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Impact of E-commerce on Business Systems

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Contents

  • Abstract
  • Introduction
      • Backgound and overview of the research context
      • Purpose and significance
      • Structure of research
  • Literature review
      • Business systems – definition and concept
      • E-commerce – concept and background
      • E-commerce – scope of application and limitations
      • Implication of e-commerce on business systems
  • Research Methodology
      • Research objectives
      • Research method and design
      • Data collection process
      • Selection of sampling unit
      • Ethical considerations
  • Results and findings
  • Discussion and conclusion
  • References

Abstract

An e-business model is a strategy used by a corporation to increase sales and profits. A revenue-earning medium centered on the essential components of any company endeavor — market, consumers, suppliers, and resources – is referred to as an e-business model. Attempts to draw precise differences between the many e-business models that exist across the world have resulted in new ideas and proposals. However, a simple definition of an e-business model is a company’s strategy to become a successful endeavor on the electronic media, often known as electronic commerce. It specifies a firm’s place in the value chain, which explains how it produces income.

With the application of suitable technology and trends, e-business has affected all areas of company operations. Total quality management, business process re-engineering, and global outsourcing are examples of business trends that have resulted in increasing automation of work processes and integrated systems with the aim of improving customer service efficiency. The way companies operate today has been re-defined by increased connectivity and a customer-centric strategy. The research study delves further into the effect of e-commerce on company processes. The study’s results indicate that e-commerce business models have aided in the creation of operational efficiency and a greater emphasis on using the power of data to gain a competitive edge for businesses.

Impact of E-commerce on Business Systems

Introduction

This section provides an introduction to the research study and a background overview of the research topic.

Background and Overview of the Research Context

Organizations have adapted to new applications and changing market trends, resulting in fast changes in business structures and systems during the last several decades. Managers have centered their strategies on establishing an enabling environment for business operations by implementing new business models that provide the company the flexibility and efficiency it needs to expand into new markets and generate revenue.

Businesses are a collection of activities or processes that assist in the production of products or services in order to generate income. The goal of a company is to bring in income and profit for the owner. Businessmen have been inventing new and innovative ways to make money since ancient times by creating something of value for which others are willing to pay money. Over the years, company tactics have developed to include increasingly sophisticated and creative methods that aid in increasing corporate efficiency and profitability. Managers are always looking for novel methods and re-engineering current processes in order to promote improved productivity and market reach. Infrastructure, communication, and technological advancements have all played a part in helping businesses achieve their goals and changing corporate processes to improve profits and market dominance.

The procedures and operational structure that assist in the conduct of business are referred to as business systems. The success of the company in achieving its business goals and objectives is reflected in the business processes. Production, accounting, marketing, and human resource management are all important activities in every company. Managerial functions are concerned with attaining excellence and simplifying work processes in order to promote high levels of employee productivity and organizational productivity. At each level of the organization, business systems are customized to suit the essential needs of conducting operations. Organizations have concentrated on developing innovative systems that assist them provide high-value products and services to their consumers, according to business system studies (Whitley, 2007). Over the last several decades, businesses have gradually shifted their focus to online platforms, which provide more opportunities for profit and market share. E-commerce is one of the most important elements of increasing organizational efficiency via business process innovation.

E-business or e-commerce is the latest evolving technology based concept that has replaced the conventional business systems. The new business model focuses on extended customer experience and instant accessibility that translates to higher market shares for goods and services and enhanced customer experience. The Internet has presented the organizations with the opportunity to tap a wide base of customers that goes beyond geographical boundaries. Today with more and more people having access to the Internet, e-commerce business models have become the most preferred option for enterprising individuals and organizations to promote their products and services.

The globalization of economies and liberalization of markets have changed the way organizations develop their strategies and market their products. The opening of markets has created an intense competitive business environment in which organizations have to focus on developing their competitive strengths in order to survive. Competitive pressures combined with the growing expectations of consumers in terms of receiving high value for their money has propelled the firms to focus on building their internal capabilities through innovative and efficient work processes that can help in providing high degree of customer satisfaction.

