Although it may seem like a new word, the term e-business was hatched back in 1997, making it no spring chicken. Considering the fact that it describes an entirely new way of conducting business, however, it is safe to say that it’s still in its early stages of use. With every turn of the page you’ll see the term defined in a different way, shape or form. Perhaps this is because it describes such a large scope of processes, ranging from sending out a newsletter to selling an Audi online. So, what exactly is e-business and what does it mean to the future of a business owner?
The United States Census Bureau defines e-business as “any process that a business organization conducts over a computer mediated network. Business organizations include any for profit, governmental, non-profit entity. Their processes include production-, customer-, and internal or management-focused business processes.” In a shorter broader sense, e-business is the process of conducting business electronically or over the internet. Electronic mail is e-mail, electronic commerce is e-commerce, and following this formula, electronic business is e-business. Every time business is conducted over the internet, e-business takes place and as the internet grows, so grows e-business.
Where Does E-Business Take Place?
E-business is offered to all users via the internet, to internal users via an intranet (similar to the internet, an intranet is a smaller network of computers usually within a single organization), and to specified users via an extranet (an intranet partially accessible to specified users from outside an organization via a valid username and password).
Three Main Types of E-Business
1. Business to Consumer (B2C)
The most widely recognized form of e-business, B2C is the exchange of information, products or services taking place between a business and a consumer over the internet. As the internet develops, B2C is continually changing the way consumers acquire information, the way products are compared against one another and the way in which they are purchased.
An example of a B2C only site is amazon.com. Ae.com is an example of a B2C site housing a physical location as well.
2. Business to Business (B2B)
The largest form of e-business in terms of money spent is B2B. Business-to-business allows trading to take place between businesses, using a low-cost sales channel for the sale of goods and services and is responsible for constantly changing corporate buying habits.
An example of a B2B site would be a car part company selling parts to a car dealership, another company, rather than directly to consumers.
3. Business to Government (B2G)
B2G is the online exchange of information and transactions between businesses and government agencies, also known as e-government. B2G allows government agencies and businesses to use electronic means to conduct business and interact with each other over the internet.
An example of a B2G site would be one that offers electronic tax filing.
E-Commerce and its Relation to E-Business
The United States Census Bureau defines e-commerce as “any transaction completed over a computer mediated network that involves the transfer of ownership or rights to use goods and services. Transactions occur within selected e-business processes (eg. selling process) and are ‘completed’ when agreement is reached between buyer and seller to transfer ownership or rights to use goods or services.” So while e-business covers the entire range of online business dealings (from customer service to selling), e-commerce refers specifically to one entity paying for goods or services from another entity via the internet. With this in mind, remember that e-commerce can relate to all types of e-business involved in the transfer of goods or services, including but not limited to B2C, B2B and B2G.