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Impact Of E-Commerce Technologies On Business Practices Report

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Updated: Apr 5th, 2019

Abstract

The invention of electronic mail saw the possibility that much of the pillars of the economy could be affected as well. Electronic commerce is one of them, its adoption in the business sectors has consequentially influenced the daily operations of the businesses today and its impact in the business world has brought about both positive and negative influences.

Hence, this work is geared towards unveiling some of the positive and negative impacts that e-commerce has brought about in daily business operations.

Investigation was carried in the current business world to find out to what extent e-commerce has been adopted in the business world and if so what are the advantages and disadvantages that has come with its adoption and this could only be found out not only by interacting with the system but inquiring the same from the personnel who have had an experience with e-commerce transactions.

The hypothesis was proved right that indeed most businesses are currently carrying out their transactions online and only a few are remaining but affirmed that they are following suite soon. Although most of them complained of the adverse consequences come up with its adoption, the cost benefit advantage from its advantage it’s worth it and try to cope with the disadvantages.

E-commerce has a lot of positive impact in the business world than negative although the negative challenges posed tend to derail the process of its adoption.

Introduction

The effects of ICT have influenced the business world more than any other economic pillar, most businesses the internet and the web has grown as an important part of the business and acts as a medium to achieving various objectives such as reduced expenditure costs, rising value chain competence, enhancing public relations, marketing of information and ideas, enhancing the strength of brand in the market, and also generating revenue.

As e-commerce increases its influence in the market, this research seeks to study some of the e-commerce practices and discusses how e-commerce has influenced the normal operation of the business both positively and negatively, and why most businesses have opted for e-commerce transactions. In other words look at the current e-commerce practices and its influences on the business operations. Some of the areas that will be tackled in this paper are:

  1. Evaluate and safeguard of clientele lifetime value
  2. Capitalize on constancy on customers and conviction
  3. Enhancing on customer public relation
  4. Get personal with the customers
  5. Symmetry of online and human relations
  6. Enhancement of effective communication
  7. Online platform maintenance
  8. Keep-up with penalties, imbursement trends
  9. Invest in clientele services
  10. Application of customer relationship management tools to ensure achievements of the above

And all these are geared towards understanding the influence of e-commerce in the major areas in the business world that is:

  1. Direct marketing, selling and offering services
  2. Online caching and billing
  3. Secure circulation of information
  4. Value-chain trading and commercial procurement

And to be able to understand the major effects of e-commerce in the business world, a comparison between the traditional commercial operation and the current will be essential to significantly understand to what extent e-commerce has influenced the corporate world and what are some of the costs that are coming with it.

Literature Review

The invention of e-commerce or internet-based e-commerce tender a substantial prospect for most of the corporate institutions to enhance their market coverage, enhance the production of new services and reduction in expenditure.

Although the associated problems in e-commerce have also brought about difficulties in determining the phenomenon influence in the corporate world although available sources of information indicate that both small and medium sized enterprises are embracing e-commerce to boost their organizational practices.

Despite the adoption of information communication technologies (ICT), the most significant issue is the cost benefits derived from the adoption. Although most corporate businesses have increasingly adopted ICT for various commercial and production-related purposes, most of them are limited in knowledge of the full range of benefits that can be derived from it hence, the challenges associated with its adoption and maintenance faced by many corporate institutions.

E-commerce is an important apprehension in the business world, this is because important competence gains are related with the adoption of e-commerce i.e. reduction in the expenditure cost and business practices.

To accumulate from the static gains, enterprises may adopt internet based transaction to increase supplementary values i.e. through the fabrication on new products, embracing new novel business practices, or changing the means by which they use to reach the market.

But to be able to appreciate these dynamic changes largely depend on the way in which the corporate world has adopted the e-commerce in the normal function of their businesses which is a significant venture in both the local and international fronts of market exploitations.

According to internet start-ups invent alternative approaches of commencing value-added, new services and new business practices. Majorly most of the business enterprises engage in e-commerce because they aim at expanding on their enterprise operations and competence.

Most of the enterprises that find the adoption of the internet-based transaction costly for them enter into a jointly electronic partnership with already established firms with an aim of expanding their market coverage in terms of supplies and consumer reach. This majorly enhances the smaller enterprises competitive reach if the e-commerce is used proactively as part of processes in increasing its level of competence in the international market.

