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E-business | Advantages and Disadvantages

E-business | Advantages and Disadvantages



E-business deals with buying and selling of information, products and services through the computer network. E-business is also defined as a business activity which uses an electronic medium. It also refers to the buying or selling of goods and services without visiting a store. E-business involves activities , such as delivery of information, product, services and payment through the electronic medium. In addition, e-business refers to paperers business activites, such as supply chain management, enterprise resource planning, customer relationship management, and knowledge management.


Origin of e-business


In the 1960s, businesses that enagaged in the large volumes of transactions had begun exchanging transaction information on punched cards or magnetic tapes. Data communications technology eventually allowed trading partners to transfer data over telephone lines, instead of shipping punched cards or magnetic tapes to each other in advance.

Although these information transfer agreements between trading partners increased efficiency and reduced errors, it was still not an ideal solution. Only large trading partner could afford to participate in the benefits of these paper-free exchanges, becauses the translation programs that one trading partner established, generally would not work for other trading partners.

During the 1970s , the introduction of electronic data interchanges(EDI) between banks over a secured private network changed the financial market. In 1973, the ANSI committee developed a uniform EDI standard. This committee and its subcommittees included experts from the information technology background from over 800 organizations. During  the late 1970s and early 1980s,  became widespread widespread within companies in the form of electronic messaging technologies, i.e.,EDI and e-mail



Advantages of e-business

  1. All-time processing: Customers can use the marketplace at all times with the use of e-business services.

  2. Better services: Customers are fully satisfied and receive better service.
  3. Removing mediator: Customers can directly contact the suppliers and remove all mediators.
  4. Data on consumer performance: Using the e-business services, one can understand consumer behavior, for example, websites, products, schemes and modes of payment which are preferred by the customer.
  5. Time saving: Customers can save time because they can purchase anything through the merchant websites.
  6. Improved customer services: These days, consumers want better services. Therefore, e-business services offer a means of communication between the consumer and the company. The consumer can even make online complaints to a company.
  7. Origin of new business opportunity : The biggest network between consumers and the companies can lead to the origin of new business opportunities, like infinite possibilities for business to develop and increase their consumer base.
  8. Enhanced speed and accurancy of a product: The usage of e- business services reduces human errors and other problem like duplication of proceedings, This perfection in speed and accuracy, plus easy access to documents and information affect the increase in production.
  9. Product Cost saving: Despite the fact that you can reduce the cost of  a product by the use of online services, it also reduces the errors and the cost of sending the information to partners.



Other advantages

  • It reduces the cost of the product.
  • It reduces paper work as the entire work is done electronically.
  • The product is directly supplied to the customer because all orders and enquiries are processed online. This eliminates the need for wholesellers and retailers and brings down the cost
  • Improved customer relationship is achieved by fast dissipation of information.
  • online minimizes the time taken from order to delivery.
  • Provides better, faster and effective linkage with clients.
  • Enhances the orangnization ‘s product and also does a market analysis,as the organization gets feedback from the customer.
  • E-business helps people work together.
  • E-business is a 24 x 7 operation and has a global reach.


Disadvantages of e-business


  1. Lack of customer awareness: Mostly people have no knowledge about electronic communication like the internet, computers, etc. Therefore, they are not able to transact electronically.
  2. Not for small businesses: Small businessmen do not want to take any extra burden because they have no knowledge of e-business functions.
  3. Does not support all type of businesses: Some type of businesses  are not fit for e-business services.
  4. Legal formalities : If you want to use online services in your business, you have to complete certain legal formalites like authorization and authentication

Other disadvantages :

  • High risk for internet startup organization

is not free

  • Security problems
  • Customer relation problems
  • Data integrity problems
  • Cutomer satisfaction problems



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