THRIBHUWAN UNIVERSITY

MAKWANPUR MULTIPLE CAMPUS (MMC)

HETAUDA, MAKWANPUR

A REPORT ON

The role of E-commerce in reducing operational cost in an organization

Submitted By: Amisha Adhikari

Exam Roll No: 3413/19

T.U. Registration No: 7-2-242-5-2019

BBM 7th semester

Submitted To: Office Of Dean

Under Guidence : Madhu Kumar Singh

( In partial fulfillment of the requirement for the course E-commerce project work of Bachelor
Degree “BBM 7Th “ semester 2024)

April, 2024
 ACKNOWLEDGEMENT

Firstly , I would like to thank all the people who have helped me in completing this project. Also,
a special thanks to our E-commerce teacher Madhu Kumar Singh for his Complete Guidance
throughout this report. I also want to thank the department of faculty for helping me to do the
necessary research.

ABSTRACT

The termendous advancements that have occurred in the area of trade and traffic markets,
companies and items that are numerous and diverse, as well as the increasing competitions
among these companies to achieve benefits, e-commerce for the modern trade emerged,
which has contributed significantly to change the future of the business and has contributed by
working with the process of electronic trading in increasing the efficiency of companies and
strengthening its competitive position to change the future of business. The benefits and
challenges of ecommerce, as well as their role in the cost reduction will be further in this
research. Business capital is scarce and people who own capital need to enter the world of
commerce, ecommerce has opened up a field of opportunity for them, rather than only for
those with a lot of money, was once the case, has opened up an e-commerce field for them.
Because of this, the enormous dedication to cost reduction has emerged as the central focus of
this study.
Table of Content

Topics:

Chapter 1: Introduction

1.1 Background of the study

1.2 Objectives of the statement
1.3 Significance of the study
1.4 Scope/ Limitation of the study

Chapter 2: Research Methodology

2.1 Research Design

2.2 Sources of data

Chapter 3: Presentation and Analysis of Data

3.1 Concept of E-commerce

3.2 Benefits of E-commerce

3.3 Challenges of E-commerce

3.4 Role of E-commerce in Reducing Operational Cost

Chapter 4: BIBLIOGRAPHY AND REFERENCES

 Chapter-1

1.1 Background Of The Study

E-commerce is the process of conducting business electronically among various

entities in order to satisfy an organizational or individual objective. A key ingredient
of E-commerce, sometimes referred to as electronic trading, is the advertisement
and procurement of goods and services over the internet. With success in
establishing an environment in which E-commerce can grow and flourish, every
computer can become a window open to every business, large and small, around the
globe.

The electronic medium we call the internet has the potential to reduce actual
transaction time, processing time and operational cost dramatically, while at the
same time making information available globally. E-commerce has been embraced as
the means of reducing operational cost and as a high potential means of generating
revenue.

E-commerce provides new channels for the globe marketing of tangible goods and
presents opportunities to create new business providing information and other
knowledge-based intangible products. Although most E-commerce is currently at the
inter-corporate and inter-organization level, services targeted at individual
customers are evolving rapidly. The Internet is the most obvious example of this and
is a major catalyst in the diffusion of E-commerce, helping to foster a common
environment for electronic transaction of all kinds. E-commerce is expanding
because of the greater number of businesses and individuals who are able to use
these networks and the growing number of ways in which businesses can conduct
transactions electronically with other organizations and directly with consumers at a
reduced cost. E-commerce contributes to economic efficiency in five important ways.
They includes shrinking distances and timescale, lowering distributions and
operational costs, speeding product development, providing more information to
buyers and sellers and enlarging customers choice and supplier reach. However, this
study is focused on the role of E-commerce in reducing cost in an organization.

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1.2 OBJECTIVES OF THE STUDY

Basically the main objectives of the study is to examine about the “THE ROLE OF E-COMMERCE
IN REDUCING OPERATIONAL COST IN AN ORGANIZATION”. Moreover, overall objective of the
study can be specified follows:

1. To examine the role of E-commerce in reducing operational cost in an organization.

2. To identify other benefits accruable from E-commerce.
3. To identify the challenges of E-commerce.
4. To examine the use and adaptation of E-commerce by business.
5. To increase the Brand Visibility.
6. To enhance operational efficiency.
1.3 SIGNIFICANCE OF THE STUDY

The study of reducing operational cost in an organization holds significant implications for its
overall performance, competitiveness, and sustainability. By scrutinizing and optimizing
operational expenses, organizations can unlock various benefits that directly impact their
bottom line. Firstly, reducing operational cost enhance financial stability and profitability,
allowing organization to allocate resources more efficiently towards growth initiatives,
innovation, and strategic investments. This, in turn, fosters long term visibility and resilience in
an increasingly dynamic business environment. Moreover, cost reduction initiatives enables
organization to offer competitive pricing, thereby attracting more consumer and gaining market
share. Furthermore, by streamlining processes and eliminating inefficiencies, organization can
improve operational efficiency and productivity, leading to faster turnaround times, better
customer satisfaction, and increased employee morale. Additionally, reducing operational cost
aligns with sustainability goals by minimizing resources consumption, waste generation, and
environmental impacts. Ultimately, the significance of studying and implementing strategies to
reduce operational cost lies in its potential to drive financial performance, enhance
competitiveness, and ensure the long-term success of the organization.