Purpose and Significance

Businesses across all sectors and segments have adopted the e-commerce model in search of extended market presence and increased profitability. A recent research report by Gridley & Company (2011) highlighted that online sales will overtake offline or traditional modes of selling by the year 2019. The report observes that e-commerce business models will facilitate regular transactional requirements of customers and boost private deals at an accelerated pace in the coming years (Gridley & Company, 2011). Industries like banking, insurance, publishing, electronics have established the efficacy of e-commerce business models by catering to the online transaction needs of customers and satisfying information needs of the prospective customers. The key focus of the e-commerce applications is on delivering instant response and action on customer query. However, the application and implementation of e-commerce strategies within organizations is not easy and in number of cases the shift to e-commerce models have not added value to company’s existing operations. Online grocery shops like Webvan, Kozmo and e-toys.com failed to deliver the expected results (BusinessPundit.com, 2008).

The key challenge is to develop and implement an e-commerce system that can support and integrate various business processes and enable a well-coordinated business system that can help the business achieve its goals and objectives. How has e-commerce changed the business systems and what kind of business process re-engineering takes place within organizations that make their shift towards the e-commerce model? These questions are important in understanding the benefits and implications of e-commerce business models. A number of research studies have extrapolated the benefits and impacts of e-commerce business models but very few have actually defined the impacts it has on business systems. The dissertation explores the key concepts and practices underlining the changes in business systems in context of e-commerce. It is important to analyze business systems and its evolving requirements in order to evaluate the ways in which e-commerce have impacted business systems.

Structure of Research

The research study follows a systemic approach that begins with a detailed insight and understanding of the research topic through theoretical frameworks and conceptual analysis. The literature review seeks to provide analytical overviews of what are business systems, how they have evolved over the years, what are e-commerce, its applications, and implications on the business systems. This is followed by the research methodology that outlines the research process, data collection techniques, and data analysis approach adopted by the researcher. The next section provides a detailed insight on the results and findings of the research process. The last section provides an in-depth analysis of the findings combined with the researcher’s observations and inferences. The conclusion provides recommendations on how e-commerce can increase the efficacy of business systems based on the observations and inferences of the research.

Literature Review

This section explores existing publications and printed resources to explain what business systems are, what is the e-commerce business model and how does it impact business system capabilities. The purpose of the literature review is to provide a detailed understanding of how e-commerce has impacted business systems through theoretical insights and conceptual frameworks that have been established by academicians and researchers in their works on this topic.

Business Systems – Definition and Concept

Businesses comprise of various systems or work processes that define the operational scope to facilitate production of goods and services for commercial goals (Watson, 1994). The primary goal of businesses is to earn revenue and profits through the sale of goods and services to customers. The conventional business management approaches focused on delivering the goods to local customer base who defined the market requirements and demand profile for specific goods or services. However, with globalization of economies, organizations have been exposed to a highly competitive market environment where the customer can select from wide variety of brands and alternatives to meet their requirements. The key to sustaining profitable ventures in such conditions is an effective business system that enables the organization to gain competitive advantage in the industry (Sanayei, 2003).

The term system in context of business has been defined as “the related set of business processes that produce the output of the entire enterprise” (Watson, 1994, p36). The business processes imply the horizontal work processes that when linked with other functions help in producing the desired goods and services. The tasks and activities are logical sequences to achieve desired goals and outcomes. These individual work processes comprise of different tasks and activities that combine to produce output of commercial value. The end objective of business systems is to create and add value to existing operations.

The business systems of today have evolved from its initial stages incorporating rudimentary functionalities such as manufacturing, marketing, distribution, sales, and finance to an increasingly streamlined and knowledge process oriented operations in the present times. While the conventional business systems supported traditional management practices such as planning, managing, controlling and executing, the modernistic approach followed a more dynamic approach to management and applying innovative work processes for increased efficiency (Watson, 1994). The existing business environment supports a knowledge based business system where organizational focus is on applying knowledge sharing practices and information based systems to study the pulse of the industry and markets (Leondes, 2005).  The latest innovation in re-engineering business processes is the e-commerce that has made a tremendous impact on way businesses operate and run today.

