A project report on e business

A PROJECT REPORT
ON
“REPORT ON E-BUSINESS’’
PROJECT WORK SUBMITTED IN PARTIAL
FULFILLMENT OF THE REQUIREMENTS
FOR THE AWARD OF THE DEGREE OF
MASTER OF MANAGEMENT STUDIES
IN
(INFORMATION SYSTEM)
SUBMITTED BY
NAME :(VERMA PRAMOD)
UNDER THE GUIDANCE OF (Mr.MAHENDRA NAGLE)
AlamuriRatnamala
Institute of Engineering & Technology
Affiliated to
UNIVERSITY OF MUMBAI
Department of [] Management
Academic Year –2012 – 2014

DEPARTMENT OF MANAGEMENT
CERTIFICATE
This is to certify that the dissertation/project entitled
______________________________ submitted by Mr. /Ms.
___________________ bearing Pin No._______________ on this ___ day of
______ 20__ in partial fulfilment of the requirements for the award of the Degree
of Master of Management Studies of University of Mumbai, is a bonafide work
to the best of my/our knowledge and may be placed
before the Examination Board for their consideration.
_____________________ ____________________
Mr. / Mrs. _______________ Mr. / Mrs. _______________
Internal Examiner External Examiner
______________________ _________________
Mr Nishant
Kaushik_______________ Mr. _______________
Dean-Academics Director

Certificate of Undertaking
I Pramod Verma hereby declare that project entitled
“Report on E-Business “ Undertaken at Alamuri Ratnamala Institute of Engineering
and Technology by Pramod Verma Seat No. _______ in partial fulfillment of Master
of Management Studies (Management) degree (Semester III) Examination, is my
original work and the Project has nor formed the basis for the award of any degree,
associate ship, fellowship or any other similar titles, either in Mumbai University or
any other University of India.
( Pramod Verma)

REPORT ON E-BUSINESS
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ACKNOWLEDGEMENT
I express my sincere thanks to my project guide
of prof. “Mahendra Nagle”.
Coordinator at ARMIET college for M.M.S section who has been guiding
Force to my project “Report on E-Business ”.
I am also thankful to my all professors to their
Support and encouragement in finding out the appropriate data for this Project
report, without their thankless support and efforts, making this support would
have been impossible for me.
I would also thanks the whole respondent who
Provide me the best knowledge and for their help and cooperation Throughout
the project.
Pramod Verma

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EXECUTIVE SUMMARY OF E-BUSINESSES
In looking over the challenges identified above, one certainly could ask, “So
what is really different about e-business?” Overall, the answer that firms have
faced most of the challenges identified in the past, and that this simply
represents the latest iteration of these challenges.
Organizations have faced the challenge of integrating autonomous businesses. A
Considerable literature has grown up around all of the problems in managing
projects.
Any technology-based firm must deal with developing people skills among their
Technical managers, be they engineers, financial analysts, or software
developers.
Managing across generations is certainly not a new issue. And both the job
churn and the ensuing talent shortage are inherent in any technological
revolution. Thus, again, what’s new? We argue that two factors distinguish
managing people in an e-business today from managing in a brick and mortar
business.
The first factor distinguishing e-business from traditional business is the
complexity of the problem.
What seems different about managing e-businesses today stems from the
Interaction of facing all of these challenges simultaneously.
While organizations may have faced each of these challenges before, they have
probably never faced so many challenges at the same time.

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This creates a level of complexity seldom experienced before.
A second, more important set of factors was noted explicitly by the respondents.
In fact, when pressed on these issues, respondents agreed as to the
distinctiveness of two of the challenges: Uncertainty and speed. Virtually every
person we interviewed first noted that the biggest change in moving to e-
business is the speed. Things happen so much more quickly,
Requiring faster organizational response than they had ever faced before.
Second, while fewer noted it specifically, the uncertainty challenge was at least
implicit if not explicit.
They noted the concern with not knowing for sure how to manage in the
present environment that was accentuated by uncertainty regarding what might
happen next. It seems that the combination of uncertainty regarding the way in
which certain factors will change in the future with the People in the E-
Business WP 00-11 increasing speed at which they will change presents the
most formidable management challenge unique to an e-business.
Thus, managing an e-business today requires dealing with an unusual amount of
complexity, uncertainty, and dynamicity. This certainly requires a new
paradigm for organizing in terms of how the structure, processes, and people of
the firm are managed. However, before discussing this new paradigm, we will
first examine the different evolutionary paths taken by different e-business.

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INDEX (TABLE OF CONTENTS)
SR.NO CONTENT PAGE NO

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INTRODUCTION AND RESEARCH METHODOLOGY
INTRODUCTION:
This turn towards Internet based technologies generated a new status quo in the business
world. E-business was defined by IBM back in 1997, as “the transformation of key business
processes through the use of Internet technologies”. According to Chaffey (2002), e-business
is described as “all the electronically mediated information exchanges, both within an
organization and with external stakeholders, supporting the range of business processes.”
E-Business enables an enterprise to spread its wings to the global customer. To extend the
sales platform to a futuristic dimension, business houses have incorporated software that can
run on platforms offered by the World Wide Web. E-business has now penetrated into
consumer goods and other production and service based industries. IPSR solutions' Web
Application Division has proven expertise in creating customised solutions that can manage
web based Business Logistics perfectly. The following chart explains our service platforms.

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SHORT HISTORY OF E-BUSINESS
Despite the fact that e-business is a relatively new trend in the business sector, its brief
history is filled with controversial events. The rapid growth of the popularity of the Web from
1995 was accompanied by a highly profitable period for e-business companies. Setting up a
fully functional e-Business website was very easy and cost efficient and at that time it was
thought to guarantee success and profits (O’Connor and Galvin, 1998; Janenko, 2003). The
number of e-businesses kept growing in an attempt for everybody to have a share from the
profit pie. On the turn of the century, their number reached its peak and their profit
opportunities and potential financial growth was capped. This led to the huge stock market
collapse of many e-business companies which is known as dot.com bust. After a five year
period where companies had to revaluated their strategic approach towards e-commerce,
growth of e-businesses started to increase again, reaching double digit level through the
current period.

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LIMITATIONS OF E-BUSINESS SYSTEM:-
The limitations of e-business can be classified as technological and non-
technological.
TECHNICAL LIMITATIONS OF ELECTRONIC OMMERCE:
 Lack of sufficient system is standards, reliability, security and communication
protocols
 Not enough telecommunication bandwidth
 "The software development tools are still evolving and changing rapidly"
 Integrating the Internet and electronic commerce software with current databases and
applications difficultly
 Additional cost to request special Web servers and other infrastructures, in addition to
the network servers
 Possible problems of interoperability, that means some e-business software or
applications does not fit with some hardware, or is incompatible with some operating
systems or other components

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NON-TECHNICAL LIMITATIONS:
 Lack of feel and touch online
 Many complicated legal issues
 Rapidly changing and evolving e-business
 Lack of support services
 Insufficiently large enough number of sellers and buyers
 Breakdown of human relationships
 Inconvenient and expensive accessibility to the Internet

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OBJECTIVE OF E-BUSINESS:-
 Improve service.
 Save time.
-Time taken by customers.
-Elapsed time for process.
 Reduce process errors.
 Reduce the cost of core service provision.
 Free staff to provide value added services.
 Improve morale
-give people the tools and time they need

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ADVANTAGES:-
The benefits of implementing E-Business tools is not so much in the use of technology, as in
the streamlining of business processes and the ease in finding new markets. Some of the
advantages include:
 quicker and easier communications.
 strengthened marketing capabilities and reach
 increased hours of operation (a website provides 24 hour 7 day information to existing
and potential customers)
 access to broader information through research
 reducing the cost of doing business by lowering transaction costs and increasing
efficient methods for payment, such as using online banking and reducing stationery
and postage costs.
 the opportunities to adopt new business models and develop tailored customer
support.

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SCOPE AND FOCUS OF THE REPORT:-
The scope of E-Business is as wide as an ocean & there by the implementation hurdles.
When one thinks of the Electronic Business even through final goal remains the same as that
of the traditional business, but the way in which they function in order to improve the
performance is different. As information sharing is the major part of the corporate industries,
networking has given boost to E-Business. This change in view-point has opened door for
new opportunities.
Nationalized and Private banks agrees that adopting e-business as a strategy is one of the
important steps the banks has taken in its development due to the tremendous benefits e-
business adoption provides. According to them their perceived benefits include convenience
to customers, speed and quality of service, reduction of queues in banking halls and reduction
in the total overhead cost such as reduction in employee recruitment and reduction in space
for clients and customers .These factors that pushed their drive to adopt e-business.
A) The research provides powerful, real time E-Business reporting to help E-
Business managers improve merchandising and increase sales.
B) The research is very much useful to get the lifetime value of your customers based
upon their acquisition source, and increase your expenditures on sources that
generate the best customers over lifetime.
C) It tracks the performance of all your online marketing initiatives, including Pay -
per- click keyword buys, doing transaction online, paying bills using net banking,
banner ads, e-mails and affiliate programs and also how it is effective to
implement.