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1.4 SCOPE/ LIMITATION OF THE STUDY

This study will cover the benefits of E-commerce with special focus on its influence as regards

operational cost reduction in business organization.

LIMITATION OF THE STUDY

Financial Constraint: Insufficient funds tends to impede the efficiency of the researcher is
sourcing for the relevant materials, literature or information and in the process of data
Collection ( internet, questionnaires and interview).

Time Constraint: The researcher will simultaneously engage in this study with other academic
work. This consequently will cut down on the time devoted for the researcher work.

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Chapter-2
RESEARCH METHODOLOGY
Research is the systematic investigation into and study of materials and sources in
order to establish facts and reach new conclusions. The process used to collect
information and data for the purpose of making business decisions. The
methodology may include publication research, interviews, surveys, and other
techniques, and could include both present and historical information.

2.1 RESEARCH DESIGN

The research design refers to the overall strategy you choose to integrate the different
components of the study in a coherent and logical way, thereby ensuring will efficiently
address the research problem; it constitutes the blue print for the collection,
measurement, and analysis of data. Here we have used the descriptive research design
i.e. design which seeks to describe the current status of variable or phenomenon. The
researcher does not begin with the hypothesis, but typically develops one after the
data is collected.

2.2 SOURCES OF DATA

For the study purpose both primary and secondary data are used. The primary data
collected from sales men of the companies, customers and dealers dealing in the
products of the company. The secondary data collected from the record of the
company, retailers and dealers. The data of past sales also have been collected. The
primary and secondary data have been collected to cover every aspects of the
study.

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2.2.1 PRIMARY SOURCES OF DATA

Under this methodology researcher collects the original data. These data are master data and
no any researcher has ever collected these data. The data collected by this method is called
primary data. Researcher has used questionnaire and direct interview methods for collecting
data under primary method.

2.2.2 SECONDARY SOURCES OF DATA

Under this, method we use already published data or materials for our research work. The
data collected under this methodology are collected under this methodology are called
secondary data. The secondary data are obtained in the form of articles, records, surveys etc.
In our report writing we have also used various records under secondary method.

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CHAPTER-3

PRESENTATION AND ANALYSIS OF DATA

3.1 CONCEPT OF E-COMMERCE

E-commerce may be defined as the application of information and communication technologies

(ICT) in support of all the activities for conducting commerce. Commerce constitutes the
exchange of products and services between business, groups and individuals and can be seen as
one of the essential activities of any business. Electronic commerce focuses on the use of ICT to
enable the external activities of any business. Electronic commerce focuses on the use of ICT to
enable the external activities and relationships of the business with individuals, groups and
other business.

E-commerce or the Electronic Commerce is a methodology of modern business, which

addresses the need of business organizations, vendors and customers to reduce cost and
improve the quality of goods and services while increasing the speed of delivery. E-commerce
refers to the paperless exchange of business information using the following ways:

 Electronic Data Exchange

 Electronic Mail
 Electronic Fund Transfer(EFT)
3.2 Benefits of E-commerce
The Benefits of E-commerce are as follows:

1. Faster Buying Process

Customer can spend less time shopping for what they want. They can easily browse
through many items at a time an buy what they like. When online, customer can find
items that are available in physical stores far away from them or not found in their
locality.

2. Global Reach: Business can reach customers worldwide, expanding their market
reach beyond geographic limitations. By reaching customers in different countries or
regions, business can tap into new markets and audiences, unlocking growth
opportunities.

3. Cost –Effective: Lower operational cost compared to brick-and –mortar stores, as

there’s no need for physical retail space and fewer staff requirements. E-commerce
platform often integrate inventory management system, helping businesses
optimize stock levels, minimize overstocking or stock outs, and reduce associated
holding costs.

4. Increase Brand Visibility: Increasing brand visibility in e-commerce involves

leveraging the digital landscape to enhance brand recognition and exposure on
global scale.

5. Increased Sales: Access to a Large Customer Base can lead to increased sales
opportunities.

6. Affordable Advertising and Marketing: Seller don’t have to spend a lot of money to
promote their items. The world of e-commerce has Several affordable, quick way to
market online. Ecommerce market place is a visual channel- and sellers can really
show off their product. For Example, Amazon sellers can use advertising tools to add
videos, and good quality resolution images.

