E-business (electronic business) is the conduct of business processes on the internet. Buying and selling goods and services, servicing clients, processing payments, controlling production control, cooperating with business partners, sharing information, performing automated staff services, and recruiting are just a few of the e-business operations available.
E-business can include a wide range of services and functions. They range from the creation of intranets and extranets to application service providers’ offering of e-services through the internet. Corporations are using e-business to acquire parts and supplies from other enterprises, work cooperatively on sales promotions, and undertake joint research as they continue to reimagine their businesses in terms of the internet—specifically, the internet’s availability, reach, and ever-changing possibilities.
In recent decades, the growth of e-business has resulted in new business requirements. On the customer side, customers want businesses to provide self-service choices for conducting transactions, tailored experiences, and quick, secure interactions.
New regulations and best practices for keeping electronic data secure have been enacted on the regulatory front. Companies have developed severe security measures and techniques, such as encryption and digital certificates, to safeguard against hackers, fraud, and theft as e-commerce has grown.
Cybersecurity has been engrained in e-business, with security incorporated into browsers and digital certificates now available for individuals and businesses from numerous suppliers providing cybersecurity solutions and technology.
That being said, the security of online commercial transactions remains a major concern for both consumers and businesses, despite the fact that this fear hasn’t hindered the expansion of e-commerce.
E-Business Model
When IBM launched a thematic campaign in October 1997 to address the misunderstanding many consumers had about internet-based enterprises, it was one of the first organisations to adopt the phrase e-business.
According to the company website, IBM spent over $500 million on an advertising and marketing campaign to highlight the value of the e-business model and to show that it has the “talent, the services and the products to help customers capture the benefits of this new way of doing business.” By 2000, IBM’s e-business revenue had grown to more than $88 billion from $64 billion in 1994, and net income had nearly tripled.
Types of E-Business Models
Business-to-Consumer (B2C):
Sellers offer items and services directly to consumers online, and buyers purchase them via the internet.
Business-to-Business (B2B):
Companies utilise the internet to conduct transactions with one another. Unlike B2C purchases, B2B transactions typically require many internet interactions at each stage of the supply chain.
Consumer-to-Business (C2B):
In this model, customers create their own value and demand for goods and services. C2B e-business models include reverse online auctions and airline ticket portals like Priceline.
Consumer-to-Consumer (C2C):
Consumers are both buyers and sellers through third-party-facilitated online marketplaces like eBay. These models generate revenue through personal ad costs, membership and subscription fees, and transaction fees.
Examples of E-Businesses
Older organisations that successfully transformed themselves for the digital age, as well as newer born-digital entities, are examples of e-businesses. The latter include companies that began operations after 1995 and have:
“Operating models and capabilities [that] are based on exploiting internet-era information and digital technologies as a core competency,”
- — Gartner
Amazon is the most well-known example of an e-business. As the world’s largest e-commerce platform and most profitable internet company, it has used its e-business model to disrupt industries from publishing to groceries.
Uber and Lyft are additional examples. They created platforms to match drivers with passengers, while Uber Eats, launched in 2014, shows how e-businesses can expand into new areas like food delivery.
Travel services like Expedia, Travelocity, and TripAdvisor are also e-business models. They let users research, plan, and book vacations based on personalized criteria like price, customer ratings, and location.
Finally, the Schindler Group, a Swiss elevator company founded in 1874, shows how a legacy business can adopt e-business strategies. Schindler uses IoT and other digital services to expand its offerings beyond elevators and escalators to include internet-enabled mobility services.
Advantages of E-Business
E-business has transformed the way businesses, non-profits, government agencies, and other organisations function, allowing them to boost productivity, cut expenses, and move more swiftly.
Electronic invoicing, automatic billing, and digital payment systems, for example, reduce the amount of time staff must dedicate to operations that were once handled manually by many organisations. Businesses can either reduce their headcount or move worker time to higher-value duties as a result of the time savings. Furthermore, such digital solutions shorten the period between billing and payment, boosting the company’s cash flow.
Electronic communication tools—such as email, video conferencing, and online collaboration platforms that incorporate social media dynamics—also boost productivity by reducing the time it takes for people to respond to enquiries. Whether it’s between employees, employees and external business partners, or employees and customers, this is true.
As a result of the enhanced speed, firms become more efficient and flexible to stakeholder needs and market expectations in general. Electronic communication platforms also save money by eliminating employee travel for collaboration purposes in some circumstances, while simultaneously fostering more open, collaborative cultures by making things simpler for staff in any position, in any department, and from anywhere to offer ideas.