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D) It helps the E-Businesses to convert visitors into customers.
E) It helps to determine whether online competitors can significantly
Harm your business by providing some of the value you currently
Offer customers in the traditional way. It helps the managers to improve the
business by enhancing their functionalities as compared with their competitors.

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LITERATURE REVIEW:
INFORMATION IS POWER
This is one of the most widely accepted statements and applies for every aspect of human
activity. Internet is an unlimited pool of information and benefits anyone who uses it
properly.
According to Porter and Millar (1985) information gives competitive advantage to a
company in three different ways:
a) By changing industry structure and changing the rules of competition.
b) By providing companies with new ways to outperform their competitors.
c) By creating new businesses, even from within a company’s existing operations.
The authors continue by discussing the strategic significance that Information Technology
has obtained for companies, by affecting the value chain, thus the technological and
economic activities that a company performs to do business. Not only it transforms the value
chain, but also transforms the product or the service that the company produces. Additionally,
authors suggest five ways for Information Technology to be successfully implemented in
business processes. This can be done by:
a) Assessing the intensity of information.
b) Determining the role that Information Technology will have in the industry structure.
c) Understanding the ways that it can create competitive advantage for their companies.
d) Investigating the possibilities of new businesses.
e) Developing a strategic plan to take advantage of Information Technology.

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SUCCESS AND FAILURE FACTORS OF E-BUSINESS
“E-business and E-service will move to the forefront of technology priorities. To take full
advantage of the E-service, you need to look at your organization from an alternative
perspective. The question is how to deal with these changes, at what cost, and at what speed.
This is not the time to worry about "disintermediation". It is the time for cooperation,
integration, and the consideration of customer loyalty, profitability and competition
advantage.”
As we have seen, e-Business has noticed remarkable growth and success over the last years.
Despite the numerous examples of successful e-Businesses there are many examples where e-
Business failed to succeed. By looking at those characteristic examples, this report tries to
understand the factors that lead to a successful e-Business but also to figure out the dangers
that may lead to failure. These factors would form a helpful guideline, which would help in
making the IT employment website as successful as possible.

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HYPOTHESIS:
E-business offers buyers and sellers a new form of communication and provides an
opportunity to create new marketplaces.
Theoretical studies suggest in general that the development of e-business results in higher
firm performance as a result of lower search and head-to-head comparison costs.
However, there are a number of recent theoretical studies, which demonstrate that the growth
of e-commerce may lead to monopolistic pricing behaviour so that firms engaging in e-
commerce need not perform better compared to more
Traditional enterprises.
To date, there exists little empirical evidence on the impact of information technology on
economic performance. This paper is the first that uses a large representative data set of
Belgian firms to study empirically the impact of e-business on corporate performance.
OUR MAIN CONCLUSIONS CAN BE SUMMARIZED AS FOLLOWS:
(1) The penetration of the Internet in firms is high , however, the use of e-business is still
limited.
(2) It is especially the large firms that engage in ebusiness and mostly in e-procurement.
(3) E-business has no effect on total factor productivity in small firms , however, we find
positive effects on performance of e-business in large firms.

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COLLECTION OF DATA (PRIMARY & SECONDARY DATA)
Data source
Primary
Secondary
Questionnaire
Survey
Observation
Experimental
Internal
External
Internet
Published data
Sales records
Marketing activities
Cost information
feedback
Newspaper
Books
Private studies
Electronicprinted

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E-BUSINESS – TRANSACTION MEDIUM
Most e-commerce is done over the Internet. But EC can also be conducted on private
networks, such as value-added networks (VANs, networks that add communication services to
existing common carriers), on local area networks (LANs) or wide area networks (WANs).

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E-BUSINESS – TRANSACTION TYPES
(E-commerce transactions can be done between various parties.)
• Business-to-business (B2B)
• Collaborative commerce (c-commerce)
• Business-to-consumers (B2C)
• Consumers-to-businesses (C2B)
• Consumer-to-consumer (C2C)
• Intra-business (intra-organizational) commerce
• Government-to-citizens (G2C)
• Mobile commerce (m-commerce)

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HOW IS E-BUSINESS DIFFERENT
 Reduction in physical boundaries and distance.
 Serve larger customer base more efficiently.
 Target specific customer groups.
 The Internet is an interactive marketing medium.
 More detailed information on customer transactions.
 Improved transaction efficiency.

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CONSUMERS TO CONSUMERS (C2C)
Abbreviation for consumer-to-consumer commerce; that
is, commerce with no middle business people The most notable examples are Web-based
auction and classified as sites. Most large venues for such models (for example, eBay and
Classifieds2000) are quickly permeated by consumers who participate so actively and
regularly that they become small businesses for them.
C2C stands for consumer to consumer electronic commerce. The Internet has facilitated new
types of C2C although it is important to note that this kind of commerce -- in the form of
barter, yard sales, flea markets, swap meets, and the like -- has existed since time
immemorial. Notably, most of the highly successful C2C examples using the Internet actually
use some type of corporate intermediary and are thus not strictly "pure play" examples of
C2C.

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WHAT IS BUSINESS TO BUSINESS (B2B)
B2B stands for "business-to-business," as in businesses doing business with other businesses.
The term is most commonly used in connection with e-commerce and advertising, when you
are targeting businesses as opposed to consumers.
On the Internet, B2B (business-to-business), is the exchange of products, services, or
information between businesses. B2B is e-commerce between businesses. B2B
Communication using XML over HTTP B2B - the basics
Business-to-business electronic commerce (B2B) typically takes the form of automated
processes between trading partners and is performed in much higher volumes than business-
to-consumer (B2C) applications.

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WHAT IS BUSINESS TO CONSUMERS (B2C)
Refers to businesses selling products or services to end-user consumers.
B2B stands for transaction activities involving two business entities (business-to-business
transaction). B2C stands for transaction activities involving a business and a consumer
(business-to-consumer transaction).
Electronic commerce comprises commercial transactions, involving both organisations and
individuals. From the technical point of view e-commerce is the processing and transmission
of digitised data. E-commerce decreases the distance between producers and consumers.
Consumers can make their purchase without entering a traditional shop.

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E-BUSINESS CATEGORY
E-banks
E-trade
E-consulting
E-engineer
E-learning
E-mail
E-marketing
E-transactions

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HOW SAFE ARE E-BUSINESS FINANCIAL TRANSACTIONS
New security technology like 128-bit SSL encryption ensures the safety and privacy of both
you and your customers, and is built into the latest e-Business software tools. Your security
and privacy is a top priority with all e-Business providers.

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CAN MY BUSINESS BENEFIT FROM E-BUSINESS:
Reduce administrative and operating costs.
Reduce inventory costs.
Reduce the cost of procurement.
Improve customer service and satisfaction.
Streamline procurement procedures.
Increase communication efficiency and interaction with employees, vendors,
customers and strategic partner.
Increase revenues and profit margins.

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E-COMMERCE, E-BUSINESS, WHO E-CARE
Some analysts and on-line business people have decided that e-business is
infinitely superior as a moniker to e-commerce. That’s misleading and distracts
us from the business goals at hand. The effort to separate the E-commerce
and E-business concepts appears to have been driven by marketing
motives and is dreadfully thin in substance.
AN E-DISTINCTION
For the purpose of clarity, the distinction between e-commerce and e-business in this book is
based on the respective terms commerce and business.
Commerce is defined as embracing the concept of trade, ‘exchange of merchandise on a large
scale between different countries’.11 By association, e-commerce can be seen to include the
electronic medium for this exchange. Thus electronic commerce can be broadly defined as
the exchange of merchandise (whether tangible or intangible) on a large scale between
different countries using an electronic medium – namely the Internet.
The implications of this are that e-commerce incorporates a whole socio-economic,
telecommunications technology and commercial infrastructure at the macro-environmental
level.
All these elements interact together to provide the fundamentals of e-commerce.
Business, on the other hand, is defined as ‘a commercial enterprise as a going concern’.12 E-
business can broadly be defined as the processes or areas involved in the running and
operation of an organization that are electronic or digital in nature.
These include direct business activities such as marketing, sales and human resource
management but also indirect activities such as business process re-engineering and change
management, which impact on the improvement in efficiency and integration of business
processes and activities.

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Figure 1.1 illustrates the major differences in e-commerce and e-business, where e-commerce
has a broader definition referring more to the macro-environment, e-business relates more to
the micro-level of the firm.
WHAT ARE THE KEY DRIVERS:-
It is important to identify the key drivers of e-commerce to allow a comparison
between different countries. It is often claimed that e-commerce is more advanced in the
USA than in Europe.
These key drivers can be measured by a number of criteria that can highlight the stages of
advancement of e-commerce in each of the respective countries. The criteria that can
determine the level of advancement of e-commerce .

