E-COMMEERCE MCA-IV 2020

SCOPE, NEEDS AND IMPORTANCE OF E-COMMERCE

Essay on E-Commerce:
Electronic commerce, commonly known as e-commerce, is the buying and selling of product or service over electronic
systems such as the Internet and other computer networks. Electronic commerce draws on such technologies as
electronic funds transfer, supply chain management, Internet marketing, online transaction processing, Electronic Data
Interchange (EDI), inventory management systems, and automated data collection systems.

Modern electronic commerce typically uses the World Wide Web at least at one point in the transaction‟s life-cycle,
although it may encompass a wider range of technologies such as e-mail, mobile devices and telephones as well.
Electronic commerce is generally considered to be the sales aspect of e-business. It also consists of the exchanging of
data to facilitate the financing and payment aspects of business transactions.

Even today, some considerable time after the so called „dot com/Internet revolution‟, electronic commerce (e-commerce)
remains a relatively new, emerging and constantly changing area of business management and information technology.
There has been and continues to be much publicity and discussion about e-commerce. Library catalogues and shelves
are filled with books and articles on the subject.

However, there remains a sense of confusion, suspicion and misunderstanding surrounding the area, which has been
exacerbated by the different contexts in which electronic commerce is used, coupled with the myriad related buzzwords
and acronyms.

In the emerging global economy, e-commerce and e-business have increasingly become a necessary component of
business strategy and a strong catalyst for economic development. The integration of Information and Communications
Technology (ICT) in business has revolutionized relationships within organizations and those between and among
organizations and individuals.

Specifically, the use of ICT in business has enhanced productivity, encouraged greater customer participation, and
enabled mass customization, besides reducing costs. With developments in the Internet and Web-based technologies,
distinctions between traditional markets and the global electronic marketplace-such as business capital size, among
others-are gradually being narrowed down.

The name of the game is strategic positioning, the ability of a company to determine emerging opportunities and utilize
the necessary human capital skills to make the most of these opportunities through an e-business strategy that is
simple, workable and practicable within the context of a global information milieu and new economic environment.

With its effect of leveling the playing field, e-commerce coupled with the appropriate strategy and policy approach
enables small and medium scale enterprises to compete with large and capital-rich businesses. On another plane,
developing countries are given increased access to the global marketplace, where they compete with and complement
the more developed economies.

Department of MCA & M.Sc.-IT, Dr. Shyama Prasad Mukherjee University, Ranchi
E-COMMEERCE MCA-IV 2020

Most, if not all, developing countries are already participating in e-commerce, either as sellers or buyers. However, to
facilitate e-commerce growth in these countries, the relatively underdeveloped information infrastructure must be
improved.

 ESSAY ON THE SCOPE OF E-COMMERCE:

There is high scope of e-commerce in each aspect of business, at present it is in the embryonic stage but in future e-
commerce would be the part of day to day activity of business firms.

Following are the marketing areas where we seek scope of e-commerce:

(i) Marketing, sales and sales promotion.

(ii) Pre-sales, subcontracts, supply.
(iii) Financing and insurance.
(iv) Commercial transactions – ordering, delivery, payment.
(v) Product service and maintenance.
(vi) Co-operative product development.
(vii) Distributed co-operative working.
(viii) Use of public and private services.
(ix) Business-to-administrations
(x) Transport and logistics.
(xi) Public procurement.
(xii) Automatic trading of digital goods like games, learning material, songs and music etc.
(xiii) Accounting and financial management.
(xiv) Legal advice

 ESSAY ON THE NEED FOR E-COMMERCE:

E-commerce and e-business are not solely the Internet, websites or dot com companies. It is about a new business
concept that incorporates all previous business management and economic concepts.
As such, e-business and e-commerce impact on many areas of business and disciplines of business
management studies:
1. Marketing:
Issues of online advertising, marketing strategies, consumer‟s behavior and cultures. One of the areas in which it
impacts particularly is direct marketing. In the past this was mainly door-to-door, home parties and mail order using
catalogues or leaflets.
This moved to telemarketing and TV selling with the advances in telephone and television technology and finally
developed into e-marketing spawning „e-CRM‟ data mining and the like by creating new channels for direct sales and
promotion.
2. Computer Sciences:
Development of different network and computing technologies and languages to support e-commerce and e-business,
for example linking front and back office legacy systems with the „web based‟ technology.