Most of the states leaderships have experienced and observed the significance of embracing ICT technology in their market economy both to improve their local and international targets in terms of service delivery and new ventures e.g. the internet’s prospective for innovations, restructure production process, and collocation of geographically dispersed operations in terms of banking.

This has been done through the introduction and implementation of policies that are aimed at improving the environment of e-commerce operation by facilitating it intensification and use.

Although it is evident that there is a large disparity between small and large enterprises in terms of the [policies implemented, in that not each and every commercial enterprise is in a position full adopt and implement the e-commerce to advance in its competitive advantage this derails the process of exploiting the e-commerce opportunity for small enterprises.

For example the initial cost of installation that constitutes the cost of infrastructure, the functionality of e-commerce in different platforms i.e. information dissemination, training, the required qualified personnel and human resource capacity. Also after implementation to be able to gain that trust from the target market, data security and confidentiality and also the dynamically changing e-commerce environment, which makes the already established firms in the market in a competitive advantage from those developing firms.

Impact of e-commerce on business practices

Positive

Evaluate and safeguard of clientele lifetime value

Most of the enterprises that have embraced e-commerce technology in their operations have benefited by increasing some value in their relationships with customers. In other words through the e-commerce, the companies are exploiting by understanding what are the needs of the customers and offer the same electronically.

This is because most of the companies who do not carry out a need survey and provide their customers with the actual service they are in need of will definitely lose their customers to their competitors (Geller, 2002, p. 23).

The rate of increasing customer outreach is estimated to be five to eight times greater as compared to retaining an existing consumer. Contented consumers are liable to repurchase (Ross, 2005). Thus most of the enterprises should consider their customers as one the valuable assets to sustain the business and its indispensable potential of these assets.

Hence, through e-commerce the enterprise is in a position to collect and study considerable characteristics of customers that are unique in e-commerce exploitation, and be able to develop other forms of data that can be used to aid in the provision of appropriate services and products to e-consumers.

Thus through e-commerce these features can be embraced and implemented through personalized bounce back offers and personalized e-mails for consumers which are likely to offer updates in terms of information updates, notification of new products or reminders.

Capitalization on customer constancy and conviction

Loyalty and customer convictions are key component in establishing customer relationships (Bressler, 2001). Hence to be able to establish these, e-commerce enterprises must be able to depict to the customer that his/her position is essential in the enterprises’ operation i.e. the provision of forums through which the consumers are able to air their issues and take them seriously which enables them to improve on their services and products.

Thus through e-commerce the provision of opportunities that goes beyond sales services are key to gaining loyalty and trust. This prospect has been embraced by many e-commerce companies and are benefiting from these. And this can be determined by the number of hits that a website has in quality of consumers and their purchasing authority.

“Since price sensitivity may not be the governing factor that describes how customer chooses to make purchase other factors such as security and trust as well as service quality attributes, such as speed and convenience, could be incorporated into the e-retailer’s e-CRM strategy” (Lee-Kelley et al., 2003, p. 248).

And strategies used in e-commerce include after sale services e.g. software updates and upgrades, efficient online content, purchase incentives and vouchers, revolutionary technology, package tracking etc. also the defense of customer service concerns such as credit card deceits.

Enhancing on customer public relation

An e-commerce won’t be able to improve on the relationship between the business and the customer unless they have some ideas about the consumers of their products and services. That is by having knowledge on the customer’s needs, purchasing practices, enticements, and behavior.

E.g. easy functionality of the web site of the company, low prices, after sale service, offering call services etc these are some of the factors that are likely to contribute more enhancing customer enterprise relation. A good example is that e-commerce has a competitive advantage when it comes to peak times such as back to school. This means that through e-commerce online purchases and after sales services enables the current business practices to be able to get the products and acquire services from home and get them there.

Get personal with the customers

Through the data collected when a customer subscribes to a particular website online, there is some intimacy developed with the customer. This is unlike the traditional retailing system that only customers had the contact with the business at the point of purchasing.

Based on the data collected the customer will be able to get updates from the e-commerce company and also customizing of the information displayed on the website to be able to seduce the customer. Also the employment of choice boards which gives an option of customizing their needs which enhances customer satisfaction from the website. This gives the company a leeway of choosing what to exhibit to the customer and how to put it on show.

Symmetry of online and human relations

Besides market coverage advantage brought about by e-commerce, the interaction with the consumers is also an issue that has been impacted by the adoption of the e-commerce.