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1 TECHNOLOGICAL FACTORS – The degree of advancement of the
telecommunications infrastructure which provides access to the new technology for business
and consumers.
2 POLITICAL FACTORS – including the role of government in creating government
legislation, initiatives and funding to support the use and development of e-commerce and
information technology.
3 SOCIAL FACTORS – incorporating the level and advancement in IT education and
training which will enable both potential buyers and the workforce to understand and use the
new technology.
4 ECONOMIC FACTORS – including the general wealth and commercial health of the
nation and the elements that contribute to it. Since a distinction has been made in this book
between e-commerce and e-business for consistency, the key drivers of e-business are also
identified. These are mainly at the level of the firm and are influenced by the macro-
environment and e-commerce, which include:

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KEY DRIVERS OF E-BUSINESS:-
ORGANISATIONAL CULTURE – attitudes to research and development (R&D); its
willingness to innovate and use technology to achieve objectives.
COMMERCIAL BENEFITS – in terms of cost savings and improved efficiency that
impact on the financial performance of the firm.
SKILLED AND COMMITTED WORKFORCE – that understands, is willing and able
to implement new technologies and processes.
REQUIREMENTS OF CUSTOMERS AND SUPPLIERS – in terms of product and
service demand and supply.
COMPETITION – ensuring the organization stays ahead of or at least keeps up with
competitors and industry leaders.

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DEMAND FOR PEOPLE WITH SKILLS IN E-BUSINESS
INTRODUCTION
This chapter introduces an “e-Business Skills Triangle” framework, reflecting the importance
to e-Business of three main types of skill – business, creative and technical.
It argues that e-Business predominantly needs people with a mix of types of skill, a
proportion of them with a fairly even balance between two or all three types of skill. It goes
on to look in more detail at the skills and work content associated with the main types of
skill.
Based on the analysis, four main e-Business occupations are identified, and the demand for
new people and re skilling of existing members of the workforce is explored for each one.
Key findings are that:
• Business Studies programmed should have a significant Information Technology
content.
• Business Studies programmed should have an e-Business orientation that
permeates all subjects studied.
• There is a need for Business Schools to have a proportion of Information Systems
programmed. with a fairly equal mix of business and information technology
content.
• There is a requirement for the existing population of managers and management
advisors to understand the business implications of e-Business.
• Every business with a web site will need a webmaster.
• E-Business has boosted demand for people with technical IT skills.
• There is a need to update the skills of technical people using dated technology.

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• There is a major increase in demand for designers to work on web design, and for
people with a strong mix of design and technical skills.
• Many of those already working in print design need to acquire web design skills,
• As available bandwidth increases, the requirement for people to produce live action
and animated content will increase.
• Everyone entering employment should have IT skills.
• Third level graduates should ideally have an understanding of the business uses of
Information technology.
• Industry needs to make existing employees IT literate, perhaps at an overall rate of
about 2% of employment per annum.

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THE E-BUSINESS MODEL:
The e-Business model, like any business model, describes how a company functions; how it
provides a product or service, how it generates revenue, and how it will create and adapt to
new markets and technologies. It has four traditional components as shown in the figure, The
e-Business Model. These are the e-business concept, value proposition, sources of revenue,
and the required activities, resources, and capabilities. In a successful business, all of its
business model components work together in a cooperative and supportive fashion.

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E-BUSINESS CONCEPT:
The e-business concept describes the rationale of the business, its goals and vision, and
products or offerings from which it will earn revenue. A successful concept is based on a
market analysis that identifies customers likely to purchase the product and how much they
are willing to pay for it.
GOALS AND OBJECTIVES:
The e-Business concept should be based, in part, on goals such as "become a major car seller,
bank, or other commercial enterprise", and "to become a competitor to some of the well-
known firms in each of these industries." Objectives are more specific and measurable, such
as "capture 10% of the market", or "have $100 million in revenues in five years." Whether
these goals and objectives are realistic or not, and whether the company is prepared to
achieve these goals is addressed in the business plan process for startup firms and in the
implementation plan for an existing firm that is considering a significant change. In looking
at the business model it is sufficient to know what the goals and objectives are, and whether
they are being pursued.

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CORPORATE STRATEGIES
Embedded in the e-Business concept are strategies that describe how the business concept
will be implemented. These are known as corporate strategies because they establish how the
business is intended to function. These strategies can be modified to improve the performance
of the business. Environmental strategies, discussed in a following section, describe how the
company will address external environmental factors, over which it has no control.
THE E-BUSINESS CONCEPT AND MARKET RESEARCH
The selection and refinement of the business concept should be integrally tied into knowledge
of the market it serves. In performing market research care must be taken to account for the
global reach of the Internet for both customers and competitors. It is also important to
remember that markets shift, and can shift rapidly under certain conditions. But most
important is to truly understand what the market is, who comprises it, and what do they want.

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THE E-BUSINESS CONCEPT
PRICE
Pricing is an important part of the e-business concept and should be established on the basis
of market research. Price is often set with an eye on the competition and can have a direct
effect on market share. In traditional commerce in the U.S., the seller sets the price. Online
pricing, on the other hand, may include negotiation or auction pricing, where the interaction
of sellers and buyers can affect the price. Knowledge of competing prices is also readily
available online, and will keep downward pressure on prices.
When is it OK to increase prices? It depends on the business. If a company has high fixed to
variable costs, prices should be changed cautiously. If customers are "locked-in", and the
product or service is less sensitive to price, then prices may be changed, to a degree, with less
risk. But all changes should be checked beforehand with market research and financial
analysis.

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A potential problem for some products is that the market may change faster than the seller
can change the product or service. One way to survive in this environment is to sell at the
minimum price that allows a profit, avoid price changes and continuously upgrade the
product. This approach is often used in computer hardware and software sales. At the same
time the seller should invest in finding how to shorten the development cycle, and put in
place a market research program that will quickly identify trends and changes.
The steady development of a product has other advantages. It evens out the revenue stream
rather than having the "boom or bust" cycle of a single product. It also shows that the
company is steadily developing and upgrading products for the customers who should begin
to buy into the company's vision. And customers, analysts, and investors will develop
confidence that the company is going to be around for the long-term.
The price must also provide real value to the customer, that is the customer must be pleased
with the purchase of the product or service. In addition to price, the buyer may also be
interested in how the product can be of assistance to his company. In this case, comparisons
of price and ROI may be used to show that the offering adds more value than a competitor's.
The price can also be a basis for building long-term customer relations, which can lead to
multiple sales. For example, as retail customers become more comfortable shopping on a site,
it should be easier to get them to migrate to higher margin products.

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VALUE PROPOSITION
The value proposition describes the value that the company will provide to its customers and,
sometimes, to others as well. With a value proposition the company attempts to offer better
value than competitors so that the buyer will benefit most with this product.
 Reduced price
 Improved service or convenience such as the "1 click" checkout
 Speed of delivery and assistance
 Products that lead to increased efficiency and productivity
 Access to a large and available inventory that presents options for the buyer
Providing value in an e-business uses the same approach as providing value in any business,
although it may require different capabilities. But common to both are the customers who
seek out value in a business transaction. The value proposition helps focus the business on the
well-being of the customer, where it remains in successful companies.

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VALUE DELIVERY THROUGH INTEGRATION OF
ACTIVITIES
INTEGRATION OF ORGANIZATION OR ENTERPRISE
OPERATIONS
The integration of systems inside and outside the organization can provide value for both
customers and the organization. One of the requirements for e-business is to link front-end
with back-end systems in order automate the online operations of the organization.
Front-end activities deal directly with the customer while back-end systems include all of the
internal support activities that do not deal directly with the customer. Some enterprises have
different geographic locations for front-end and back-end office activities and rely on the
integration of the associated computer and network systems for successful corporate
operations.
Front-End & Back-End Operations:

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Examples of activities that require integrated systems are:
 Order placement through point-of-sales systems
 Customization of products based on user requirements
 Production tracking
 Customer order fulfillment
EXTERNAL INTEGRATION: THE SUPPLY CHAIN
Operations on the Web can also extend to cooperating firms such as partners in a supply
chain, also known as a "Value Web". The Value Web may include a wide range of
participants as well as the possible use of a digital exchange to procure or sell products.
Many firms have participated in a supply chain for years using Electronic Data Interchange
(EDI) technology to buy and sell components and products.
Successful supply chains are vital for manufacturing operations since the timeliness, cost and
success of the final product may depend on a component part made by a single supplier. The
competence of suppliers may now be demonstrated through the ISO 9000 qualification
process, which is critical when using suppliers from foreign countries or when the final
products are exported.

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SUPPLY CHAIN INTEGRATION
When the supply chain transactions of the partners can be automated and integrated over the
Web into the back-end systems of each other, then the resources of all the chain partners can
be planned and managed for an efficient operation. An emerging approach to automate
transactions with partners is to link systems through the corporate portal, which greatly
reduces the integration requirements. Portal software now has potential connections, or
hooks, where the systems of different enterprises can be linked to securely transfer data.
In addition to good technology, it takes a strategy, time, resources and, most importantly,
trust between partners, for the supply chain to function successfully.