E-Commerce – Concept and Background

Since the beginning of history commerce has played a very important role in the human race. People are using the internet more regularly nowadays and therefore the way businesses are managed today is through the internet. In the last 10 years, a new kind of commerce has emerged: e-commerce, which involves the purchasing and selling of products via the internet. The old way of trading, that is physical trading, has been overruled by e-commerce, which is nowadays used by trading companies. Today, e-commerce is used more than physical trade as the businesses find it easier to trade through internet. Qin (2009) in his works on e-commerce defines the term as “various online commercial activities focusing on commodity exchanges by electronic means, Internet in particular, by companies, factories, enterprises, industrial undertakings and consumers” (p7). This definition highlights the significance of Internet and electronic means as the facilitator of commercial transaction between the buyer and seller.

Organizations can expand e-commerce as a new way to cater to the needs of organizations, traders and consumers so that the qualities of goods improve, while it is cheaper, easier and quicker through the use of internet. It is different from the old way of trading as it does not involve any physical money or goods for trading. The goods, money and information are transferred from one to another computer through e-commerce.

E-commerce – Scope of Application and Limitations

The application of e-commerce in business enterprises can be attributed to internet and advance technologies. As different web sites came into being the usage of internet advanced and the discoveries were done. Though they have a lot of advantages but they have their own drawbacks, as they have to be understood and agreed upon by everybody and therefore installed in the system. E-commerce though is quite beneficial but is not very low in cost to get it installed. Therefore, it has to be very carefully installed as this will need trained professionals and software’s of its own and will affect the cost or the investment of the businesses (Yaghoobi and Tajmohammadi, 2011).

Businesses want to be sure that the e-commerce system when installed will serve the business cause and objectives. Systems have to be installed in such a way that the business mottos have to be met with nominal cost and should be flexible enough if the nature of the business changes. Though internet is very useful, it is necessary for the companies to build up a secure system so that they prevent access or harmful use of their data. The security system should be designed in such a way that it should not reduce the flexibility or prevent complexity. It should have a built-in protection for customer details so that it cannot be accessed by anybody or everybody. It should also safeguard the personal details which are very important and which satisfies the customers or will be required by the businesses (Yaghoobi and Tajmohammadi, 2011).

When systems of two businesses are capable of exchanging documents through internet then cost reduction, improved performance and dynamic value chains will naturally occur. If these issues fail to occur then it is a failure of the system’s installation effort. Therefore the company’s system should be built in such a way that it makes these issues occur so that the customer can achieve their goal in electronic commerce. Though in most of the cases e-commerce helps the growth of the business but in some industries the traditional way of selling the goods can be the only way which helps the growth of the industry. The industries like the cosmetics, fashion clothes or some of the goods which is easily destroyed, the customers would like to see, feel and then go ahead to do the needful i.e., buying.  So e-commerce has its own limitations.  The businessmen dealing with such goods have a way to attract the customers online through simulations that create an atmosphere of the real store and fabric can be clearly perceived by the customers (Qin, 2009).

All the retail stores on the websites are located equally, as in the location does not matter.  Any store will be just a mouse click away, so the location does not make any difference. If the businesses or the companies have to attract new customers or retain the old ones then they will have to find ways to give the maximum benefit to their customers, build good relationship with their old customers and be loyal also.  They have to provide with some incentives to attract the new customers.  They have to provide security and advertise impressively. There are several ways to achieve success in e-commerce such as service, selection, value, performance, the feel of the site,  advertising, personal relationship, security and  attention given to the consumers. These involve providing the customers with a wide range of products to select from, deliver high value services that imply a focus on after sales service, prompt customer service, effective delivery mechanism, informative content, personalized attention, and increased security to enable hassle free transactions (Tassabehji, 2005).

Implication of E-Commerce on Business Systems

Advances in technology have constantly shaped organizational work processes and operational frameworks. Organizations adopting e-commerce business models have undergone massive transformations in its existing work processes and business information systems. The primary changes involve a shift towards knowledge based application systems and tools that enable the workforce to know the business better and promote organizational capabilities for achieving competitive advantage. Leondes (2005) in his works on intelligent knowledge based systems observes that “the key aspect of the e-business world is that companies will inevitably move more and more into a customer-centric and knowledge-based paradigm in order to increase competitiveness in an ever-changing market” (p132). In an attempt to increase organizational adaptability and flexibility to meet the changing requirements of the markets, business systems in the last few decades have focused on embracing knowledge based systems that equip the workforce with the desired information and knowledge for improved understanding of market dynamics. The goal of such business systems is on driving organizational capabilities to leverage its market leadership and increase market shares.

