Lesson 15: The Internet

What Is the Internet? | The New Business Model | Intranets | Extranets | E-Commerce |

Technology Implications of Internet Applications

E-Commerce

E-Commerce Market Growing Rapidly

When we think of e-commerce, most of us think of business-to-consumer e-commerce, for example, Amazon.com.

However, the revenues that business-to-consumer companies are realizing are just the tip of the iceberg. The bulk of business on the Internet is actually business-to-business e-commerce which, as you can see by this chart, is skyrocketing.

In the last two years alone, the amount of business conducted over the Internet has gone from $1 billion to $30 billion, with an 80 to 20 business-to-business and business-to-consumer mix. The projections for the next two years and beyond are even more dramatic. Internet commerce will likely reach from $350 to $400 billion in 2002. Some estimates are even more aggressive and place the size of Internet commerce by 2002 at almost a trillion dollars.

And, most of us generally think that only big businesses are conducting e-commerce. In fact, over 97 percent of businesses conducting electronic commerce are companies with 499 employees or less, and 71 percent of those companies have less than 49 employees. As you can see, e-business has become a critical component of many businesses.

Typical E-Commerce Applications

Now let’s take a look at what you can do with e-commerce.

A few examples of e-commerce are:

   - Online catalog
   - Order entry
   - Configuration
   - Pricing
   - Order verification
   - Credit authorization
   - Invoicing
   - Payment and receivables

For example, by allowing customers to do their own online ordering, long-distance phone and fax service can be reduced. In addition, fewer people are required to take customer orders and do timely order entry. Finally, online electronic order forms eliminate data entry and shipment errors.

Benefits of E-Commerce

E-commerce can expand and improve business.When we think of e-commerce, we immediately think of selling online. We quickly realize the benefits of increasing revenue by supplying customers and prospects with valuable information at any time and providing them the opportunity to purchase online.

We also recognize how online ordering can cut costs significantly by reducing the staff needed to man an 800 number or physically write up orders.

Additionally, we understand that the Internet allows companies to extend their reach and sell into new markets without incurring global headcount costs

What most of us don’t realize is that these are only a few of the benefits of e-commerce.

Lets take a look at the following two more compelling benefits:

   - You can manage your inventory levels better. For example, an automobile manufacturer has its      suppliers linked via the Web for online ordering. A supplier can place an order directly and can see      immediately if the part is in stock or will need to be back ordered.

   - By putting valuable information on your Web site, customers can get answers quickly to most of their      questions at any time of the day, from any location. Customer satisfaction soars when customers can      get critical information at any time, from any location. It allows them to do business when they want      to, not during the traditional 8 to 5 business day.

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