• E-business Defined
• DTI 2003 International Benchmarking Study

E-business Defined

There is common misconception about what the terms e-commerce and e-business really mean. On face value they appear to be related, but is this just a question of terminology or do they refer to different technologies and processes?

The term e-business has evolved from the term e-commerce, or electronic commerce. Some commentators maintain that e-commerce and e-business are one and the same, while others argue that e-commerce is a subset of e-business.

The government’s position on this is:

E-business is not e-commerce. While e-commerce is a broad definition for electronic trading activities, e-business describes a greater degree of integration of communications technologies with business processes and management practices, often conducted via the Internet. It has implications that are inward as well as outward facing. The key to e-business success is understanding how your customers work as well as adapting the management of your business.

Indeed the consensus opinion seems to be that the key differentiator between e-commerce and e-business is that the latter includes the use of information and communications technology (ICT) for internal processes and systems in addition to inter-company trading and information exchange.

While an exact, agreed-upon definition of e-business is somewhat elusive, of more importance is that management are aware of the range of business benefits that e-business can bring to their organization. And those benefits are two-fold; there are greater opportunities for increasing revenues and equally significant opportunities for reducing business costs.

Greater revenues can be realistically achieved through improved exposure in the marketplace, increased customer retention, and through greater opportunities for cross selling. Cost reductions can be achieved across the full range of business activities including marketing, administration and supply-chain functions and relationships. The latest DTI Benchmarking Study suggests that from this range of potential benefits, businesses currently place more emphasis on supply-side cost reduction and less so on revenue generation.

There are also many intangible benefits including the potential for significant improvements in service levels, more responsive feedback from customers, greater partnership opportunities, improved customer relationships and an enhanced corporate image.

Further Information.