Department of MCA & M.Sc.-IT, Dr. Shyama Prasad Mukherjee University, Ranchi
E-COMMEERCE MCA-IV 2020

3. Finance and Accounting:

On-line banking; issues of transaction costs; accounting and auditing implications where „intangible‟ assets and human
capital must be tangibly valued in an increasingly knowledge based economy.
4. Economics:
The impact of e-commerce on local and global economies, understanding the concept of a digital and knowledge-based
economy and how this fits into economic theory.
5. Production and Operations Management:
The impact of on-line processing has led to reduced cycle times. It takes seconds to deliver digitized products and
services electronically; similarly the time for processing orders can be reduced by more than 90 per cent from days to
minutes.
Production systems are integrated with finance marketing and other functional systems as well as with business
partners and customers.
6. Production and Operations Management:
Moving from mass production to demand driven, mass customization customer pull rather than the manufacturer push of
the past. Web based Enterprise Resource Planning systems (ERP) can also be used to forward orders directly to
designers and/or production floor within seconds, thus cutting production cycle times by up to 50 per cent, especially
when manufacturing plants, engineers and designers are located in different countries.
In sub-assembler companies, where a product is assembled from a number of different components sourced from a
number of manufacturers, communication, collaboration and coordination are critical so electronic bidding can yield
cheaper components and having flexible and adaptable procurement systems allows fast changes at a minimum cost so
inventories can be minimized and money saved.
7. Management Information Systems:
Analysis, design and implementation of E-business systems within an organization; issues of integration of front-end and
back-end systems.
8. Human Resource Management:
Issues of on-line recruiting, home working and „intra- pruners‟ working on a project by project basis replacing permanent
employees.
9. Business Law and Ethics:
The different legal and ethical issues that have arisen as a result of a global „virtual‟ market. Issues are copyright laws,
privacy of customer information, and legality of electronic contracts.

 IMPORTANCE OF E-COMMERCE:
Today, we can see e-commerce is becoming a part of study of almost all the courses in management and commerce. It
is an integral part of any book or manuscript that is written on retailing, and it claims a significant share in this text also.
The reason behind this lies in the fact that e-commerce technology is different and more powerful than any of the other
technologies we have seen in the past century.
While these other technologies transformed economic life in the 20th century, the evolving Internet and other ITs will
shape the 21st century in many ways. The foremost of these is the rise of a sizeable class of Internet-habituated
consumers, and then is the creation of an ecosystem essential for e-tailing‟s growth. In India‟s case, both these factors
are poised to fall into place rapidly.

Department of MCA & M.Sc.-IT, Dr. Shyama Prasad Mukherjee University, Ranchi
E-COMMEERCE MCA-IV 2020

Prior to the development of e-tailing, the process of marketing and selling goods was a mass- marketing and/or sales
force-driven process. Consumers were considered as passive targets of advertising (promotional) “campaigns,” and
branding blitzes were intended to influence their long-term product perceptions (brand positioning) and immediate
purchasing behavior.
Selling was conducted in typical well-insulated “channels.” Consumers were viewed to be trapped by geographical and
social boundaries, unable to search widely for the alternatives with best price and quality. Information about prices,
costs, and tariffs could be hidden from the customers to get the resultant profitable “information asymmetries” for the
selling firm.
Here, information asymmetry means any disparity in relevant market information among parties in a transaction. E-
commerce has challenged much of these traditional retail business norms, assumptions, and behavior.

Department of MCA & M.Sc.-IT, Dr. Shyama Prasad Mukherjee University, Ranchi