Increased Reach and Accessibility
E-digital business’s technology can also extend an organization’s reach beyond its physical boundaries. Workers can work from home or other remote places, such as client sites, using cloud-based business tools.
Similarly, cloud-based software and the internet’s 24x7 availability enable commercial transactions to take place around the clock and around the world, allowing even solo practitioners and smaller companies to operate as global enterprises.
Efficiency Through Emerging Technologies
Multiple e-business duties—such as cataloguing information, searching stored data for insights, recording financial transactions, and connecting with customers with personalised messaging—have also benefited from digital systems, particularly emerging technologies such as machine learning and artificial intelligence.
More crucially, the advent of powerful e-commerce software and services has provided firms with new capabilities, such as email marketing, and opened up new sales channels, such as online storefronts.
New Business Models
E-commerce software has enabled the establishment of totally new business models, such as:
- eBay’s consumer-to-consumer and business-to-consumer sales capabilities
- Social networking sites like Facebook
- Shopify, an e-commerce platform that allows people to open online stores by providing the infrastructure and software needed to sell their own products
Types of E-Business
Most businesses now have some form of e-business capability to support their core competencies or peripheral operations. However, the quantity of e-business that takes place within a company varies.
Some businesses have limited e-commerce capabilities — for example, a small business that processes payments using a mobile payment service like Square but does not use any other digital services.
Companies whose business models are completely reliant on electronic and digital services are on the other end of the spectrum. Quicken Loans’ Rocket Mortgage, an online and mobile-friendly loan product, is an example of this type of e-business.
Even those firms that may be classed as e-commerce entities or fully powered e-businesses tend to be classified in traditional terms, despite the fact that they increasingly use digital services to support a variety of operations and capabilities.
B2B, B2C, C2C, and C2B are still used by business and digital authorities to categorise e-business. Some e-business classes, such as business-to-government and business-to-employee, are also available.
Challenges of E-Business
The extent and nature of electronic business challenges vary by organisation, depending on a variety of factors:
- Whether they use digital services to allow e-business in only parts of their operations
- Whether digital services power their core value proposition
- Whether they have legacy technology infrastructure or were born digital
However, there are several common challenges to be aware of. These include:
- Protecting e-business services from cyber-attacks
- Expanding services quickly enough to satisfy demand without sacrificing quality
- Keeping up with shifting market dynamics by rapidly upgrading technologies
- Recruiting and training workers who can keep up with continually changing skills
- Maintaining always-on e-business capabilities due to their electronic nature
Furthermore, many businesses struggle to transition from siloed e-business efforts within departments to integrated digital operations where all e-business components function together smoothly.
Security and Risks
While e-business offers advantages such as reaching a larger consumer base and faster transactions, it also presents several risks.
Customers are often required to provide sensitive information — like contact details and credit card numbers — during e-business transactions. This introduces serious data security risks, as such information is a prime target for hackers and data breaches.
E-business website operators must implement measures such as data encryption to ensure secure transactions. Failure to secure data can lead to:
- Regulatory fines
- Loss of consumer trust and loyalty
Additionally, because e-business success depends on fast, reliable transactions, companies must invest in trusted web hosting providers. Poor hosting can lead to:
- Website crashes
- Slow performance
- Customer dissatisfaction
These challenges can drive up the cost of maintaining a successful e-business.
Marketing Risks
Marketing also presents a risk in e-business. Unlike traditional marketing, online marketing requires different strategies. Without an effective digital marketing plan, businesses may invest heavily in campaigns that fail to generate traffic or conversions.
Systemic Risks
E-business is also subject to broader market risks. A key example is the dot-com crash of 2000–2001, which happened when many e-business start-ups went public or were acquired by other e-businesses. These companies often focused on growth at the expense of financial stability, and when the bubble burst, many were forced out of business.
E-Business vs. E-Commerce
E-commerce and e-business are related but not identical concepts.
- E-commerce refers specifically to the buying and selling of products online
- E-business includes a broader range of digital business processes, such as: (a). Supply chain management (b). Electronic order processing (c). Customer relationship management (CRM)
E-commerce is therefore a subcategory of e-business.
E-business processes can be:
- Handled in-house using the company's own network
- Outsourced to specialized third-party service providers
In contrast, e-commerce is more narrowly defined. For example:
“A customer places an order online and picks it up at a physical store — this counts as an e-commerce transaction.”
