Businesses continue to face challenges about how to effectively operate in order to provide customers with the needed goods and services, maintain or increase market share, and be profitable; thus enhancing shareholder value. The Internet has introduced a whole new dimension to the competitive landscape, as companies strive to discover how they can leverage the technology to better achieve their goals.

The Internet's use by companies varies widely, ranging from just providing product information online to actually selling products, receiving payments, and coordinating all transactions with the customers online. While the B2C arena was the first to experience the benefits of the technology, it has been projected that the monetary value of B2B transactions will by far surpass that of B2C transactions in coming years. Many companies are using the Internet to procure parts and services from other companies by using exchanges. Cost savings are realized from better prices (through auction and reverse auction arrangements) as well as due to reduced processing costs. It has created visibility both for buyers and sellers, making bargaining to be more efficient.

The impact and benefit of the Internet for commerce has been quite pervasive, not limited only to corporate entities, but extends to individual customers whom they deal with. The convenience it offers to customers, enabling them to procure products and services offered online, anytime, anywhere, continues to have significant impact on the growth of B2C e-commerce.

While it is true that the Internet has facilitated commerce in a number of areas, use of the Internet certainly does not obviate the need for firms to build their operations on sound business models that provide substantial value propositions. In some cases, the Internet lowers the barrier to entry into a business arena, thus engendering greater competition. The failure of many dot-com companies in recent years shows that firms intending to use the Internet for business need to have a properly articulated agenda.

Operations have a tremendous impact on successful e-commerce implementations in all facets. While some of these are common to brick-and-mortar frameworks, the peculiarities of e-commerce introduce new challenges for operations and the operations manager. These include quality management, especially as it pertains to developing capabilities to meet the e-fulfillment challenge. These have implications for the management of inventory as well as capacity. In the B2B area, it is important to develop frameworks that facilitate operation of supply chains to increase its effectiveness in responding to firms' needs, especially in complex networks such as applies in the automotive industry. As some of these issues are complex in form, a cross-functional approach is necessary to address them.

One critical area that has negatively impacted the use of the Internet for purchases has to do with concerns about security, as payments, especially in B2C transactions, have to be made by providing credit card information online. Also, safety of a company's system from cyber-attacks is another major area of concern. As cryptography technology improves, hardware and software solutions to these problems will increasingly become available. In addition to keeping abreast of these developments and making appropriate investments, managers need to develop and maintain a security policy for their organizations, train personnel, and provide backups and alternate systems in the event of a system failure. This latter action will reduce losses arising from system downtime.

The revolution that the Internet has created in commerce continues to spread as people all around the world embrace it. The many challenges it poses to businesses and the numerous benefits that it provides companies and individuals will make its impact far-reaching and much greater than can be imagined. It will no doubt continue to serve as a potent competitive weapon in the arsenal of intelligent enterprises throughout the present millennium.

Intelligent Enterprises of the 21st Century
Intelligent Enterprises of the 21st Century
ISBN: 1591401607
EAN: 2147483647
Year: 2003
Pages: 195 © 2008-2017.
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