E-commerce, as discussed in the previous sections, leverage the company’s marketing capabilities and support strengthened customer relationships through direct interaction with customers, suppliers and other stakeholders. The e-commerce platform has proved effective in boosting the capabilities of organizations to meet the growing demands of the industry for greater efficiency in services and increased value creation for customers. However, the effectiveness of incorporating of e-commerce business models are to a great extent dependent on the way organizations manage the transition process. E-commerce business models imply widespread changes in existing work processes. The marketing department benefits from online platform since it enables the company to develop and strengthen customer relationship through direct interaction. Data mining processes enable the business to tap vital customer data and use it to formulate effective marketing strategies. This helps in delivering high value goods and services to customers (Tassabehji, 2005).

A significant aspect driving the success of e-commerce business model is globalization. Consumers who travel all over the world or businesses having global operation are global customers. The products sold online are global and hence it is the same all over the world or it is put together in the same manner all over the world. Online operations of organizations enhance the flexibility in which the part production is assigned to subsidiaries on changing conditions. It also facilitates in keeping track of the resources such as cost of equipment, facilities and people which is shared by the global companies. A prominent benefit of this type of business model lies in the fact that it facilitates business collaborations by the knowledge and the experience of people which can be easily accessed, shared and used to manage to support efforts of individuals or groups (Qin, 2009).

The use of technology in e-business has given scope to many business opportunities that are driving the economic forces today. One of the major impacts of the e-business models is witnessed in rapid emergence of the global outsourcing of services and operations. The outsourcing of services involves the transfer of knowledge using technology channels within the organisation. It involves high amount of data and information transfer that is facilitated with the effective use of high-end technology. The business model helps in building effective strategies making use of the engineered technology that enables hassle free communication between the outsourcing party and the outsourced party. The flow of communication and information data exchange process should be spontaneous without any complexity. This is very critical for smooth operations and effective results. Effective use of this business model has been made by the banking industry worldwide. Multinational banks have outsourced major departmental operations like credit card, payments, and query processing to other nations providing cheaper labour and lower cost of operations.

Research Methodology

This section presents a detailed insight into the research method used for the study, elaborating the reasons behind the choice of the specific methods, data collection process, and ethical considerations that formed an essential part of the research.

Research Objectives

The research objectives of the study were to analyze and explore the impacts of e-commerce on business systems. The desire to understand how business systems have evolved in the context of e-commerce was the driving force for this research. Hence the research study seeks to provide a deeper understanding of how business systems have evolved with the advent of e-commerce.

Research Method and Design

The research design is one of the key aspects defining the effectiveness of research process and its outcomes. It is important to select a suitable research methodology that can help the researcher collect vital facts, information and data related to the subject matter. The selection of an appropriate research method is based on the objectives of the research that defines the scope of the study (Malhotra and Birks, 2006). Hence the choice of research method is guided by the purpose and goals of the research study.

E-commerce is a recent business practice that has transformed the way enterprises approach markets and customers today. Since the research study required a deeper analysis of how this trend has impacted business systems, the researcher chose to adopt the qualitative method. The study warranted an in-depth exploration of facts, evidences and description of how e-commerce is shaping work processes and what are its implications. The qualitative approach enabled the researcher to use theoretical frameworks and research tools like surveys and questionnaires in order to gain a practical insight on the research topic (Silverman, 2006). Researches related to human contexts require the researcher to study the interactions and inter-relationship between each variable identified for the research study. This requires the study of the variables through different perspectives for improved understanding of the research process. Qualitative research methods are often used by researchers to explore and identify variations in human behaviour, actions and responses to specific situations and their possible explanations (Silverman, 2006).

