By William J. Harding
No business or industry operates in a vacuum. A business of any type or size maintains relationships with other businesses. The efficiency with which one business creates and maintains these relationships can have a direct impact on the success of the business. One type of business relationship is the buying and selling of goods and services between businesses. And to be able to buy and sell electronically is one of the most important technological advances to improve the efficiency of business-to-business relations.
Electronic commerce can mean different things depending on your perspective of the business situation. In general, electronic commerce strives to improve the way business transactions are done using a variety of electronic devices. In the past, these electronic devices have typically been the telephone and fax machine. More recently, the use of computers and computer networks, including the Internet is increasing.
Electronic commerce can generally be divided into two distinct areas: business-to-business and business-to-customer. Some would argue that there is a third category, that of commerce within an enterprise business. Certainly there is also some overlap between business-to-business and business-to-customer when one business becomes the end customer of the goods or services of another business.
History shows that when organizations combine technological changes and the organizational restructuring to take advantage of the technology, large gains in productivity and even gains in market share can result. Business is conducted more efficiently. However, in order to take full advantage of the benefits that electronic commerce offers, organizations must be willing to change business practices, procedures, and processes. Also, it is not unusual that new business opportunities can be created.
Worldwide, businesses are changing the way they do business. With the rapid growth of technology, the emergence of global economy, and increasing use of the Internet as a viable and necessary part of business-to-business communication, the importance of forming new relationships with trading partners (suppliers and customers) while maintaining existing ones has become critical to remain competitive. Electronic commerce helps to improve customer interaction, improve business processes and procedures, and exchange information both within and between enterprise organizations.