The Many Flavors of E-Commerce
The term e-commerce is really a "catch-all"
phrase that encompasses many concepts. To help you better understand,
presented below is my over-simplistic definition of e-commerce.
According to Dictionary.COM, the term commerce is defined as follows:
"The buying and selling of goods, especially on a large scale, as
between cities or nations". This definition is straight forward and
easy to understand. From here, we add the "e" for "electronic", and we
derive the definition: "buying and selling of goods electronically".
This typically means that orders and payments pass electronically.
However, there is more to this - much more, as follows:
B2B (Business-to-Business) E-Commerce
really refers to supply chain technology, which is by far
the largest and most successful e-commerce technology employed today.
You can read my Insights about
B2B E-commerce here.
B2C (Business to Consumer) E-Commerce
refers to the selling and buying of goods and services via the web from
web retailers to web customers. This really is the same thing as B2B
E-Commerce with one key exception. With B2B implementations, the parties
are "Trusted Business Partners" who have an established working
relationship. With B2C E-Commerce, the retailers is often selling to
unknown, un-trusted strangers. Therefore extra effort must be made to
capture customer and payment information. Further, this data is
typically verified before orders are fulfilled. In this respect, B2C is
a tougher solution to provide than B2B. However, B2C almost always
involves a customer typing information into an order screen, there is no
need to link together two complex accounting systems. In this respect,
B2B is a much tougher solution to deliver.
B2E (Business to Employee) E-Commerce
generally refers to the requisitioning of supplies by
employees for use in their jobs, but this really has grown to encompass
much more. For example, B2E makes it very easy for an employee to
requisition a new toner cartridge and printer paper - the order is
entirely electronic, and supervisors are asked to approved the
requisition in the event that the total order exceeds preset limits for
that particular employee. However, B2E has grown into technologies that
allow the employee to access their employee records to update address
information, shift investments in the 401K plan, or maintain their
internal resume. Many companies have found that B2E technologies have
dramatically reduced the administrative burdens with the human resources
department. Admittedly, maintaining employee information has little to
do with commerce, but this term has grown to encapsulate this activity
into the B2E definition.
C2C (Consumer to Consumer) E-Commerce
has also emerged that allows unknown, un-trusted parties
to sell goods and services to one-another. An excellent example of this
is found at Ebay, where consumers sell
their goods and services to other consumers. To accommodate this
activity, several technologies have emerged. Firstly, Ebay allows all
sellers and buyers to rate one another. In this manner, future
prospective purchasers may see that a particular seller has sold to more
than 2,000 customers - all of whom rate the seller as excellent. In
another example, a prospective purchaser may see a seller who has
previously sold only 4 times and all 4 rate the seller poorly. This type
of information is helpful. Another technology that has emerged to
support C2C activities is that of the payment intermediary.
Pay Pal is a good example of this.
Instead of purchasing items directly from an unknown, un-trusted seller,
the buyer can instead send the money to Pay Pal. From there, Pay Pal
notifies the seller that they will hold the money for them until the
goods have been shipped and accepted by the buyer.
B2M (Business to Machines) E-Commerce
is a fast emerging area within e-commerce. The general idea is that
companies can link to remote machines via the internet. Here is an
example. Assume that you drive a truck for Coca Cola and that it is your
job is to refill Coke machines throughout your community. You stop at a
high rise building that contains a Coke machine on every floor - now
what? Do you leave the drinks behind and visit every Coke machine first
to determine how many of which brands are needed? Do you carry cases of
drinks with you as you go? With B2M technology, the folks at Coke know
exactly how many drinks are in each machine by type of drink, and their
accounting system produces a restocking report advising the driver
accordingly. In this manner, Coca Cola can monitor their machines from
afar to determine if they need repair or restocking. This information
is then used to schedule efficient delivery routes that allows you to
restock the appropriate Coke machines just in time before the inventory
another example, consider the $5 billion Ryder Truck Company - Ryder
System Inc. When a truck rolls into one of the company's maintenance
bays, the attendant need only push a button to instantly determine the
status of that vehicle. Specifically, a technician simply touches a
probe on the end of a handheld computer to a coin-shaped disk on the
truck's cab that has been busy gathering information on engine
performance and fuel consumption from electronic sensors under the hood.
All told, these sensors track information related to 65 different
aspects of the truck to oil life, tire wear, filter life, gas mileage,
and much more. Prior to the introduction of this B2M system in the early
nineties, the company's mechanics were wrong almost 50% of the time when
it came to identifying problems with the trucks. Now the sources of
trouble are identified more quickly and a truck's downtime is often cut
in half. The company manages almost 10,000 technicians and 175,000
trucks, but with the B2M system, inventory tracking, parts ordering,
maintenance scheduling, and personnel scheduling are streamlined.
Additionally, Ryder uses the information it collects on engine-part wear
to negotiate longer warranties from suppliers. According to Chief
Information Officer Dennis M. Klinger, the new system cost $33 million
but reportedly paid for itself in just a few years.
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