Issue Seven - Conversations on Technology, Business and Society

RESEARCH
52
Doing Business
On the internet
The article presents an overview of e-commerce and seeks to explain how
firms integrate the Internet into their business to develop different e-commerce
capabilities. The learning outcome is to understand the different e-commerce
capabilities and the potential benefits of doing business online. The article is an
extract from an upcoming book to be published by The PearlRichards Foundation
and PC Tech International.
Is your business online? Do you have an
email address? Do you read news on the
Internet? Do you have a Facebook account?
Do you watch videos on Youtube? If you do
any of these, you are interacting with online
businesses. There is growing
increase in number of Internet
users globally (see Figure 1).
Each and every day,
consumers are finding ways
to connect with each other
or to access information.
These connections are
being made available via
electronic communication
media. By large, firms with a
basic telephone connection
and computer in today’s
information company have or
are seeking ways to extend
their business online or
conduct some part of their
business through an electronic communication
medium. Any firm involved in such an activity
may be considered as doing business online
E-commerce has often been discussed as
either being broadly equivalent to or a subset
of electronic business or e-business.
These conceptual inconsistencies are a result
of the limited understanding of the rapidly
evolving e-phenomenon. Li (2007: 9) explains
that, “E-commerce is commonly defined as
electronic transactions conducted by business
partners, which can be both organisations
and individuals. In contrast, e-business is
much broader, referring not only to buying
and selling, but also to servicing customers,
collaborating with business partners, and
conducting electronic transactions within
an organisation”. Thus, e-business tends
to embrace e-commerce as one of the
applications of ICTs to share business
information, maintain business relationships
and conduct business transactions.
or engaged in electronic commerce activities.
Electronic commerce (hereafter e-commerce)
conceptualizes the use of information
and communication technologies (ICTs),
particularly telecommunication networks,
to share business information, to maintain
business relationships and to conduct business
transactions involving both businesses and
individuals (Zwass 1996).
As the nature of market operations and
resource strengths differ, it is likely that
firms would take different paths in
adopting and integrating internet
in their business operations. Firms
may be differentiated by the type
of technology involved, the extent
of integration and the nature of
transactions and participants involved.
Concerning the nature of transactions,
two key categories can be identified:
• Marketplace trade with
business trading partners (Business to
Business (B2B)), and
• Direct trade with business
customers (B2B), consumers (Business
to Consumers (B2C)) and government
(Business to Government (B2G)).
Marketplace-based trade takes
place at public or private Internetbased
environments such as Internetbased
exchange websites and online
auctions, which may serve a specific
industry or wide-ranging industries.
On the other hand, direct trade occurs either
through public Internet-based platforms
like an organisation’s website which has
PC TECH | SEPTEMBER - OCTOBER 2010 | pctechmagazine.com
BY RICHARD BOATENG
an online marketing and/or purchasing
function or proprietary computer networks
such as an electronic data interchange
network. Depending on the firm’s Internet or
e-commerce strategy, the firm may seek to
get involved in both
direct and marketplace
trade and use them
to inform, facilitate
transactions and
maintain relationships
with customers,
suppliers and other
trading partners.
Research denotes six
hierarchical phases of
Internet integration into
firms: no e-commerce,
connected e-commerce,
static e-commerce,
interactive e-commerce,
transactive
e-commerce, and integrated e-commerce
(Molla & Licker, 2005, pp. 881). The
phases enable the firms with the following
e-commerce capabilities:
With connected e-commerce, the intended
e-commerce capability is communication
– using email alongside traditional ICT
technologies, like fax and telephone, to
support information and transactional
processes. However, the reach of connected
e-commerce is limited to the existing and
potential trading partners, suppliers and
customers who know the firm’s email address
and others the firm decides to contact.
Static e-commerce builds on connected
e-commerce and extends the communication
capability to an informational capability;
where firms can inform potential and existing
trading partners, customers and suppliers of
their products and services through an online
presence on its website. Creating an online
presence gives the firm the opportunity of
increasing their market ‘reach’ and access
to potential trading partners, suppliers and
customers.
Interactive e-commerce creates an
interactional capability which adds the
capability of online interactions between