E-Business Technologies

First Decade of Internet Technology Innovations for E-Business

The implementation of secure ways to transmit sensitive transactions and a standard for credit card processing were catalysts for the development of Web sites with direct sales capabilities. Similarly, the implementation of a digital signature capability was a catalyst for enabling secure business-to-business (B2B) transactions via the Internet by the year 2000.

Many businesses also have portals designed for their employees to provide Web access to the company’s intranet, which might include self-service applications to facilitate the collection of employee data for payroll and other HR systems. Some businesses have also established portals for business partners, which are accessed remotely using a URL separate from the company’s public Web site, to provide selective access to company information (called extranets).

By the beginning of this century, Web masters had gained experience designing and operating Web sites for public use.

Legal and Regulatory Environment

Tax Policies

Copyright Laws

Antitrust Laws

Privacy Issues

STRATEGIC E-BUSINESS OPPORTUNITIES (AND THREATS)

A well-established, pre-Internet framework for assessing a firm’s strategic opportunities and threats is Michael E. Porter’s competitive forces model.

Porter used this competitive forces model to make predictions about the commercial opportunities and threats to an industry from the perspective of a traditional brick-and-mortar company. Only three major e-business opportunities for traditional companies were identified:

1. the procurement of supplies via the Internet can increase a company’s power over its suppliers,

2. the size of a potential market can be greatly expanded (due to the national and global reach of the Internet), and

3. distribution channels between the traditional company and its customers can be eliminated.

However, in the same article Porter also identified a large number of e-business threats to the traditional company, including the following:

1. there is greater competition based on price because the Internet makes it more difficult to keep product or service offerings proprietary,

2. the widening of the geographic markets results in an increase in the number of competitors,

3. the Internet reduces or eliminates some traditional barriers, such as the need for an in-person sales force, and

4. customers have more bargaining power because they can see prices for the same or similar products by just looking at Web sites and can easily “switch” to a competitor.

B2B APPLICATIONS

B2B applications that leverage the Internet are not visible to the public in the same way that Web sites for B2C applications are. Prior to the Internet, many large companies had in proprietary EDI systems for electronic transmission of standard documents that used private networks.