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STRUCTURAL CONCEPTS TO DELIVER VALUE
The effective delivery of value to a customer, requires that a company organize its structure
and functions according to the type of product or offering delivered. The value chain, as
popularized by Michael Porter 1, describes a linear set of steps, which could be activities or
business processes such as design, production and sales, whereby a manufacturing company
delivers value. This value chain delivery model strives for overall efficiency and cost
reduction by increasing the efficiency and reducing the cost of each business process. Each
step is independent and separable, and can be outsourced, or contracted out to another
company. The value chain becomes a supply chain when a company uses the inputs and
activities of other companies in its manufacturing process.
However, the value chain doesn't appear to describe how many service-oriented businesses
operate. Stabell and Fjeldstad, Timmers, and Afuah and Tucci, have developed additional
concepts of "value shop" and "value network", following the work of Thompson to address
other types of businesses.
The value shop describes a service operation, such as a consulting, law or accounting firm,
that focuses on customer needs rather than on the production process of the value chain. It
may also describe a department, such as customer service, within a larger organization. For
example a manufacturing company, a value chain operation, could have within it a
department that operates as a value shop.
The e-business set up as a value shop works directly with the customer to provide a
necessary, often unique, solution. The value shop is geared to solve specific client problems
rather than to make a common solution more efficient. Some value shops, such as large
consulting companies, will attempt to duplicate solutions among clients by introducing jargon
to describe steps in an approach, and by attempting to fit the client's problem to the approach,
rather than focusing on the client's problem.

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The value network is a type of e-business where networked users negotiate a transaction on a
web site. The value network hosts online auctions, brokering, market making, intermediation,
or other types of transactions.
The value network depends on growth in order to attract more users. When the number of
users on a value network increases, the network becomes more valuable to each participant
since it increasingly becomes the site where desirable transactions will take place. Ultimately
the strategy of network dominance results in large companies like eBay, since in theory it
drives all of the users to be on one network. However, for various reasons described in a
following section, this limit is never reached, and competitors do emerge, even for a company
like eBay.
Sources of Revenue
Depending on the business model, several revenue sources may be available to an e-business.
Many online businesses will have a three or four of these sources. A mix of revenue sources
is often referred to as a revenue model but may be mistakenly called a business model. Some
of these sources of revenue are:
 Advertising
 Affiliation
 Agent commissions
 Licensing
 Sales commissions
 Sales profits
 Sponsorship
 Subscription
 Syndication
 Use Fees

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For large public-private or government projects revenue sources might also include:
 Bonds, usually for large capital expenditures
 Taxes, primarily income, property and sales taxes
 Use fees and tolls
With small fast-growing companies such as e-Business startups, investors often track
expected revenues and revenue growth and may make changes to increase revenue. However,
after the Dot-Com boom ended, more traditional measures such as cash flow and earnings
have came back into favor as means of evaluation.
ACTIVITIES, RESOURCES AND CAPABILITIES
The activities, resources and capabilities of a business are sometimes known as its
requirements. In order to perform the activities required to carry out the mission of the
business, certain resources are needed; for example, employees with certain skills, or
capabilities, are needed to perform activities correctly and efficiently. Also, inventions,
processes and other intellectual property may add to the individual knowledge of an
employee to develop a competence in the performance of the required activities.
Activities
Activities are specific business processes or groups of processes such as design, production
and sales that implement the business concept. The operational business model identifies the
costs and outputs of each activity.
Activities drive the need for resources. Existing activities should be carefully scrutinized in
order to conserve resources and reduce costs. Activities left over from previous initiatives,
but not currently necessary should be curtailed. This may sound elementary but businesses
start many activities over time, especially if its business concept changes. But one doesn't
often hear of a large business curtailing its activities in order to focus on its current mission.

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E-BUSINESS PROCESSES:
Some fundamental e-business activities may infringe on patents. Business processes, or the
"method of doing business" may be patented, so that a business model may unwittingly
include the development or use of intellectual property owned by another party. Patents have
been freely awarded for even the most straight forward business processes.
 Amazon.com has a patent for "one click" purchasing technology and its "Affiliates"
program.
 CyberGold has a patent for pay-per-view ads where the customer enjoys an incentive
for clicking on them
 Netincentives has a patent for online incentives programs, possibly in conflict with
CyberGold's
 Netword LLC has a patent for a Web navigation based on keywords rather than URLs
 Open Market has a patent on electronic shopping carts, on paying with credit cards
using the secure socket layer encryption and on secure credit card transactions.
However, there are now several types of shopping carts.
 Priceline.com was issued a patent for its reverse auction method, that is, "name your
price" auction.
 Sightsound.com has a patent for selling digital content (e.g. downloading films) on
the Web.
 CI Software has a patent for EDI on the Internet

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One of the most widely renowned patent infringement cases was Amazon.com's patent for
"one click" technology for purchasing items, which was at the center of its dispute with
Barnes and Noble. One-click shopping allows the prospective buyer to bypass the use of a
"shopping cart", which is cumbersome for many users.
Amazon.com also has a patent for its "Affiliates" program, which allows the company to
market the products of other companies in return for a commission. This business process has
been used freely by traditional businesses since the beginning of recorded history and the fact
that this process has been patented is very controversial. Also controversial is Priceline.com's
patent for a reverse auction method, which it uses to sell airline tickets.
In effect, a few companies have patented Internet business models, which are being used by
many other companies. If these patents can be easily licensed at reasonable rates then there
won't be a problem in the future development of e-business. But if not, the resulting chaos
will inhibit the growth of the online business world.

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E-BUSINESS ENVIRONMENT AND STRATEGIES
The rate of change in e-business presents an enormous challenge to managers. Business on
the Internet is just beginning, and is evolving through a process of trial and error.
Management flexibility is a key for survival and success in e-business.
The environment of any organization consists of all of the factors that are beyond its control,
but influence it in one way or another. Examples of these factors are shown in the figure, E-
Business Environment and Strategies. To counter the potential adverse affects of these
factors, the e-business can respond with strategies.
An external strategy is an approach to deal with factors in the external business environment
such as competitors, markets, and technological developments, that are beyond the company's
direct control. This is different from a corporate strategy, which addresses factors under the
company's control such as the approach to marketing, sales, and pricing. Other components
of the business model such as the value proposition and sources of revenue may also include
strategies.

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THE E-BUSINESS ENVIRONMENT AND STRATEGIES
External strategies may be driven by components of the business model, such as finding
workers with certain capabilities to staff activities. If the required work force is not available
locally, the business concept may have to change, and workers brought in, or the work
outsourced. Even though strategies may be implicit in the business model, such as hire
workers at the industry wage, it is important to recognize them explicitly because they may
have to change as the business environment changes.

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THE COMPETITIVE ENVIRONMENT AND STRATEGIES
The competitive environment, sometimes known as the industry environment, results from
relationships with other firms. These relationships are with suppliers, customers, producers of
substitute products, potential new entrants, competitors, "complementary", and strategic
partners, which are described by Porter.
When suppliers are limited, they may keep prices high and reduce the profit of a firm that
buys from them. A strategy for the buyer is to find new suppliers, or producers of substitute
products. On the other hand, if there are only a few buyers, they can keep prices low, but a
strategy for the seller is to find more customers to compete for products in order to raise
prices, or to find a more profitable of their industrial capacity. Therefore the Internet serves to
increase the knowledge of prices, find producers of substitute inputs, and subsequently cause
downward pressure on prices.
Potential new entrants to a market may also disrupt prices. Either they enter the market with
low prices to gain market share, or they cause the existing firm to lower its prices in order to
create a entry barrier to the new firm. Competitors may also cause prices to drop through
price wars, but can also contribute to stability in the marketplace. Finally, complementary,
firms that make products that need the firm's product to add value (e.g. software developers
for particular PC operating systems), as well as strategic partners can create demand for the
firm's products. In each case the Internet may be used to the advantage or disadvantage of the
e-business. The point is that an e-business must have an Internet strategy to be successful.

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MAINTAIN AND IMPROVE COMPETENCIES
One obvious strategy is to develop the capabilities, and to build and maintain competencies in
order to keep an advantage over other firms. To do this, one must understand market
conditions and the firm's strengths and weaknesses.
Other strategies to maintain competencies include:
 Block: The "block" strategy makes it difficult for other companies to copy business
processes and intellectual property. Blocks can be achieved by limiting knowledge
transfer about critical features or by reducing or indicating a reduction in prices.
 Run: The "run" strategy means the business innovates faster than potential
competitors. To pull it off the company needs competencies in critical areas.
 Strategic Alliance: The e-business works with other firms that are not usually direct
competitors. For small e-businesses, alliances may be essential since every facet of
growth can be facilitated through association with a well-known and capable partner.
Strategic alliances can solve immediate problems of developing capabilities in
distribution, shipping, and billing, and will allow the company to be "up and running"
very quickly. However, the small company should be concerned about losing its
autonomy and intellectual property to its larger partner.