Data Collection Process

One of the qualitative research tools used in this study are surveys and questionnaires that enable the researcher to gain practical insight into the individual perceptions and opinions in the context. Surveys and semi-structured interviews have been found to be effective tools in data collection process in the qualitative research method. Semi-structured interviews enable the researcher to elicit elaborate responses from the respondent that helps in gaining useful insights into the research study context (Cousin, 2008).  During the semi-structured interviews, questions were posed on e-commerce use trends, management problems, and potential advantages received by users. The whole interview process was designed to gather useful insights into the views and opinions of the respondent. The researcher conducted these interviews personally in an informal environment to ensure clarity in understanding and hence used simple language. Survey forms were distributed to the participants and were asked to fill in their responses.

The research study was carried out in distinctive phases that comprised of literature review, secondary data collection, preparing the questionnaire, selecting the sampling unit, collecting primary data, collating available data, analyzing data, and preparing the final report elaborating the observations and analysis of data. The literature review helped in understanding the key concepts behind business systems and e-commerce applications. The primary data collected from surveys and interviews helped in providing the researcher with practical insights on the topic.

Selection of Sampling Unit

Sampling involves identifying some individuals from different target groups to gain an overall impression and opinion about the intended product or service. Since it is practically impossible to research all consumers or even a section of the population, researchers identify a group of individuals that represent different sections of the target audience and this sample group is exposed to the research techniques to obtain field data.

The sampling unit for this study was selected randomly from the target group of employees working in e-commerce organizations, e-commerce application developers, managers, and general public who indulge in e-commerce transactions. 40 respondents were selected for this study.

Ethical Considerations

The researcher followed ethical principles for conducting the research study by intimating the respondents selected in the sampling unit and gaining their consent to participate in the research process. A letter of consent was sent each of the participants informing them about the purpose and objectives of the research and their role in the process. The participants signed their consent and gave it back to the researcher. The semi-structured interviews were collected only after the consent form was signed. Individual ideas and views were gathered only for the aim of improving the research arguments and giving an analysis of the study from many viewpoints. Any personal data related to the participants were kept confidential and anonymous to prevent misuse.

Results and Findings

The research and methodology section has elaborated the need for the induction of a scientific process which would take care of the requirement specification of the users, address problems associated with the e-commerce operations if they are not planned properly. In this section, results from the various surveys and interviews conducted would be reviewed and a deeper analysis would be made out of the findings of the survey. The research and methodology had enumerated the need of bridging the gap between theory and practical aspect of business systems and had conducted these interviews and survey questionnaire to the key members, policy holders, stakeholders and the users of the organization. There were a number of points stressed upon for the impact of e-commerce on business systems.

The survey was conducted with a specified group in mind who were the stakeholders, key management people, the users of the system and the developers of e-commerce systems. The groups were unanimous in their view that an e-commerce system requires a lot of planning associated with it. They stressed on the positive as well as negative aspect of the trade where the positive side of the coin was the opportunity to sell online to millions of customers across the globe and the negative side of the coin was that a single mistake would be devastating for the business. They were of the view that when an e-commerce model is not strategically planned, it would have dire consequences in spreading a bad name of the company instead of goodwill. Therefore it was important for the developers and planners of the system to strategically go about their e-commerce business model in a detailed manner and to see that all logistics and technology were fully behind the process.

The survey was conducted with semi structured interviews where the groups were informally asked questions about what they thought about the current organization process and what impact e-commerce would have on the business and the systems. 95% of the respondents were of the view that e-commerce would change the way companies used to do business as they have the potential to reaching out to millions of global customers where a 1% market share means huge revenue of the company. The ability to launch a website, e-market it to the target global markets, reach out to people and display thousands of products have made e-commerce the most lucrative way to increase sales through this online mechanism. 100% of the respondents were affirmative in their belief that technology had changed the way business and industries used to function. The advent of the internet technology had opened the global doors to reach out to customers. Customers were not limited to the retail shops in specific localities and cities where they could shop but were spread across geographical locations all across the globe where they could go for online shopping. To achieve a positive outcome, the respondents were convinced that a well thought over strategy and planned structure will enable a firm to successfully carry out the e-commerce venture. They believed that it was easier said than done and e-commerce needed a lot of planning of each and every aspect of the online application to run smoothly and ensure brand or company loyalty by the customers.