This is through the linkages between all the departments in the companies through the online business to present a uniform surface. E.g. the amount deducted after presentation of consumer’s credit card should be based on the price charged at the point of transaction i.e. display uniformity from all fronts (Verity, 2005).

This enhances the cross-channel purchasing actions undertaken by the consumers. This is a method which has been adopted by most of the e-commerce companies through linking most of their online transaction with the offline one.

This choice board channel has hence demanded from the e-commerce enterprises to carry out a customer survey that seeks to understand who their customers are and their nature of interaction both online and physical interaction in the store.

Enhancement of effective communication

The adoption of e-commerce has seen most enterprises cost benefit from the inexpensive way of communicating to people which is immediate, first-hand and economical both to the enterprise and to the consumer. This has enhanced the transactions between the consumers and the enterprises influencing the growth and adoption of e-commerce across the global network.

The communication details presented to the customers are always precise and relevant to them based on the collected information from the consumers. It may seem a bit simpler for the consumer when subscribing but, the e-commerce company personnel carry out a very effective CRM responsibilities to be able to market themselves. A good example is the Amazon.

Through communication also the e-commerce or enterprises are able to market themselves and create awareness about their products and services, based on their website visitors, collection of visitors’ data, responses, and purchase intent.

Online platform maintenance

The traditional way ensuring that customers are retained is also a common practice that has been developed by the web platform vendors. Hence, for them to be able to retain potential purchasers to their website, they have to maintain their websites and be reliable online retailers. Its maintenance is also aimed at it smooth running and effective performance of its core functions.

This is because most of the online visitors always judge the reliability of the site once they have experienced problems with it they are likely to sort other avenues which are competent or go offline. Consumers prefer websites with effective feedback mechanism and easy transaction. Hence, to be able to retain the customers through the maintenance of the e-commerce, e-commerce retailers have tried to adhere to the following:

  1. Frequent updates which are not usually done in the traditional platform
  2. Attractive homepage which to some extent depict the reputation of the company.
  3. Simple websites e.g. avoiding of a lot of graphics which are likely to influence the speed of loading.
  4. Ease of company, consumer interaction e.g. the provision of live chatting or e-mailing system for easy contact reach.
  5. Reliable feedback mechanism e.g. answering back to customers query.
  6. Easy order form that is easy to use and pay.
  7. Create an informative website that has detailed information to consumers.
  8. Have a follow-up mechanism to ensure that the customers are satisfied of the services offered to them both online and offline.

Hence, by the achievement of the above, the maintenance of the website will definitely cost benefit the company as it has been experienced in the e-commerce environment.

Keep-up with penalties, imbursement trends

Based on the competitive nature of the e-commerce, most of the e-vendors are keener on the impact of internet on the industry layout. Hence, from the traditional stock exchange rate, e-commerce has provided a platform where companies have adopted strategies that give them gain competitive advantage over enterprises.

E-commerce has also influenced the trends of operations of businesses since most of the enterprises does not only view the way to lure customers as price only but has also incorporated strategies such as offering coupons, convenient websites, and the variety of products offered for the customers (Pombriant).

Though, price cannot be ignored in the competitive market, failure to incorporate other factors in the e-commerce platform is likely to increase the elasticity of consumers to other interested vendors. Hence, incorporation of the price enables the e-vendors to be able to study the clientele behavior and are able to determine with much ease the behavior of others competitors.

Invest in clientele services

With the inversion of e-commerce into the market economy, the major issue is on how to entice the customers’ attention to purchase the e-products. This has shifted the market operation to a more consumer oriented services, where to make profit the e-commerce vendors need not to lure potential buyers who are likely to purchase their products and services.

The investments have shifted towards customer satisfaction besides other essential factors to achieve business aims and objectives. Some of the customer oriented technologies are the call delivery, interactive voice reaction, PC telephone incorporation, information management systems, etc all geared towards packaging, delivery, public relations and customer service (Croteau, 2003, p. 22).

This is in contrast with the former ideology where enterprises considered customer service utility as an expense venture and non profitable (Ross, 2005, p. 44).

Although if the goals of an enterprise towards customer relations does not go as planned consequentially it can lead to drastic failure for the enterprise i.e. customer dissatisfaction is likely to occur if the customer service does not fulfill its purpose.

