The term e-business is often used synonymously with the term e-commerce. Technically e-business is a broader term that encompasses not only e-commerce but, importantly, all the internal processes of an organization—such as production, inventory, and HUMAN RESOURCES—that become digitally based functions. This often necessitates a rethinking of every aspect of the business. When the organization establishes its strategy and goals to include e-business concepts, the result is often a radical redesign of how the entire organization conducts business. The entire business/economic environment has changed with the evolution of e-business and the introduction of digital-based design (DBD) models; many have described the new environment as dynamic, rapid, and reinventive. The speed at which information is exchanged globally has also increased the intensity and fierceness of business COMPETITION. Many companies have begun to think about competitors as partners in order to ensure their own survival. At the very least, many such businesses are building alliances and/or collaborating with competitors for survival. E-business strategy involves system-wide integration from suppliers through customers. This entails many aspects within the organization and its interface with other organizations with whom it has a business relationship. Specifically, on-line sharing of information with customers, suppliers, manufacturers, and partners is an integral part of e-business. Terms such as enterprise-resource planning (ERP), CUSTOMER-RELATIONSHIP MANAGEMENT (CRM), supply-chain management, and KNOWLEDGE MANAGEMENT (KM) are common in e-business. ERP integrates the entire organization’s resource planning, payroll and accounting, inventory, PURCHASING, manufacturing, marketing, distribution, and so forth into one digitally based management system. ERP changes the way that almost everyone in every department in the organization does his/her job. CRM involves all possible encounters with the customer. Designing a fully integrated system throughout the entire organization, regardless of the source of the interface, is often done with a call center. Interface originating on-line (e-mail and order form) or through telephone contacts resulting from catalogs or store visits can be handled from one location. This is sometimes achieved regionally or nationally to achieve economies. Marketing is another area that has substantially changed with e-business. Use of the computer allows information tracking that has not been easily done with past processes. One-to-one marketing with individualized promotions targeted to the specific customer’s needs has emerged because detailed information about the customer and his/her buying habits, interests, and so forth are readily available with data gathered on-line. Banners, affiliate programs, links, to promote the organization are new channels of marketing possible with e-business. Viral marketing, e-mail messages designed to encourage recipients to forward the message to their friends and colleagues, is emerging as an important marketing strategy. Multichannel marketing, such as Web, catalog, and storefront, is linked and piggybacked. Knowledge management changes the way information is gathered, shared, and disseminated throughout the entire organization and with customers, suppliers, manufacturers, and partners. The term collaborative commerce is being used to identify this information exchange on-line with business partners. Supply-chain management involves the information exchange about product flow and services, from suppliers, through the organization, and ultimately to customers and end users, i.e., the consumers. System compatibility becomes a major issue for this aspect of conducting ebusiness. Overall, e-business requires structural changes in the way organizations conduct business. The sharing of information and resources across the organization changes the way people do their jobs. This also changes the relationship of the organization with other businesses for full integration to occur. Because it breaks down barriers and often necessitates a radical cultural shift for the organization, ebusiness changes the entire way that an organization conducts business. This new approach needs to be integrated into the strategy of the organization for successful implementation to occur.
See also INTERNET MARKETING.