7. Flexibility for Customer: An important advantage of e-commerce to business is that

seller can provide flexibility to customers. One highlight is that the product and
services are ready 27/7. The result is that seller can offer his items any place ,any
time.
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8. Faster response to buyer/market demands: Every interaction is faster if you start
selling online. E-commerce marketplaces offer you a streamlined logistics or delivery
system. What this means is that the buyers order gets delivered efficiently. Products
returns management is one more plus point that can be handled quickly- you either
refund payments or give a placement.

9. Several Payment Modes: Buyers like personalization- the same goes for payment for
their orders. E-commerce marketplaces permit multiple payment modes that
include UPI, cash on delivery, card on delivery, net banking, EMIs on credit or debit
card and play-later credit facility.

10. Enables easy exports: E-commerce Exports assists sellers to directly sell to
international customers in global marketplaces, allowing them to transcened beyond
national boundaries and expand abroad. With e-commerce, sellers don’t have to
invest in physical setup to reach customers.

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3.3 Challenges Of E-commerce

Most Of the limitations of electronic commerce stem from the newness and rapidly
developing pace of the underlying technologies. These limitation will disappear as
electronic commerce matures and become available to and accepted by the general
population. E-commerce disadvantages can be broadly classified in two major
categories.

1. Technical Disadvantages
2. Non-Technological Disadvantages

Technical Disadvantages

 There can be lack of system security, reliability or standard owing to poor

implementation of e-commerce.
 Software development industry is still evolving and keeps changing
rapidly.
 In many countries, network bandwidth might cause an issue as there in
insufficient telecommunication bandwidth available.
 Special type of web server or other software might be required by vendor
setting the e-commerce environment apart from network server.
 Sometimes, it becomes difficult to integrate e-commerce software or
website with the existing application or database.
 There could be software and hardware compatibility issue as some e-
commerce software may be incompatible with some operating system or
any other component.

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Non-Technical Disadvantage

 Initial cost: The Cost of creating or building E-commerce

application in-house may be very high. There could be delay in
launching the E-commerce application in house may be very high.
There could be delay in launching the e-commerce application
due to mistakes, lack of experience.
 User Resistance: User may not trust the site being unknown Face
less seller.
 Security/Privacy: It is difficult to ensure security or privacy on
online transaction.
 Lack of touch or feel of products during online shopping is a
drawback.
 E-commerce application are still evolving and changing rapidly.
 Internet access is still not cheaper and is inconvenient to use for
many potential customers, for example; those living in remote
areas.

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3.4 ROLE OF E-COMMERCE IN REDUCING OPERATIONAL Cost
E-commerce Plays Important role in reducing operational cost in organizations which are as
follows:

1. Reduced Overhead Costs: Traditional brick-and –mortal stores come with significant
overhead costs such as rent, utilities, and maintenance. E-commerce eliminates the
need of physical storefronts, thereby lowering these expenses.
2. Inventory Management Efficiency: With e-commerce, business can adopt efficient
inventory management that helps in reducing carrying costs, minimizing stock outs, and
preventing overstocking through real-time data analysis and automation.
3. Streamlined Order Processing: E-commerce platform automate order processing tasks,
reducing the need for the manual intervention and labor costs. Automated processes
such as order confirmation, payment processing, and shipping notification enhance
operational efficiency and reduced errors.
4. Supply chain Optimization: E-commerce facilities direct communication between
suppliers, manufactures, and customers, streamlining the supply chain process. Through
integration with suppliers and logistics partners, businesses can minimize transportation
costs, reduce lead times, and improve inventory turnover.
5. Targeted Market and Advertising: E-commerce enables businesses to implement
targeted market strategies based on customer data and preferences. By reaching the
right audience with personalized campaign, businesses can optimize marketing spend
and increase ROI, thus reducing overall marketing costs.
6. Scaling Opportunities: E-commerce allows businesses to scale operations more
efficiently compared to traditional retail models. With minimal incremental costs
associated with expanding online storefronts, businesses can reach new market and
cater to growing demand without significant investment in physical infrastructure.
7. Customer Self Service: E-commerce platform often include self service features such as
FAQs, chatbots, and online support forums, enabling customers to find answer to their
queries without the need for human assistance. This reduce customer service costs
while enhancing customer satisfaction and loyalty.

There is no denying that e-commerce has played a significant role in reducing

operational costs for many organization. Automated and near-automated purchasing
systems, for example; Furthermore, e-commerce systems have made it simpler and
faster for organizations to procure goods and services from a variety of suppliers.

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Chapter 4: BIBLIOGRAPHY (REFERENCES)

Andrew B.Whinston and Ravi Kalakota, ”Frontiers of electronic commerce”, Pearson 1996,ISBN
81-7808-357-5

Kenneth C Laudon, Carol G. Travels,”E-commerce business, technology society”, Pearson P.T.

Joseph ,”E-commerce a Managerial Perspectives”, PHI 2002, ISBN 81-203-2089-1.

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