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THE TECHNOLOGY ENVIRONMENT AND STRATEGIES
Technology plays an important role in e-business and must be tracked closely. It can shift
very quickly and greatly disrupt an unprepared company.
DISRUPTIVE TECHNOLOGIES
When a new technology creates a different approach to performing a task that is less costly,
more efficient, or otherwise relatively advantageous and displaces existing technology, it is
known as a disruptive technology. These technical disruptions can cause businesses to fail,
particularly in those organizations unprepared to change their business model.
Examples of disruptive technologies are:
 Alternative Energy Generation at low cost.
 Artificial Intelligence including Autonomous Systems.
 Emergent Computing: Biocomputing, DNA Computing, Optical Computing,
Molecular or Chemical Computing, and Quantum Computing.
 Global e-Commerce with the Electronic Product Code (EPC) and RFID.
 Grid Computing, including Bioinformatics Grids and Economic Development Grids.
 Human-Machine Interaction: Intelligent Collaboration, Intelligent Design, and
Intelligent Training Systems.
 Nanotechnology.
 Open Courseware.
 Open Design & Problem Solving.
 Parallel Computing.
 Knowledge Representation and the Semantic Web.
 Superconductivity.
 Voice, Sight and Haptic (i.e. touch) Response Systems.
 Wireless Internet.

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TECHNOLOGY STRATEGIES
Every e-business concept based on a technology break-through runs the risk of being
replaced by a company with a newer technology. Therefore, a strategy to maintain
technological leadership, or to have access to the leading applicable technologies, is essential
for the long-term survival of a technology-based e-business.
A technical innovation strategy can be as simple as outsourcing the technical side of an e-
business rather than trying to maintain the competency in-house. If it is large enough, a firm
can develop new technologies. But for most firms, an R&D program is too expensive. One
option is to partner with an organization known for developing new technologies, so that they
become available as they are developed. Co-developing and licensing technologies are also
options. The use of a strategic alliance can serve as a technology strategy, as well as a
competitive strategy.
To avoid falling victim to a new technology, a firm must try to keep abreast of technological
developments that may affect its industry. Any company that is technology-dependent must
have someone in-house who is knowledgeable about the latest technical developments. But
more importantly, the company must be willing to take action when it appears that a major
advance in technology poses a threat.

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THE GENERAL ENVIRONMENT AND STRATEGIES
The general environment contains those factors that face most businesses: laws and
regulations, the economic climate, and worker availability.
Laws and Regulations
New laws and regulations may have unexpected effects on e-business, especially in the areas
of privacy, patents and other intellectual property. E-Business leaders should understand
regulations and the rational for local taxes, including how tax revenues are spent. Unfair tax
breaks should not be expected by an e-business; neither should businesses expect to compete
unfairly with other businesses.
Economic Climate
Sound financial strategies will help maintain cash flow and solvency during an economic
downturn. Many small businesses simply run out of money before products begin to generate
revenues. E-business should use the conservative accounting practices preferred by most
investors.
Worker Availability
The availability of qualified employees is one of the biggest problems for an e-business
attempting to grow from a startup into a small or medium sized enterprise. Although
technical workers became available in the economic downturn after the Dot-Com crash, the
availability of foreign workers decreased significantly after the terrorist attack of September
11, 2001. Larger technical companies, who had augmented their work force through hires of
foreign workers prior to "9/11" now feel that must outsource large numbers of jobs abroad in
order to find the talent needed to stay competitive. Whether outsourcing will be proven as a
successful strategy over time remains to be seen. Certainly it will work in some situations,
but it is unlikely to work in all situations.
Strategies for the local work force include obtaining and keeping qualified employees with
programs such as training, child care, and employee services. Training programs are also
necessary for all employees to develop skills in new technologies.

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E-BUSINESS: AN EMBATTLED BUSINESS CULTURE
its simplest form, e-business involves incorporating the Internet or its technologies to support
a basic business process. For example, your order entry system, connected directly to the
inventory database, is typically accessed from the field by sales reps calling their product
availability inquiries in to an order entry administrator.
The sales reps call in through a static GUI program or by e-mail to an order entry clerk, who
processes each inquiry by order of receipt.
The process works but may bog down during peak periods of the day or when the staff is
short-handed. Besides, the main function of the order entry staff is to process actual orders.

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Providing product availability information to the field is a related responsibility that is often
super ceded by higher priorities.
Processing last minute requests in preparation for a meeting is too often out of the question.
To complicate matters, you also have independent dealers and affiliates requiring product
availability status reports as well as inquiries on an ongoing basis.
After deciding that the product availability inquiry activity is suitable for an e-business
application, the next step is identifying the information asset(s) the process generates.
The mapping of information assets with the processes that support them is a critical
requirement in e-business application development.

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PRODUCT INQUIRY FULFILLMENT PROCESS
Instead of field personnel interacting with a character-based, static GUI or other generic front
end to generate the inquiry request, they would access a front end that is capable of running
in their browser, a personal digital assistant (PDA), or wireless hand device. The front end—
Web server—must be able to perform the function provided by the order entry staff.
That is, it must be able to access the inventory database, gather the information required by
the inquiry, format the response, and feed it back via the Internet to the appropriate place
(field) in the user’s browser, which is running the application on a laptop, home office
computer, PDA, and so on. The application also does some housekeeping chores by clearing
the inquiries from the front end and the remote database calls from the back end, or inventory
database.

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CROSSING THE DIGITAL CHASM WITH MIDDLEWARE
Most likely, the front-end Web application, or what the users see and interact with in the
browser, is developed with Internet-enabled technologies, such as Java or HTML application
tools. The back end could be, for instance, a legacy UNIX database that has been a mission-
critical application for some time.
To accomplish the interconnectivity between the front-end browser application and the back-
end UNIX database, yet another application system, typically referred to as middleware, must
be used to provide the interconnections, or compatibility, between the dissimilar front- and
back-end applications. Examples of middleware are systems developed with J2EE (Java 2
Platform Enterprise Edition).

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Developed by Sun Microsystems, J2EE is more popular in Web application development
than CORBA (common object request broker architecture), introduced by the Object
Management Group in 1991, or DCOM (distributed component object model), which is
Microsoft’s bet for an object standard. However, the other standards are growing in use for
Web application development.
With middleware in place, the e-business application provides the same functionality of the
previous system. However, the virtual process replaces the traditional product inquiry and
physical clearinghouse process and provides greater operating advantages and overall
benefits to the enterprise.

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E-BUSINESS: THE SHAPING AND DYNAMICS OF A NEW
ECONOMY
E-business is a revolution: a business existence based on new models and digital processes,
fueled by hyper growth and new ideals.
It is also pursuit of new revenue streams, cost efficiencies, and strategic and competitive
advantages spawned by virtual business channels. Cutting-edge Internet technologies and
new vistas of emerging technologies enable e-business.
E-business is a forging of a new economy of just-in-time business models, whereby physical
processes are being supplanted by virtual operating dynamics. Yes, e-business is all this.
THE E-BUSINESS SUPPLY CHAIN
Typically, e-business is described and discussed with more emotion than other business areas,
and rightfully so. After all, we are witnesses to an exciting revolution.
To gain true insight and a conceptual understanding of e-business, it needs to be defined from
both the B2C and the B2B perspectives.
This section also introduces Internet, or digital, supply chains and reveals their underlying
significance to both the B2C and B2B e-business channels.

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THE B2C SUPPLY CHAIN STREAMLINES PROCESSES OF
THE PHYSICAL WORLD
THE BUSINESS-TO-CONSUMER PHENOMENON
When consumers purchase goods and certain classes of services directly from the Internet,
online retailers are servicing them. In other words, online retailers, or e-tailers, have initiated
a consumer-oriented supply, or value, chain for the benefit of Internet consumers. This form
of Internet-based activity is known as business-to-consumer (B2C).
Supply chain is used interchangeably with value chain. However, supply chain, in the
traditional sense, refers to the supply and distribution of raw materials, capital goods, and so
on, that are purchased by a given enterprise to use in manufacturing or developing the
products and services for customers or in regular business operations. In B2C distribution
modes, supply, or value, chain refers to the system, or infrastructure, that delivers goods or
services directly to consumers through Internet-based channels.