The development groups of e-commerce websites were also queried and they shed light on important issues like the viability, robustness and scalability of the e-commerce tools and its impact on business and industry. The respondents answered various queries relating to the technological aspects of the business. In the e-commerce model, technology plays a vital role in defining the strategies developed by the organization management. The team advised that depending on the requirement specifications, the technical team decides which platform would be the best for implementing the e-commerce solution. There are various platforms in which an e-commerce system can be developed which are Magento, OS Commerce, Zen Cart, IBM Websphere etc. The team also expressed their concern of having a detailed documentation of the e-commerce system, the structural design of the system and the testing at various phases. The requirement specification analysis would be an important document where the business logic needs to be specified and the structural pattern and process flow defined in detail. This will give an overview to the users and the management of the outcome of the system and how it will be perceived in the highly competitive market. They expressed the view to have a dynamic and flexible system where the system can be scaled up to incorporate new features for the users to keep returning to the website and have a loyal customer base. The technical team also stressed on the absolute necessity to keep the website as simple as possible in its appearance and usage so that it maintains user friendliness. Ease of usage and simple process for purchasing goods, the website should also incorporate quality features which would add value to the purchaser. Some examples given by them in the interviews were to add interactivity amongst the purchasers and sellers by giving them online video and chat options were the customers can contact the support team for queries. “Effective personalization tools and a good communication strategy seem important pre-requisites for the maintenance of a loyal long term customer-vendor relationship (Karat, Blom and Karat, 2004).

The respondents agreed that communication was an important segment of the online selling program where the customers required interaction with the sellers regarding specific queries regarding products. The respondents mentioned specific queries because the website already had the product display with photo gallery and product specifications. Any queries by the customers can be addressed by a communication process where the customers can have online chat option with support staff answering the concerns of the customers and guiding them for a smooth online sale. There can be further advanced communications system available like the video chat option where the users can avail this facility for a face to face online communication.

The respondents felt that there should be constant means of innovation of the website so that the customers see something new whenever they are visiting the site. The innovative means can be in the form of better and smarter product display. The respondents gave some interesting examples like for toy products, a gaming section can be there where the visitors can go and use the products and play with it. Similarly there can be innovative techniques like cosmetic products where the visitors or customers can go and upload their photograph and then try different kind of cosmetics on their face to see the results. These innovative ideas can be given the desired shape by the technical team who need to give a professional output to the innovative ideas. All these innovative ideas can make a difference to the website and give the organization an edge over their competitors in the current global market. The implementation of the innovative ideas needs to be carefully tested so that the users get the desired output which will increase the sales of the organization.

95% of the respondents were of the view that the success of e-commerce in the global market has more to do with building a sound business logic and process flow plan that can be marketed to global markets. This business logic and process flow involves a sound strategy which needs to be designed. The respondents discussed the strategy required for planning such a venture which was as follows:

  • The business logic
  • The budget and the identification of budgetary constraints
  • Identification of the target markets
  • Setting up of the logistics in the global target market
  • Identifying the socio-economic condition of the target market and also the political condition of the target country.
  • Having business partnerships and joint ventures
  • Analyzing the need for arranging venture capital funding

They also suggested the need to identify a business model whether it would be a Business to Business [B2B] venture or a Business to Customer [B2C] venture. They shared their views that B2C for e-commerce in the global market meant that the company had to arrange logistics like warehousing and have proper delivery mechanisms to complement their online sales. On the other hand, B2B would mean have alliances with other local businesses and wholesalers to whom the company can sell online and make arrangements to ship it to them at their local address. The group further added that the model will depend on the organization, its budget and its scalability in the global market. 80% of the respondents were of the view that there were entry constraints in the new market and it was important to garnish a partnership with local companies to enter the local market with ease. Moreover people can also have national sentiments which can be overcome with this local business partnership. Once a local partnership is done, it is easier for the organizations to gain in-roads into the foreign markets as their local partner understands the conditions fully well.

