E-Commerce

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. Electronic commerce or e-commerce refers to a wide range of online business activities for products and services. It also pertains to any form of business transaction in which the parties interact electronically rather than by physical exchanges or direct physical contact.

Is e-commerce the same as e-business?

While some use e-commerce and e-business interchangeably, they are distinct concepts. In e-commerce, information and communications technology (ICT) is used in inter-business or inter-organizational transactions (transactions between and among firms/organizations) and in business-to-consumer transactions (transactions between firms/organizations and individuals).

In e-business, on the other hand, ICT is used to enhance one’s business. It includes any process that a business organization (either a for-profit, governmental or non-profit entity) conducts over a computer-mediated network. A more comprehensive definition of e-business is: “The transformation of an organization’s processes to deliver additional customer value through the application of technologies, philosophies and computing paradigm of the new economy.”

Difference types of e-commerce

• Business-To-Business (B2B)

B2B e-commerce is simply defined as e-commerce between companies. This is the type of e-commerce that deals with relationships between and among businesses.The more common B2B examples and best practice models are IBM, Hewlett Packard (HP), Cisco and Dell. Cisco, for instance, receives over 90% of its product orders over the Internet.

Example of B2B from Malaysia:Exabytes

• Business-To-Consumer (B2C)

Business-to-consumer e-commerce, or commerce between companies and consumers, involves customers gathering information; purchasing physical goods (i.e., tangibles such as books or consumer products) or information goods (or goods of electronic material or digitized content, such as software, or e-books); and, for information goods, receiving products over an electronic network.

Example of B2C from Malaysia: maybank2u

• Business-to-Government (B2G)

Business-to-government e-commerce or B2G is generally defined as commerce between companies and the public sector. It refers to the use of the Internet for public procurement, licensing procedures, and other government-related operations. This kind of e-commerce has two features: first, the public sector assumes a pilot/leading role in establishing e-commerce; and second, it is assumed that the public sector has the greatest need for making its procurement system more effective

Example of B2G in Malaysia: Pemudah 

• Consumer-to-Consumer (C2C)

Consumer-to-consumer e-commerce or C2C is simply commerce between private individuals or consumers. This type of e-commerce is characterized by the growth of electronic marketplaces and online auctions, particularly in vertical industries where firms/businesses can bid for what they want from among multiple suppliers.16 It perhaps has the greatest potential for developing new markets.

Examples of C2C from Malaysia: Mudah

• Customer to Business (C2B) 

     Individual customers offer to sell products and services to companies who are prepared to purchase them.This business model is the opposite of the traditional B2C model. Elance was one of the first web

sites to offer this type of transactions. It allows sellers to advertise their skills and prospective buyers to

advertise projects. Similar sites such as Peopleperhour and Guru work on the same basis.

Islamic e-commerce link :Islamic e-commerce

Information System (IS)

An information system (IS) can be any organized combination of people, hardware, software, communications networks, and data resources that collect, transforms, and disseminate information in an organization. 

INFORMATION SYSTEM RESOURCES

The basic IS model shows that an information system consists of five major resources:

• People resources

• Hardware resources

• Software resources

• Data resources

• Network resources

People Resources: People are required for the operation of all information systems. This people resource includes end users and IS specialists.

End Users - People who use an information system or the information it produces. Most of us are information system end users. And most end users in business are knowledge workers, that is, people who spend most of their time communicating and collaborating in teams of workgroups and creating, using, and distributing information.

IS Specialists - People who develop and operate information system including system analysts, software developers, system operators, and other managerial, technical, and clerical IS personnel.

Hardware resources: include all physical devices and materials used in information processing.

Machines- physical devices such as computers, peripherals, telecommunications networks.

Media- all tangible objects on which data are recorded paper, magnetic disks etc.

Software resources: All sets of information processing instructions.

• Program - a set of instructions that causes a computer to perform a particular task.

• Procedures - set of instructions used by people to complete a task.

Data Resources: Data constitutes a valuable organizational resource. Thus, data resources must be managed effectively to benefit all end users in an organization. The data resources of information systems are typically organized into:

• Databases - a collection of logically related records or files. A database consolidates many records previously stored in separate files so that a common pool of data records serves many applications.

• Knowledge Bases - hold knowledge in a variety of forms such as facts and rules of inference about various subjects.

Network Resources: Telecommunications networks like the Internet, intranets, and extranets have become essential to the successful electronic business and commerce operations of all types of organizations and their computer-based information systems. Telecommunications networks consist of computers, communications processors, and other devices interconnected by communications media and controlled by communications software. The concept of network resources emphasizes that communications networks are a fundamental resource component of all information systems. Network resources include:

• Communications media (twisted-pair wire, coaxial cable, fiber-optic cable, and microwave, cellular, and satellite wireless systems.

• Network support (people, hardware, software, and data resources that directly support the operation and use of a communications network)

An information system model expresses a fundamental conceptual framework for the major components and activities of information systems. An information system depends on the resources of people, hardware, software, data, and networks to perform input, processing, output, storage, and control activities that convert data resources into information products.

The information systems model outlined in the text emphasizes four major concepts that can be applied to all types of information systems:

• People, hardware, software, data, and networks, are the five basic resources of information systems.

• People resources include end users and IS specialists, hardware resources consist of machines and media, software resources include both programs and procedures, data resources can include data and knowledge bases, and network resources include communications media and networks.

• Data resources are transformed by information processing activities into a variety of information products for end users.

• Information processing consists of input, processing, output, storage, and control activities.

(Source: Foundations of Information Systems in Business )