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B2C e-business is a rich, complex supply chain that bears no direct analogy to the physical
world. In fact, no supply chain in the physical world compares to B2C value chains such that
an apples-to-apples comparison can be made. Thus, B2C e-channels are unique because they
are providing supply chains that streamline and enhance processes of the physical world.
Internet-driven supply chains depend heavily on the coordination of information flows,
automated financial flows, and integrated information processes rather than on the physical
processes that traditionally move goods and services from producer to consumer.
THREE CLASSES OF B2C VALUE CHAINS MAKE POSSIBLE THE
FOLLOWING E-BUSINESS REALITIES:
1) Delivery of the universe, or an unlimited number—potentially millions—of
goods and services within established markets, by operating under a single
brand identity or as a superefficient intermediary.
2). Creation of new market channels by leveraging the Internet.
3). Elimination of middlemen while streamlining traditional business processes

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E-BUSINESS: THE SHAPING AND DYNAMICS OF A NEW
ECONOMY
Amazon.com and CD Now are excellent examples of the B2C class indicated in class 1.
Amazon has succeeded by producing an efficient consumer product delivery system.
The value in this e-business channel is the uniting of many backstreet dealers under the
banner of one popular brand name. CD Now is also attempting to implement a similar
strategy. Furthermore, no one bookstore or music store in the physical world offers 10 million
titles like Amazon.com does or 325,000 CDs like CD Now does. Traditional book or CD
retailers in established markets could never offer this vast array of merchandise, because of
shelf space and inventory constraints. For example, the typical super bookstore or music
CD store stocks only 150,000 or 60,000 titles, respectively.
An example of B2C class 2 is eBay, which created a new market channel in establishing an
online auction facility. Through this e-business channel, buyers and sellers—everyday
consumers—can interact to sell personal items in a venue that did not exist previously.
Dell.com is an example of the third B2C e-business class. Dell.com is successful because it
incorporates the principle of disintermediation, or the ability to eliminate intermediaries from
the value chain. In other words, disintermediation involves disengaging middlemen, who
usually command a share of the value chain. Research has shown that intermediaries add a
large percentage to the final price of products.
Percentages range from 8 percent for travel agents to more than 70 percent for a typical
apparel retailer. Dell is a business case example of effective deployment of disintermediation
because its direct consumer model delivers custom-built computer systems at reasonable
prices by leveraging Internet channels.
In the future, other online supply chains will successfully remove middlemen, resulting
in even lower prices for other classes of goods and services.

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In summary, the Internet supply chains created to support B2C e-business initiatives have no
direct analogy in the traditional, or physical, world of commerce.
True, the two channels have similarities. The goods and services offered in physical bricks-
and-mortar retailers become sexy multimedia presentations and transaction data. E-tailers
and consumers connect via Web portals instead of driving to malls or to various business
concerns. Inventory becomes online transaction data that flows from the consumer’s
shopping cart of the online store— Web site—to fulfillment houses or directly to the
producers themselves.
B2C Value Chains Create The Following Three Types Of E-Business Realities:
1. In established markets, creation of digital supply chains that eliminate middlemen and
enable the availability of a unique service, such as Dell’s direct delivery of custom-built PCs.
2. Creation of a new market channel that did not exist in the physical universe, such as eBay’s
creation of the online auction facility for the convenience of everyday consumers.
3. Uniting of back-end, used or rare-product dealers under the banner of a popular name
brand. In effect, this creates a consortium of businesses under a single branded identity, or
under a new, superefficient intermediary, that did not exist in the physical world.

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THE BUSINESS-TO-BUSINESS PHENOMENON
B2B commerce growing from $150 billion in 1999 to $7.4 trillion by 2004! Presently, the
median transaction for B2B sites is three to four times the size of the median transaction for
B2C sites, or $800 versus $244.
Important drivers of this projected growth include, but are not limited to, competitive
advantage, reduction of costs, increased profits, and customer satisfaction. If you are able to
build an effective B2B channel, the payoff could be significant, resulting in improved
economies of scale and productivity, reduction in overhead, improved information flows and
processing, and increased operating efficiencies, to name a few.

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• REDUCE COSTS OF GOODS AND SERVICES AND POTENTIALLY
LOWER CUSTOMER PRICES.
By connecting information systems directly with suppliers and distributors, organizations
can realize more efficient processes, resulting in reduced unit costs of products or services
and, perhaps, lower prices to customers while effectively achieving economies of scale.
• REDUCE OVERHEAD. B2B channels can eliminate extraneous or redundant business
functions and related infrastructures, resulting in the reduction of overhead costs.
• INCREASE PRODUCTIVITY. By eliminating operational waste and the
automation of inefficient business practices, organizations can realize productivity gains.
• ENHANCE PRODUCT AND SERVICE OFFERINGS. With economies of
scale, reduction of overhead, operating efficiencies, and lower operating costs, such gains
may be passed on to the customer through lower prices or as enhanced or additional features
of products or services.
• CUSTOMER SATISFACTION. A strategic benefit of the successful
implementation of dynamic B2B business models is improved customer perception of the
transaction.
This metamorphosis will not occur unless companies undergo radical changes. Enterprises
will begin with critical self-examination and comprehensive process analysis to determine
what internal operating functions, underlying infrastructures, and critical practices are
necessary to transform into a B2B channel that is capable of leveraging the Internet.
This in turn will lead to the reengineering of processes, elimination of operational
inefficiencies, and, ultimately, increased productivity. If companies are successful, they will
reinvigorate their value chains, incorporate technology-driven processes that become the
foundation for B2B, and increase transactions with customers.

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END-TO-END SOLUTION
company cannot merely incorporate e-business technologies into an existing system (that is,
write something in Java). Rather, it must become an e-business through-and-through.
To reap full value, e-business methodologies should be universal throughout the
organization, from interaction with suppliers to transactions with customers.
More importantly, an e-business focused organization integrates these e-functions with core
business applications to maximize efficiencies at all operational levels. Business intelligence
is also key to the e-business model since, without the benefit of buying pattern analyses,
companies tend to simply open a Web catalog and compete on price — often with disastrous
results. Without a value add, an e-business is dead on arrival.
With this understanding, iSeries provides an ideal end-to-end solution platform. From
customer relationship management (CRM) to supply chain management (SCM), it applies
analytical business intelligence to better target e-business efficiencies. Emphasizing both
B2C and B2B practices — e-business on iSeries is so much more than simply an electronic
shopping cart application.

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E-BUSINESS FRAMEWORK
By anyone’s measure, embarking on a mission to establish a cohesive e-business project is
challenging. Couple that with the need to interoperate with tried-and-true back-office
systems, and you can end up with a task so large that a beginning point is hard to locate. To
meet this need, IBM developed the e-business Application Framework.
The Internet makes it possible to extend these mission-critical applications even further.
iSeries allows customers to easily integrate e-business solutions with line-of-business and
front-office applications that are being re-engineered as Web-based applications. iSeries is
unique in that it offers integrated (not add-on) e-business capabilities that optimize this server
for end-to-end e-business solutions and emerging workloads.

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TOOLS OF E-BUSINESS
TOOLS AND MIDDLEWARE
A wide range of tools are available to allow an iSeries or AS/400e system to play a key role
in the development and deployment of e-business applications. Within the e-business/e-
commerce modernization strategy, a number of specific categories of tools can be brought to
bear:
Application Servers are development and execution environments, many of which
come complete with developer tool sets for creating applications that may interoperate
with other like or unlike systems. These are typically based on Java and open standards-
based models.
Application Service Provider (ASP) Solutions include tools that allow Application
Service Providers to create and/or deploy applications via the Internet to multiple
customers from the ASP's site(s).
B2B Connectors & Enablers are tools specifically targeted to B2B applications and
the Internet deployment of the supply chain. Many of these tools focus on connecting
buyers and sellers via e-marketplaces, as well as other many-to-one and one-to-many
scenarios, thus consolidating the catalog and buying process.
Browser Front End to Existing Application Solutions are created with tools that
can be used to connect core business application code to a browser-based presentation
of that code via Java or HTML with little or no actual coding required on the part of the
programmer.

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New Browser-based Applications can be built from scratch using tools that create
the GUI client presentation code and the back-end processing code.
Browser Utilities can be used to create and maintain components of a Web-based
application and can also be used to build applets to access data. Other
miscellaneous tools are included here as well.
CRM Solutions are tools that are designed to assist customer service functions.
These tools include business rules that can be implemented to enhance the support
for customers.
EAI (Enterprise Application Integration) tools facilitate the connection of ERP
solutions to other back end applications, including the extraction of data from ERP,
reformatting and transport of the data across heterogeneous servers and loading of
the data into the databases used by the receiving application such as Business
Intelligence.
e-Commerce Solutions are largely “already finished” applications that can be
customized with minor effort to perform a specific purpose — generally a "shopping
cart" type of application, although some solutions may be dedicated to CRM or other
mission-critical application areas.
Electronic Data Interchange/eXtensible Markup Language (EDI/XML) refers to tools
that allow for the movement, via the Internet, of data between vendors and systems within
the supply chain.
Payment Servers are tools that validate charge card purchases by contacting the holding
card company to confirm the availability of credit for the purchaser. These tools also
provide trusted security and confidentiality routines, as is demanded more and more by
consumers when providing personal and private information.