Discussion and Conclusion

This section will be discussing the research methodology, the literature review and the findings of the impact of e-commerce on business and systems and conclude the chapter. The research and methodology of the study focused on the samples and questionnaires designed to gain maximum output from the key people in the industry who are running or planning to execute an e-commerce venture. The identification of the target people for the interviews was important as the opinions given by them would shape the course of this study. To achieve its mission, the researchers were particular in selecting various groups for the sampling. These groups comprised of stakeholders and shareholders of the company, decision makers and key management people, users of the system and the development team. The research and methodology section also clearly described the sample questions which involved the number of pertinent questions, the characteristic of the research questions, the selection and assignment of the procedures leading to the e-commerce venture. It was further discussed regarding the utility of the research instruments and how efficient it was for the research team to have definite answers to questions which showed the huge impact e-commerce have on business and systems. The research methodology was conducted in a scientific and pragmatic manner where there was a correlation between theory and practice. This aspect of conducting research and methodology was important as only theory with no practical implementation is meaningless. The application of theory into practice defines the bridge which comes from the theoretical base, study and analyzes the market conditions, have a close look at all the practical business and trade quarters and then come up with a plan of execution. Studying and analyzing the market conditions is an important part of the study where the researchers and the marketers need to concentrate on a lot of global parameters. These parameters are:

  • Identifying the target market
  • Studying the trade relations with the country where the target market is situated
  • Understanding the socio-cultural situation of the country
  • Understanding the political situation of the country and the political relations shared with the target country
  • Studying the internet and technology infrastructure of the target country
  • Studying the purchasing power of the people and assessing the GDP and per capita income of the people in the target market
  • Analyzing the age group of target customers who are more likely to purchase goods and services online.
  • Trend analysis of the market
  • Identifying the scope of constant innovation to improve customer base and retain existing customers
  • Identify constraints if any in the social acceptance of providing their debit, credit cards or any bank information for purchasing online.

The above parameters discussed are extremely important components for the marketers and the stakeholders to know before they venture out in unknown territory. The e-commerce system is meant to facilitate trade and commerce so that people have the facility to buy goods and services from the comfort of their homes. The companies have an opportunity in the form of millions of customers across the globe where they can go ahead and purchase their products. To achieve this, the company needs to be prepared enough so that they can cater to all the markets by having the right logistics to deliver the goods. The important issues discussed by the planners and the marketers are that whether it would be worthwhile for them to gain an entry into the markets and what would be the barriers of entry and trade and commerce. The parameters mentioned above are pertinent so that the marketers study and analyze whether the target market has the potentiality or not. The customer retention and brand loyalty is of paramount importance where the company should be devising methods and strategies for achieving this. Customer retention comes with excellent post sales services and constant communication channels with the customers. The e-commerce website can have a separate support cell where existing customers can login and register their complaints and concerns which the company can address immediately. A prompt response and consecutive action is all it takes for the customer to know that there is a company which cares for its customers. The company provides them with access to company support and management staff in case of any issue, which gives them huge support in coming back to them for further purchases and recommendations are also given in huge numbers. “Furthermore, relationships with customers should be interpreted as capital assets”. (Thurau and Hansen, 2000).

The study had further discussed in the literature review the various theories pertaining to e-commerce and its practices. The study has provided the definition and concept of business systems in the modern day world. It has discussed how the business systems have transformed from the traditional processes of manufacturing, marketing, distribution and sales to a more comprehensive knowledge based process. The organization needs to support and work in the knowledge based sectors and have effective use of information systems to run their businesses. The concept and background of e-commerce was discussed where the e-commerce has been seen as a force to reckon in the current and future market where more and more companies are seeing the magnitude to which they can escalate their business operations and be a global player in the industry. The scope of e-commerce and applications and limitations are also discussed where the scalability of the system along with the cost of developing one should be measured. The e-commerce system is also a huge investment but the companies should see the net Return on Investment [ROI] it generates. The implication of e-commerce on business systems are discussed where the researchers of the system to go for a cost comparison as they do not have the necessity to open a physical retail store and incur costs on those stores. This can be compensated with the support staff personnel to give post sales services, relationship managers to maintain constant communication with the customers in an online environment. A customer centric approach is required of the company to keep a constant good relation with the customer so that they will come back to them and word of mouth reference will always keep coming for the company.

