1.1.1 The difference between eBusiness and eCommerce

Electronic commerce or "eCommerce" covers the range of on-line business activities for products and services, both business-to-business and business-to-consumer, through the Internet. eCommerce breaks into two components:

• Online Shopping - the scope of information and activities that provides the customer with the information they need to conduct business with you and make an informed buying decision.
• Online Purchasing - the technology infrastructure for the exchange of data and the purchase of a product over the Internet. Online purchasing is a metaphor used in business-to-business eCommerce for providing customers with an online method of placing an order, submitting a purchase order, or requesting a quote.

When you review information on products or services on the Internet, you are carrying out online shopping. While online shopping you may find a product you want to purchase, you place it in an online shopping cart. When you are done shopping and are ready to buy, you click a purchase button. You are then moved to a secure location to carry out online purchasing on the product. To complete the transaction, you need to supply your shipping address and credit card number. These are the fundamental processes of online shopping and online purchasing. These processes are the actions that are referred to as eCommerce.

eBusiness is a super-set of eCommerce. One component of transitioning your company from a traditional business to an eBusiness is when you incorporate eCommerce into your company's flow. For example, when your sales and fulfillment organizations can handle web-based purchases equivalently to telephone and mail purchases, you have started the transition to eBusiness.

Your web site may have other activates outside of eCommerce. Most web sites, just like most brick and mortar shopping malls, have activities other then eCommerce. For example, when you go to your local shopping mall at Christmas you may find a Santa Claus. The mall provides the Santa Claus as an activity that drives customer traffic. The Santa Claus does not directly support shopping or help customers purchase items at any of the stores, however it helps the general sales environment for the mall. Similarly, you will have shopping activities on your web site, e.g., product specifications, customer testimonials, and product reviews. You may also have purchasing activities on your site, e.g., order forms, shopping carts, and credit card processing. To draw customers to your site you may include promotional activities, e.g., eLearning courses, entries for a raffle, discussion groups, or an advice columns. "eCommerce" refers to the activities on your web site including online shopping and online purchasing.

Many companies have an eCommerce site but are not yet an eBusiness. eCommerce is the online selling component of a web site. eBusiness is the integration of a company's activities including products, procedures, and services with the Internet. You turn your company from a business into an eBusiness when you integrate your sales, marketing, accounting, manufacturing, and operations with your web site activities. An eBusiness uses the Internet as fully integrated channel for all business activities.

The following is an example of a company that has not yet become an eBusiness: You visit a retailer's web site and buy a shirt. When the shirt arrives it is in the wrong size. You decide to return the shirt at the store's retail outlet instead of mailing it back to the vendor. However, when you go to the store you are told that they cannot take returns from their web site. Since the web site is not integrated with the rest of their business activities this company is not yet an eBusiness. If the company had integrated their web site with their stores by providing access to their web site from within the store, by accepting exchanges for sales made online, and by training their people to support customers from/with their web site, they would be an eBusiness. eBusinesses do not consider the web site as a separate activity from their core businesses: The web site is integral to all activities at an eBusiness.

Companies who are performing Businesses to Business activities become eBusinesses when they integrate standard activities with their web site. A salesperson considers their web site a sales tool. When talking to a customer the sales person takes the customer to their web site to give product presentations, provides the customer with virtual tours of the newest products, or shows the customer how to use a tool that the customer can use to configure their products. The Marketing Department releases products on the website first, providing online product presentations, eLearning courses, and brochures. Customer Support uses the web site to host FAQ (Frequently Asked Questions), support chat lines, and moderate newsgroups. Purchasing uses the web to obtain prices on necessary components and place orders, and Shipping uses the web to schedule deliveries and notify customers of product arrival. Within an eBusiness every department within the company treats the web as an important tool they can use to move business ahead.

Is your company a business or an eBusiness? Most companies go through the following series of phases as they evolve from a business to an eBusiness.

• Phase 0: A company doesn't understand how they can take advantage of the Internet.
• Phase 1: An outside company is hired to create a web site. The web site is static, containing little more than an on-line brochure. Employees rarely reference the site or update it with the latest information.
• Phase 2: The Company decides to integrate eCommerce on the site. Someone within the company is charged with placing product catalog on-line. Salespeople consider the web site a threat - not an integral tool to conduct business.
• Phase 3: Everyone's internal Power Point presentations include Web Site initiatives. None of these initiatives have been executed.
• Phase 4. The company starts implementing initiatives. The web site responsibility moves in-house and is assigned to an important member of the Senior Staff.
• Phase 5: The web site becomes important to All of Senior Staff. Initiatives are implemented; employees are focused on using the web to conduct business. The company is becoming an eBusiness.

What Phase is your company at?