E-business Services

E-business is a generic term defining business activities that are carried out totally, or in part, through electronic communications between distributed organizations and people. These activities are characterized by speed, flexibility, and constant change.

The Internet has become the vehicle for transforming business processes. The reasons for its ascendancy include the following:

• The Internet protocols are the only workable set of technologies that really provide a high degree of interoperability among different systems.

• The wide geographic reach of the Internet increases the size of any potential market.

• Internet economies make it feasible to distribute information and transact business globally.

• The introduction of the browser and its supporting technologies make the Internet much easier to use, thereby increasing the potential market.

There are many ways of segmenting and describing the large variety of services available through the Internet and the Web. A simple classification that covers most services is based on the relationship of the business to customers, business partners, and employees. For example, the process shown in Figure 1-1 describes a simple situation involving all three types of relationships: business to business (B2B), business to consumer (B2C), and business to employee (B2E). These segments are an easy way of organizing our thinking about services, although it's important to remember that business processes in the real world will have many variations and overlaps.

Figure 1-1. Business Relationships

The following sections discuss each relationship type in turn.

B2B

B2B services are a broad category that incorporates transactions among different businesses and government agencies. Many current B2B services, such as supply chain management and credit authorization, use the Internet to drive down the costs and delays associated with current processes and to boost their productivity.

B2B is rapidly broadening to include more than supply chain management and credit authorization. Functions such as shipping, billing, and Customer Relationship Management (CRM) are now often external to the business; other businesses provide and host these specialized services as a utility. For example, entry of a customer's order can result in more than the functions of pricing, authorizing, assembling, and shipping; a modern system might use B2B links to provide the customer with a shipment tracking number from the shipping company, and it might interact with an external CRM service to reflect the current purchases and other factors of the customer's profile. Meanwhile, the sales person might be indirectly using B2B links to handle her commissions and personnel data through outsourced employee management services, and engineering staff might use B2B links for collaborative design.

Thanks to the Web, B2B is rapidly transforming into an even more dynamic set of services from which an enterprise can select in real time. No one wants to be dependent on a single supplier or customer; everyone must deal with competitive pressures exerted from both sides. Services such as credit authorization and shipping are examples of those that can be selected in real time based on their performance or costs. Other services and supplies may be selected from web-based exchanges or e-markets.

B2B processes can be complex. They must follow the business requirements for tracking orders, negotiating contracts, arranging payments, and reporting outcomes that govern these processes when they take place without the automation of electronic communications.

Note that new benefits become available, although at the cost of additional complexity, when B2B replaces older systems. For example, organizations can change their business processes to increase their business effectiveness by obtaining real-time information on order volumes, revenue rates, cancelled orders, and other factors. This additional information, while adding to complexity, provides value in addition to the acceleration of the processes themselves by identifying further efficiencies.

Continuous monitoring of B2B suppliers, partners, and web infrastructure (communications, hosting, and exchanges) is necessary to determine whether they are meeting their service quality commitments.

As in conventional commerce, managing across organizations adds complexity. All the links in the B2B services chains are known, but these links are controlled by many different organizations, are complex, and may change rapidly as services are selected in real time. Managing B2B services therefore requires cooperation with the management teams of the other participants and, possibly, with third-party measurement organizations to assure true end-to-end service quality.

B2C

B2C garnered most of the early attention from the trade press and analysts as traditional businesses took advantage of the Internet's wide geographic reach and low costs for reaching customers. Some businesses (eBay and Amazon.com, for example) were founded to exploit this new market opportunity.

B2C sites continually add new services of their own while offering links to related businesses and services in an attempt to offer one-stop shoppingand sellingto their customers. This is a highly competitive segment with little customer loyalty. The wide selection of competing sites draws customers away whenever any one site has a service disruption.

B2C environments are characterized by a lack of visibility and management control of the customer-access infrastructure, which is the set of networks, caches, and other systems that consumers use to connect to the B2C site. Customers usually don't want measurement tools embedded in their systems, and the access infrastructure providers also resist making their internal performance readily visible. There is also limited visibility into the performance of partner sites (advertisers and other third parties), which are important parts of the customer's perception of total site performance. The span of control and management available to B2C sites is therefore usually limited to monitoring and managing their internal operations (inside the firewall) as well as measurement of Internet delays and performance as seen from various points on the edge of the Internet.

B2E

B2E services are also known as the intranet. These services help improve the internal effectiveness of an organization and help it keep pace with its customers and business partners. Many B2E services enable employees to query their benefits, schedule vacations, fill out expense reports, and conduct a set of activities that formerly required a large staff to coordinate.

B2C and B2E services use the web browser as the access device. Transactions are initiated from the browser to deliver information and activate a range of business processes. However, B2E environments are the only ones that enable administrators to have control of both endsthe servers as well as the desktops, cell phones, and personal communicators used to access them.