Globalization has made a world of difference to the retail and wholesale industry. Business partnerships and collaborations are required for these business systems for the companies to make in-roads into the foreign markets. It has stressed on the importance of the global business and e-commerce which complement each other. E-Commerce has opened the gates of the wholesale and retail market where customers do not even need to visit the market place but can sit and relax at home and have a virtual market place in their computer screens. The role of the internet is discussed in detail which has allowed such a vast online market place to be available to the customers. The customers have an opportunity to explore the online market place, search and shop for their products, view the products and their specification, watch videos of the products and then purchase it online as well. The modern day customer understands the utility it provides and is also aware that there is no difference in seeing the live products and the products on the internet which would be delivered to their doorstep once they purchase it. The organizations are also aware of the huge opportunity provided by the internet through e-commerce websites which has given them a huge global customer base to market too.

The research methodology section has discussed the research objectives which were to analyze the impact of e-commerce on business and systems. Business systems have undergone a see-saw change to a more knowledge based and technical approach with e-commerce coming into the world market. The research method and design were discussed where the qualitative method was chosen. The qualitative method ensured that an in-depth study is done which would focus on the vast parameters of designing and shaping up an e-commerce business system. The data collection process became an important tool for the researchers to study, understand and analyze the various aspects to the planning and designing of the business system with the e-commerce model. The data collection was done through sampling methods where sample questionnaires were provided to target groups. These groups or teams were been subject to semi structured interviews which were informal in nature but had a lot of depth to cover. The groups were asked different pertinent questions on the business model, the planning of the e-commerce venture, the logistics, the global market research, the barriers to entry into foreign markets, the logistics, the business partnerships and joint ventures with foreign collaborations, and the need of venture capital funding.

The results and findings were based on the questionnaire sample given to these groups. The semi structured interview provided the base to reach out to the target group and have long discussions with them on what they thought would be the best way to create a business system which would suit the requirement of the e-commerce venture. The respondents have shared their thoughts and have given pertinent points as to how the business system needs to change, adapt itself with the new technology and have a planned structure of implementing the process step by step. They also voiced their concerns about the limitations the companies might have like the budgetary constraints involved in planning such a huge marketing venture, the globalization goals and the cost of achieving it. They also discussed the limitations and the problems faced by the company in entering a new market and the logistics involved in it. A total overhauling of the business system is required to market e-commerce to the different foreign markets. The identification of such a market is important as a lot of factors are involved in the choice of the target market. Another important finding was that there are many global customers who still do not like to share their bank or credit card information across the internet where they think that their security would be tampered with. These customers are wary of the fact that their confidential information would be misused. The organizations need to have proper instructions in the website that they are technically sound and fully secured to take any bank information in encrypted mode.

It is recommended from the discussions above that the business systems need to plan its e-commerce model from inception to the online sale and most importantly have an in-depth plan as to the execution of post sales support service mechanism. The companies need a customer centric approach in their e-commerce venture. The customer relationship is an important factor for retention of the customer base as well as builds a brand or company loyalty. A poor after sales service can undo all the good work done as customer satisfaction would be compromised. The organizations should be careful in their approach so that they do not lose the customer base. Instead they should focus on quality customer support, provide training to their staff, have cross cultural programs arranged to facilitate their interaction with foreign business partners and customers. The employees should be well aware of the cultural history of the country they are doing business with and have constant interactions with them. Communication is essential for establishing long-term relationships with customers all around the world. To achieve this the organizations need trained support staff to be available in the timings suitable for its overseas client to address issues, take actions on complaints and give an efficient pre and post sale services to its potential and existing customers. The website needs to have technical mechanisms like voice chats, video chats or simple text chats with customers to address their concerns and needs. An e-commerce website along with all its technical features needs to have these communication channels to streamline process and sales. Therefore it can be concluded that the impact of e-commerce on business systems is a huge one which requires careful planning, understanding the business models in which it will work and which one would be more suitable to the company, plan and execute the technical model keeping in mind the customer centric approach of the company.

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