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Portals & Personalization tools allow the creation of web portals and creation of
personalized user interfaces. Users are given the capability to save their configurations for
future web site visits.
Web Access to DB2 UDB for AS/400 is delivered via tools and utilities that provide access
from the browser to DB2 UDB for AS/400 tables. These tools may simply provide database
connection drivers via JDBC, or they may be higher level tools with their own GUI for
building queries against DB2 UDB for AS/400.
Web Report Viewers are tools that allow the end user to view iSeries or AS/400 print spool
files via a browser. These tools hold promise for workers whose jobs involve many hours of
browsing through archived AS/400 print output. These tools can also extract AS/400 print
and distribute the print files in PDF or other Web formats to Internet users via e-mail tools.
Wireless Access Solutions can be achieved by using tools for writing/extending applications
to handheld devices. As an interesting side point, the personal information management
(PIM) industry (which includes Palm Pilots and Hand Spring Visors that link to e-mail via
wireless modems) is expecting record-breaking sales in the last quarter of 2000. Wireless
access is becoming as mainstream as the cellular phone, both of which will accelerate
demand for wireless access solutions. These tools allow the programmer to deploy a 5250
application to a tier0 device with no change to the underlying RPG application in most cases.

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BUSINESS MODELS:
A method of doing business by which a company can generate revenue to sustain itself
• Spells out where the company is positioned in the value chain
• Business models are a component of a business plan or a business case
THE CONTENT OF A BUSINESS PLAN
Mission statement and company description.
• The management team.
• The market and the customers.
• The industry and competition.
• The specifics of the products and/or services
• Marketing and sales plan.
• Operations plan.
• Financial projections and plans.
• Risk analysis.
• Technology analysis.

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STOREFRONT MODEL:
• Storefront model enables merchants to sell products on the Web.
• Transaction processing, security, online payment, information storage.
• E-commerce allows companies to conduct business 24-by-7, all day every day, worldwide.
• An e-commerce storefront should include:
• Online catalog of products
• Order processing
• Secure payment
• Timely order fulfillment
SHOPPING CART TECHNOLOGY
SHOPPING CART
• An order-processing technology allowing customers to accumulate lists of items they wish
to buy as they continue to shop.
• Product catalog
• Merchant server
• Database technology
• Combine a number of purchasing methods to give customers a wide array of options

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ONLINE SHOPPING MALLS
• Wide selection of products and services.
• Offers greater convenience than shopping at multiple online shops.
• Consumers can make multiple purchases in one Transaction.
AUCTION MODEL
• ONLINE AUCTION SITES
• Act as forums through which Internet users can log-on and assume the role of either bidder
or seller.
• Collect a commission on every successful auction.
• Sellers post items they wish to sell and wait for buyers to bid.
RESERVE PRICE:
• The minimum price a seller will accept in a given Auction.
REVERSE AUCTIONS
Allow the buyer to set a price as sellers compete to match or even beat it.

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PORTAL MODEL
PORTAL SITES
• Give visitors the chance to find almost everything they are looking for in one place
HORIZONTAL PORTALS
• Portals that aggregate information on a broad range of topics.
• Yahoo!, AltaVista, Google.
VERTICAL PORTALS
• Portals that offer more specific information within a single area of interest.
• WebMD.
HORIZONTAL PORTALS

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DYNAMIC PRICING MODELS
• The Web has changed the way products are priced and purchased.
COMPARISON PRICING MODEL
• Web sites using shopping both technology to find the lowest price for a given Item.
DEMAND-SENSITIVE PRICING MODEL
• Group buying reduces price as volume of sales increase.
NAME-YOUR-PRICE MODEL
• Name-your-price for products and services.
BARTERING MODEL
• Individuals and business trade unneeded items for items they desire.
REBATE MODEL
• Sites offer rebates on product at leading online retailers in return for commission or
advertising revenues.
FREE OFFERING MODEL
• Free products and services generate high traffic.

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E-BUSINESS ADVERTISING
• Traditional
• Television, movies, newspapers and magazines
• Establish and continually strengthen branding
• Brand is a symbol or name that distinguishes a company and its products or services from
its competitors and should be unique, recognizable and easy to remember.
• Publicize URL on direct mailings and business cards
• Online advertising
• Place links on other sites, register with search engines
BANNER ADVERTISING
• BANNER ADS
• Located on Web pages, act like small billboards, usually contain graphics and an
advertising message.
• Increased brand recognition, exposure and possible revenue.
SIDE PANEL ADS OR SKYSCRAPER BANNERS
• Advertisements that lie vertically on Web sites
• Place logo on banners, enhancing brand Recognition

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BANNER ADVERTISING
• Inventive color schemes and movement.
• Flashing, scrolling text, pop-up boxes and color changes.
• Pop-up box is a window containing an advertisement that appears separate from the screen
the user is viewing, pops up randomly or as a result of user actions (can have a negative
effect due to their intrusive nature)
• Determine the best position on sites for a banner
• Web sites cluttered with ads annoy visitors
• Space can be more expensive during high traffic
• Exchanging banners with another site

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BUYING AND SELLING BANNER ADVERTISING
• Buy advertising space on sites that receive a large number of hits and target a similar
market.
• Selling ad space provides additional income.
• Monthly charges for online advertising rarely used.
CPM (COST PER THOUSAND)
• A designated fee for every one thousand people who view the site on which your
advertisement is located.
• ADVERTISING PAYMENT OPTIONS
• Pay-per-click: you pay the host according to the number of click-through to your site
• Pay-per-lead: you pay the host for every lead generated from the advertisement.
• Pay-per-sale: you pay the host for every sale resulting from a click-through.
• Selling advertising space.
• Provide appropriate contact information on your Web site.
• Register with organizations that will sell your space for you.
• These companies typically charge a percentage of the revenue you receive from the
Advertisements placed on your site.

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ORGANIZATIONAL STRATEGIES FOR E-BUSINESS
To be successful in e-business, an organization must master the art of electronic relationships.
Traditional means of customer acquisition such as advertising, promotions, and public
relations are just as important with a Web site.
Primary business areas taking advantage of e-business include:
• MARKETING SALES
• FINANCIAL SERVICES
• PROCUREMENT
• CUSTOMER SERVICE
• INTERMEDIARIES
MARKETING/SALES
Direct selling was the earliest type of e-business and has proven to be a steppingstone to more
complex commerce operations. Successes such as eBay, Barnes and Noble, Dell Inc., and
Travelocity have sparked the growth of this segment, proving customer acceptance of e-
business direct selling. Marketing and sales departments are initiating some of the most
exciting e-business innovations
.
Cincinnati’s WCPO-TV was a ratings blip in 2002 and is now the number three ABC
affiliate in the nation. WCPO-TV credits its success largely to digital billboards that promote
different programming depending on the time of day. The billboards are updated directly
from a Web site. The station quickly noticed that when current events for the early-evening
news were plugged during the afternoon, ratings spiked.

83
The digital billboards let several companies share one space and can change messages
directly from the company’s computer. In the morning, a department store can advertise a
sale, and in the afternoon, a restaurant can advertise its specials.
Eventually customers will be able to buy billboard sign time in hour or minute increments.
Current costs to share a digital billboard are $40,000 a month, compared with $10,000 for one
standard billboard.
FINANCIAL SERVICES
Financial services Web sites are enjoying rapid growth as they help consumers, businesses,
and financial institutions distribute information with greater convenience and richness than is
available in other channels. Consumers in e-business markets pay for products and services
using a credit card or one of the methods outlined.
Online business payments differ from online consumer payments because businesses tend to
make large purchases (from thousands to millions of dollars) and typically do not pay with a
credit card. Businesses make online payments using electronic data interchange (EDI)
Transactions between businesses are complex and typically require a level of system
integration between the businesses.
Many organizations are now turning to providers of electronic trading networks for enhanced
Internet-based network and messaging services. Electronic trading networks are service
providers that manage network services. They support business to- business integration
information exchanges, improved security, guaranteed service levels, and command center
support.
As electronic trading networks expand their reach and the number of Internet businesses
continues to grow, so will the need for managed trading services. Using these services allows
Organization to reduce time to market and the overall development, deployment, and
maintenance costs associated with their integration infrastructures.

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PROCUREMENT
Web-based procurement of maintenance, repair, and operations (MRO) supplies is expected
to reach more than $200 billion worldwide by the year 2009. Maintenance, repair, and
operations (MRO) materials (also called indirect materials ) are materials necessary for
running an organization but do not relate to the company’s primary business activities.
Typical MRO goods include office supplies (such as pens and paper), equipment, furniture,
computers, and replacement parts.
In the traditional approach to MRO purchasing, a purchasing manager would receive a
paper-based request for materials. The purchasing manager would need to search a variety of
paper catalogs to find the right product at the right price.
Not surprisingly, the administrative cost for purchasing indirect supplies often exceeded
the unit value of the product itself. According to the Organization for Economic Cooperation
and Development (OECD), companies with more than $500 million in revenue spend an
estimated $75 to $150 to process a single purchase order for MRO supplies.
E-PROCUREMENT
E-procurement is the B2B purchase and sale of supplies and services over the Internet. The
goal of many e-procurement applications is to link organizations directly to preapproved
suppliers’ catalogs and to process the entire purchasing transaction online. Linking to
electronic catalogs significantly reduces the need to check the timeliness and accuracy of
supplier information.
An electronic catalog presents customers with information about goods and services offered
for sale, bid, or auction on the Internet. Some electronic catalogs manage large numbers of
individual items, and search capabilities help buyers navigate quickly to the items they want
to purchase. Other electronic catalogs emphasize merchandise presentation and special offers,
much as a retail store is laid out to encourage impulse or add-on buying. As with other
aspects of e-business, it is important to match electronic catalog design and functionality to a
company’s business goals.

