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1TheLeapFromElectronicCommercetoElectronicBusinessEdwardJ.Cherian,Ph.D.ProfessorofInformationSystemsGeorgeWashingtonUniversityWashington,DCPresentedattheABASInternationalConferenceBrussels,BelgiumJuly23,2001AbstractManypeoplebelievethatelectroniccommerceandelectronicbusinessarethesame.Electroniccommerceisapartofelectronicbusiness;itisthepartthathastodowithbuyingandsellinggoodsandservicesbyusingadatacommunicationsnetworkinsteadofapaperortelephone(voice)system.FirstgenerationeffortstoconductelectroniccommerceproceededtheInternet.Inthesecondgenerationmostbusinessesprogressedinelectroniccommercetowheretheycouldconductsalestransactionselectronically.Electroniccommerce-procurement-isamajorimprovementinbusinessmanagement,butweneedtomarrythisfunctionwithothercapabilitiestoconvertanorganizationtoanelectronicbusiness.Wearenowinthethirdgenerationofelectroniccommerce:theintegrationofinformationtechnologyinfrastructuretocreateanelectronicbusiness.Buttheleaptoelectronicbusinessasanorganizationalstrategyisnoteasy.Electronicbusinessisnotjustthebuyingandsellingofproductsandserviceselectronically–itincludesconnectionsoftheseelectronicprocessestootherpartsoftheorganizationthatrelateinternallytofinance,fulfillment,staffing,marketing,customerservice,etc.,andexternallytocustomersandthesupplychain.Whenanorganizationrecognizesthestrategicimportanceofthisnewbusinessapproachandembracesanewbusinessmodel,therebymakingafundamentalcommitmenttothisprocessintegration,itcanmoveontobecomeacomprehensiveelectronicbusiness.2I.IntroductionElectroniccommercemeanswemovefromthephysicaltotheelectronicastheprimarymeansofconductingbusiness.Thismovementisnotreallyanewbusinessmodel.Itiseasytotracetheoriginofe-commercetotheinventionofthetelegraphsome150yearsago,whichputtheponyexpressrideroutofbusiness.Someyearslaterthebankingindustrybeganelectroniccommercebyintroducingtheautomatictellermachineandelectronicfundstransfer.Untilrecentlymostpeopleneverreferredtothisworkaselectroniccommerce.Morerecentlyorganizationsrealizedtheadvantagesofinterconnectingcomputer-basedinformationsystemsforfast,efficient,error-freetransactions;electronicdatainterchange.Manyofthelargestglobalcorporations,GeneralMotors,GeneralElectric,Boeing,Wal-Mart,andothersusethistechnologytodevelopnewinterorganizationalrelationshipsanddramaticallyimprovebusinessefficiency.Astep-functionchangeinthepaceofelectroniccommerceproliferationoccurredin1993withtheopeningoftheInternetforcommercialuse.“Aselectroniccommerceapproachestheendofitsbeginning..”(Zwass,1996),electronicbusinessisbornfromelectroniccommerceformanyorganizations.TheInternethasmadeitpossibleforevenverysmallbusinessestohaveawebpresenceandengageinelectroniccommercewithlargecorporationsandgovernmentagenciesaswellasconsumersworldwide.Onceanorganizationsamplestheadvantagesofelectroniccommerce,thereisastrongincentivetoelectronicallyconnecttheentirebusinessandsignificantlyleveragethebenefits.Initiallye-commerceWebsiteswereallcustomdesignedandbuiltforeachnewe-commerceventure.Anentirenewfamilyofmostlystart-upbusinessescameintobeingtocreatesuchWebsites.Itdidn’ttakelongforthebigguysinthebusiness,IBM,Oracle,andMicrosoftforexample,torealizethatthiswasanewbusinessopportunitytheycouldnotletpassby.SoanewfamilyofsoftwarepackagesweredevelopedthatallowforthetailoringofWebsitesforcustomersstartingwithagenericreusablepackageratherthanareinvention.3Amazon.com’ssuccessfulbusinessformhasbeenemulatedbymany:folderswithtabs,frequentlyaskedquestions,helpdesk,shoppingcarticon,easeofpayment,privacypolicy,orderreview,etchavenowbecomestandardfeaturesatleastformanybusiness-to-consumere-businesses.Itiseasytoconductbusinesstransactionselectronically.Itisnotsoeasytobecomeanelectronicbusiness.Noonesatdownandsaidletsdesignelectronicbusiness.HavingaWebsiteiswhatmanyorganizationsthoughtwaswhatittakestodoelectronicbusinessandtransformabusiness:Itisonlythebeginningofelectroniccommerce.Thetransitiontoane-businesscomesfromtheintegrationofthewebsitetotheupstreamanddownstreamportionsofanorganization’sbusiness.Electronicbusinessconnectscustomerswithsuppliersandalltheintermediariesthatmakeupthevaluechain,inawaythathasnotbeenpreviouslypossible.Electronicbusinessblursthelinesbetweenorganizationsandrequiresthatwequestiontherolesandnamingconventionsof;buyer,seller,banker,manufacturer,supplier,delivery,customerservice,...etc.Electronicbusinessmarriesinformationtechnologywithbusinessprocesses.“AutomateorDie”,isthetitleofanarticlebyStacyPermandescribingDellComputer’shighlyautomatede-business.“Innovateordie!”sayKeenandMcDonaldinagreementwiththeimperativetodosofastoronewillmissthewindowofopportunity.Automate,innovate,integrate,andnetwork,thebasicneedtodigitizebusinessoperationsisthecoreofelectronicbusiness.Thereisanewbusinessmodelintheglobaleconomy,inspiteofthefactthatsomanydot-comsfailedrecently,anditisbasedonelectronicbusiness.Everybusinessshouldbeane-business,andtechnologicalintegrationistheyeastthatmakesthee-businessbread.Thisnewbusinessmodelhastobethecoreofallbusinesses;thisisthewaythew