E-Business and E-Commerce – The Difference

Business is an issue that covers diverse functional areas such as finance, administration, buying, selling, production, human resources, shipping, communication, marketing etc. Advances in science have made it possible to apply Information and Communication Technology (ICT) in these functional areas to operate business. This is what e-business is all about. It is the operation of the diverse business functional areas through the use of internet technologies.

I mentioned buying and selling functions while citing examples of the functional areas of a business. These two areas are technically and jointly referred to as commerce in business. E-commerce is buying and selling on internet. You can see that it is just one component of e-business.

ICT driven business is e-business and e-commerce is no doubt an integral part of it. The concept of ICT is diverse with internet and software inclusive. Basically, to practice e-business and by extension e-commerce, you need:

  1. Internet or intranet.
  2. Web-based software package.

E-business as practiced by industry giants employs the use of web-based integrated and multi-functional business software to carry out their business. A popular example is Systems, Applications and Product (SAP) software. The software is able to integrate operational functions of an enterprise, that is manufacturing right through to product dispatch. Organizations that have implemented the software have enjoyed tremendous benefits such as:

  1. Quick access to information across the globe.
  2. Speeding up financial reporting.
  3. Improved efficiencies through reduction in operational costs.
  4. Prevention of high inventories through quick access to sales reports and demand forecast over web.
  5. Increased profit because of high productivity.

Dream Works SKG, for example, uses an intranet to check the daily status of projects, including animation objects to coordinate movie scenes. In the area of training, some companies use full-motion video conferencing to train and develop staff in distant locations on various areas of their jobs. By linking up electronically with its retail partners over the net, Nestle can monitor inventory levels in supermarkets and cut production fast accordingly.

E-commerce specialized software is also available. They are developed without integrating them into an e-business software. They are designed primarily to perform only the buying and selling functions on the net. These are e-commerce web sites and they have the following basic features:

  1. E-payment.
  2. Product cataloguing.
  3. Tracking delivery.
  4. Shopping cart.

The shopping cart containing all the items you purchased and the total amount of your purchase is integrated with an e-payment system. A typical e-payment system makes use of credit cards for payment. There are three main services for credit card payment online:

  1. Merchant account- A special account that permits the acceptance of credit cards alone.
  2. Gateway- The mechanism that transfers your customer’s credit card details to the processes so that you get paid.
  3. Secured payment form- A form on the Merchant Service Provider secured site that contains the total amount you are paying, your credit card details and your personal information, all for submission.

All have to be set up for the e-commerce site and they can be set up by a third party credit card processing company on net. I do hope you can make a clear-cut distinction now between e-business and e-commerce concepts.

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