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CUSTOMER SERVICE
E-business enables customers to help themselves by combining the communications
capability of a traditional customer response system with the content richness only the Web
can provide—all available and operating 24x7. As a result, conducting business via the Web
offers customers the convenience they want while freeing key support staff to tackle more
complex problems. The Web also allows an organization to provide better customer service
through e-mail, special messages, and private password-Web access to special areas for top
customers.
Customer service is the business process where the most human contact occurs between a
buyer and a seller. Not surprisingly, e-business strategists are finding that customer service
via the Web is one of the most challenging and potentially lucrative areas of e-business. The
primary issue facing customer service departments using e-business is consumer protection.
CONSUMER PROTECTION
An organization that wants to dominate by using superior customer service as a competitive
advantage must not only consider how to service its customers, but also how to protect its
customers. Organizations must recognize that many consumers are unfamiliar with their
digital choices, and some e-businesses are well aware of these vulnerabilities.
For example, 17-year-old Miami high school senior Francis Cornworth offered his “Young
Man’s Virginity” for sale on eBay. The offer attracted a $10 million phony bid. Diana Duyser
of Hollywood, Florida, sold half of a grilled cheese sandwich that resembles the Virgin Mary
to the owners of an online casino for $28,000 on eBay.
highlights the different protection areas for consumers. Regardless of whether the customers
are other businesses or end consumers, one of their greatest concerns is the security level of
their financial transactions.

86
This includes all aspects of electronic information, but focuses mainly on the information
associated with payments (e.g., a credit card number) and the payments themselves,
that is, the “electronic money.” An organization must consider such issues as
encryption, secure socket layers (SSL), and secure electronic transactions (SET)
NEW TRENDS IN E-BUSINESS: E-GOVERNMENT
AND M-COMMERCE
Recent business models that have arisen to enable organizations to take advantage of the
Internet and create value are within e-government. E-government involves the use of
strategies and technologies to transform government(s) by improving the delivery of services
and enhancing the quality of interaction between the citizen consumer within all branches of
government. customer-focused links connect users to millions of Web pages, from the federal
government, to local and tribal governments, to foreign nations around the world.
M-COMMERCE:
In a few years, Internet-enabled mobile devices will outnumber PCs. Mobile commerce , or
m-commerce , is the ability to purchase goods and services through a wireless Internet-
enabled device. The emerging technology behind m-commerce is a mobile device equipped
with a Web-ready micro-browser. To take advantage of the m-commerce market potential,
handset manufacturers Nokia, Ericsson, Motorola, and Qualcomm are working with
telecommunication carriers AT&T Wireless and Sprint to develop smartphones. Using new
forms of technology, smart phones offer fax, e-mail, and phone capabilities all in one, paving
the way for m-commerce to be accepted by an increasingly mobile workforce. Figure 3.33
gives a visual overview of m-commerce.

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Amazon.com has collaborated with Nokia to pioneer a new territory. With the launch of its
Amazon.com Anywhere service, it has become one of the first major online retailers to
recognize and do something about the potential of Internet enabled wireless devices. As
content delivery over wireless devices becomes faster, more secure, and scalable, m-
commerce will surpass landline e-business (traditional telephony) as the method of choice for
digital commerce transactions.
According to the research firm Strategy Analytics, the global m-commerce market was
expected to be worth more than $200 billion by 2005, with some 350 million customers
generating almost 14 billion transactions annually.
Additionally, information activities like e-mail, news, and stock quotes will progress to
personalized transactions, “one-click” travel reservations, online auctions, and
videoconferencing.
M-COMMERCE TECHNOLOGY OVERVIEW
1900s. Technology is a primary force driving these changes. Organizations that want to
survive must recognize the immense power of technology, carry out required organizational
changes in the face of it, and learn to operate in an entirely different way.

88
OFFICIAL SITES OF E-BUSINESS
Flipkart
Website: (www.flipkart.com)
Flipkart is an Indian e-commerce company headquartered in Bangalore, Karnataka. It was
founded by Sachin Bansal and Binny Bansal in 2007. In its initial years, Flipkart concentrated
on online sales of books, but it later on expanded to electronic goods and a diversity of other
products. Flipkart offers multiple payment methods like credit card, debit card, net banking,
e-gift voucher, and the major of all Cash on Delivery. The cash-on-delivery model adopted
by Flipkart has proven to be of great significance since credit card and net banking
penetration is very low in India.
2. Snapdeal:
Website: (www.snapdeal.com)
Snapdeal is a leading online marketplace, headquartered in New Delhi, India. Snapdeal
features products across categories like mobiles, electronics, fashion accessories, apparel,
footwear, kids, home and kitchen, sports, books; and services like restaurants, spas &
entertainment amongst others. The company was started by Kunal Bahl, a Wharton graduate

89
and Rohit Bansal, alumnus of IIT Delhi, in February 2010. Snapdeal also provides discounted
deals connecting with local merchants.
3) Fashionandyou:
Website: (www.fashionandyou.com)
Fashion and You is a private invitation only shopping club, based in Gurgaon, India. It was
founded by Harish Bahl in November, 2009. The fashion site features collections by top
designers for men, women and children for up to 80% off retail prices. Fashion and You
obtain authentic designer merchandise straight from the brand and provides it exclusively to
its members through limited-time events.
4. Myntra:
Website: (www.myntra.com)
Myntra was established by Mukesh Bansal, Ashutosh Lawania, and Vineet Saxena in
February 2007. All three are IIT graduates, and have worked for several start-ups. Myntra is
headquartered in Bangalore and has been funded by Venture Capital funds like IndoUS, IDG
& Accel Partners. Myntra.com works as an online shopping retailer of fashion and casual
lifestyle products. The company started off in the business of personalization of products, and
soon expanded to set up regional offices in New Delhi, Mumbai and Chennai.

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5. Homeshop18:-
Website: (www.homeshop18.com)
HomeShop18 is the online and on-air retail and distribution venture of Network 18 Group,
headquartered in NOIDA, India. HomeShop18 was launched on 9 April, 2008 as India's first
24-hour Home Shopping TV channel, where anchors performed live demonstration of
products on sale. The television channel established HomeShop18's foothold in Indian retail
because of high television penetration. Later, as the internet reach grew all over the country,
HomeShop18 expanded to the internet.
8. Yebhi.com:
Website: (www.yebhi.com)
Yebhi.com is an Indian Online shopping E-commerce portal for Home, Lifestyle & Fashion
e-retailer, launched in the year 2009. Yebhi, which began as BigShoeBazaar.com, has a
registered user base of about 1.5 million people, of who about half a million have transacted
on the site. Nexus Venture Partners and N. R. Narayana Murthy’s Catamaran Ventures
invested 40 crore in Agarwal’s company in mid-2011. On July' 10th 2012, Big Shoe Bazaar

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India Pvt Ltd. owner of Brand Yebhi.com announced that it has raised 100 Cr in Series C
round of funding led by Fidelity Growth Partners India and Qualcomm.
9) Caratlane:
Website: (www.caratlane.com)
Caratlane is India's first online jewellery store with an assorted range of diamond jewellery
designs to offer every customer. They offer more than 1,40,000 loose diamonds, and over
1000 ready to choose diamond jewellery online like diamond rings, pendants, earrings,
bracelets, bangles and gold coins for all budgets. The quality & authenticity of diamond
jewellery is validated with BIS Hallmarking and Certification from International labs like
GIA, IGI, HRD and AGS. The website offers discount up to 25 percent of prices. This
advantage is achieved with no inventory cost, minimal overhead cost, no intermediaries and
in-house manufacturing facility.
Buying jewellery online in India is more challenging with the lack of touch and feel factor.
To counter this, Cartlane.com also offers ‘try at home’ facility before buying a jewellery
online, to ensure complete satisfaction of look and size. The clients also receive personalized
service from the qualified jewellery consultants every time they buy jewellery online. With
easy payment options including convenient 6 or 12-month EMIs, customers can enjoy free,
insured delivery anywhere in India.

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Research Limitation
One of the limitations in research includes lack of adequate information on a
particular subject.
Research equipments are very hard or expensive to acquire leading to
formulation mere assumptions. Another hindrance is poor or inaccessibility to
the region of study.
Some of the limitations of doing a research include access of information,
availability of enough resources and time management. The availability of
experts in editing and guidance may also be minimal where support from
friends or organisation may not be enough.

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DATA ANALYSIS AND INTERPRETATION AND FINDINGS
CONCLUSIONS:-
 community consensus on essential details to improve quality of products
and services based on real requirements of end-users.
 successful implementation among early adopters which then results in a
faster and broader adoption process.
 greater flexibility for innovation and increased revenues.
 the differentiation by cost, availability, speed, reach and flexibility when
the product becomes a commodity, as profit margins decrease.

A project report on e business

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