Application of customer relationship management tools to ensure achievements of the above

With the introduction of World Wide Web, internet inventions have continued to advance giving companies more ways to communicate with the consumers and improve on their value added services to consumers.

This has seen the progress of e-commerce sales and market from the adoption of the e-mail communication systems to database management systems. Hence, the introduction of CRM which is geared towards customer satisfaction, devotion through a more reliable customer service to each potential customer and a more knowledgeable customer needs and purchasing behavior.

Negative

The comparison between the traditional offline business transaction and the e-commerce business transactions indicate that despite the adoption of e-commerce as major prospects in maximization of profit through larger market reach, offline business transaction is still there to stay.

This is because despite the influence brought about by the internet and the www, offline business transaction is still preferred and more secure, the low market reach or the personal communication with the real vendor has made most of the consumers more addicted to the offline transaction mode. Hence, online e-commerce transaction has come with it some challenges that are facing the corporate world:

Insecurity

Most if the online product consumers are not likely to use or conduct a transaction in an insecure website. Also as per the requirement of the online vending, e-commerce presents a more insecure information dissemination which has not been adopted by most of the consumers. This is because not all consumers will easily agree to give out his personal details to an online form before being assured of his/her security and the information being given.

Also trust issue is a problem in the use of e-commerce business transaction; this has caused a division in the business world with some enterprises ideologically refusing to devolve in the e-commerce assuming that e-commerce will never surpass the offline business transaction. Hence, this has created a competitive advantage to some enterprises that have adopted, secured and gained the devotion needed from its consumers and still acquiring others.

Cost

Most of the enterprises and the competitive nature of the business world rush to adopt the e-commerce business transaction not knowing what they are devolving into, this has left most of the business enterprises counting losses than cost benefit gains brought about by the adoption of the e-commerce.

Hence, a part from the anxiety of its has brought fear in the business world on its adoption with security issue and the initial and maintenance cost deterring businesses from adopting it.

Impact of the digital society and information development

Information technology has great on organizations and individual lives. That is it has transformed our lives socially, politically and economically.

Political

Information technology has reduced the distance between various territorial boundaries countries and even the distance from continent to continent. Several years ago transportation means from even one continent to another continent was a nightmare due to the introduction of digital aircrafts and electric trains, we have experienced the death of distance.

Economical

Development of information technology has led to the introduction of commerce (e-commerce/business) that is online business of which has necessitated global market penetration hence transforming on living standards.

Social

Information technology has created a social network where individuals are now able to communicate and share their ideas. It has also led to the creation of social ethnics/norms among individuals and organizations.

Conclusion

The introduction of e-commerce is evident that most of the enterprises have enhanced and increased in terms of effectiveness in business operation that is in Direct marketing, selling and offering services, online caching and billing, secure circulation of information, value-chain trading and commercial procurement which have seen most businesses enhancing their operation to increase their competitive advantage.

This paper trying to inquire to what extent e-commerce has impacted on the normal business operations of the business economy most of the sectors such as the above mentioned have seen drastic changes in order to cope with the e-commerce requirements. This has contributed much to the economy in terms of consumer/customer benefits, businesses itself and the society at large.

The literature in this document has identified that most of the attention has shifted to the consumer population to be able to make profit and sustain the business i.e. consumers have benefited in that ease of accessibility of goods, good customer relations from the enterprises, price advantage, quality of products and services etc.

The businesses with the adoption of ICT in their normal operations, they have derived cost benefits advantages such as larger market reach, increased profit, reduced cost of operation and this has also been reflected to the society at large since most of the benefits derived from that we see them get reflected in the society in terms of increased investment, high living standards etc. and this has been achieved by most business because of the implementation of Application of customer relationship management tools to ensure achievements of the above i.e. investment in clientele services, keeping up with penalties, imbursement and trends, online platform maintenance, enhancement of effective communication, symmetry of online and human relations, get personal with the customers, enhancing on customer public relation, capitalization on customer constancy and conviction, evaluate and safeguard of clientele lifetime value.

Although apart from the implementation of the above the challenges posed by the adoption of e-commerce by most enterprises have seen them lose. The weakest points of e-commerce are the expenditures that come with its adoption and the security concerns that have been raised by its beneficiaries. Though most of the gaps present in the business economy have been filled, security concern has also seen most of the enterprises not fully benefiting from the adoption of e-commerce.

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