6]. • Internal communication. The ability to react and change direction is critical. • An executive information system. Speed is everything. Grounding the organisation with sound, winning strategies is key [1]. E-business enabled • Purchasing. organisations must be ready and able to adjust their business and IT strategies rapidly, depending on • Sales force automation and management. unpredictable competitors and market pressures. Today' s • Product development teams. e-business climate requires the continuous optimisation of an organisation' s business and IT strategies. Because • Knowledge management. IT now has such a significant impact on every business • Improving relationships with partners. process ± from order taking to inventory to billing ± both business and IT strategies are now developed in parallel. • Improving time to market. • Reducing operational costs. The lack of a well-though-out e-business strategy has led to some disastrous missteps [18]. In the past, • Increasing employee communication and businesses had the luxury of developing business satisfaction. strategies in the boardroom and information technology (IT) strategies in the IT department. They then brought • Maintaining a competitive edge. these strategies together to run the overall business. A • Improving customer satisfaction. company implementing an e-business strategy cannot afford this luxury. Technology is no longer an The Internet economy necessitates a fundamental afterthought in formulating business strategy, but the transformation of traditional organisations. The true actual cause and driver [23]. benefits of e-business are achieved through the digitisation of the entire value chain [2]. Some of the According to Agarwal strategy and execution are key most common benefits of e-business include streamlined to developing and sustaining a successful e-business sales processes, enhanced customer relationships, reduced initiative. Only those organisations that successfully operating expenses and dramatic improvements in integrate key business strategy and processes productivity and operating efficiency [26]. dramatically increase their efficiencies. To be successful, organisations must also form the right strategic 2. Strategy relationships and develop efficient business processes The implementation of an e-business has a significant with robust back-end solutions that are able to meet impact on a company' s existing strategy as well as users' demands for real-time service today and into the strategy formulation. The basis for an effective
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