"A cent less spent adds a cent to profits."

Thursday, December 25, 2008
This is one of the guiding notions for an organisation to boost a business. Indeed, with the advent use of internet technologies, there is a significant cost reduction for every business transactions a company is involved. E-commerce has inevitably played a vital role in a company’s profits. Business to Consumer (B2C) and Business to Business (B2B) are the two common business models of E-Commerce which have guided an organisation to do their business processes electronically which certainly, two of the defining factors to succeed in the great competition both in local and international market. With the emergence of virtual market, every activity has converted digitally bringing good advantages with them.

Organisation’s edge to outdo its competitors is to make and go through new innovative strategies to correspond with the mainstream. Indeed, B2B transactions have been perceived as considerable factor to thrive well in E-Commerce. B2B makes an organisation possible to exchange information electronically. It has several advantages compared to that traditional B2B transaction. B2B involves several processes and costs that need to be simplified and cut off. These processes may undergo delays in traditional B2B that definitely reduces quality and good services. Wasting time is losing customers, which is equivalent to throwing away the profits the company may have absolutely gained when the procedures and stages the business transactions undergo has been conveniently handled and done. And so, cost is a major factor to be considered too. It is comprehensible that each processes or transaction may cost money which has been reduced by the innovative form of B2B transaction. This cost spent before in traditional way has been cut down with B2B e-commerce which significantly added to the profits may have not been gained before e-commerce has made into practice.

In relation with this, I have researched and come up with several functions the internet technologies have aided an organisation to gain better competitive advantage in the market. These are the following:

1. Location Flexibilities in Business Activities

Traditionally, large organisations or even the average businesses oftentimes acquire their products from other distant businesses which are termed as suppliers. Business entrepreneurs have to do inventory from time to time to check their stocks before they reach product scarcity. So before such event will occur, and since the distance of suppliers is a problem, they have to negotiate with them as early as they could before they run out of stocks that will lead to putting off the products that may have been requested or ordered by their customers. Now, another problem to be encountered is that the requisition of these orders as well as processing them, also require lengthy time before it reach the suppliers and in turn, the delivering of stocks from them. The very obvious problems of this are postponement of services, shortage of products, and customer’s dissatisfaction which will entirely ruin the business processes.

So, it has been a critical and difficult issue for business entrepreneurs to transact and negotiate with their suppliers from long distances. Now, this has been solved with the use of e-commerce from which such dilemma is unlikely. Internet has provided a wider horizon to connect the space between ends. Overcoming the distance has been made easier. Business owners can easily transact with their suppliers through a common medium with ease and convenience in negotiation. E-commerce has reduced the cost to create branches just to be near with suppliers since these electronic stores do not need to have several sites to reach suppliers and customers. Other business activities in traditional B2B having difficulties with distances have been done thoroughly with more convenience. Since location would not be a problem anymore for business entrepreneurs, this could help hasten the processes, widen the scope of customers and increase the profits.

2. Free Flow of Information

Before, the data and information in business transaction go through lengthy procedures before it connects two ends, the link between supplier and business owner. Data processing and the information flow follow through physical and conventional system wherein interruptions are quite unavoidable. Purchase orders are manually written, processes are physically done etc. This has significantly reduce the convenience and quick services delivery to the business establishment which in turn, follows a deferred cycle making it longer to provide the customers the product they desire.

B2B e-commerce has somewhat eradicated such tight spots. Similar to Government to Employee (G2E) e-commerce, the flow of information in B2B e-commerce with the aid of internet technologies, has been processed without restraints and is delivered with transparency. Indeed, the reliability and security of information flowing in the systems are ensured. Information from one end to other is delivered quicker, more accurate, even cheaper compared to the paper-based system and more organized compared to the traditional way. Information entailing the business transactions is one of the best assets and most important matters a company should look into since it is bringing a concrete basis to every decision to be made and key to every process to be done. Indeed, information is a powerful tool of an organisation.

3. Continuous Connection

E-commerce has provided businesses, 24/7 nonstop transactions making it more money-making for entrepreneurs. This certainly means that since there is a continuous transaction, the link between business owners and customers, workers and suppliers never ends too. There is a constant link between them. And so, with this, hastening the processes is done better as well as, productivity increases bringing more profits to the organisation.

So seeing these obvious distinctions, we realize that unlike the traditional, continuous transactions can never be done. Business owners still close their establishment at the end of the day losing the customers they might have served while the business is closed. Additionally, they can not enjoy a wider audience and suppliers compared to that in virtual businesss wherein they can reach any customers and any suppliers with absolute and speed.

4. Enhanced Services and Improve Productivity

Internet technologies have significantly brought lots of leads in B2B transactions. Certainly, some of these are more enhanced services and increased productivity. Why is this so, it is because the conventional system has been replaced with more convenient procedures from requisition up to the delivery of the products. Increased productivity is the outcome of the flawless and quicker cycle a business process has gone through.

With suppliers more than a reach of hand, several and different services can be acquired and delivered to the customers. With continuous flow of information as well as, constant connection, it is undeniable that more services could be made and done with the suppliers which in turn, provide the business entrepreneurs with more stocks and products attracting more customers. Thus, means more profits.

5. Data Processing Simplicity

Requisition of products undergo paper-based transactions, after then, purchasing orders are recorded manually, follows after are the step-by-step conventional procedures from which would likely produce delays and postponements and could entirely reduce the efficiency of the whole business process.

So with internet technologies, bulks of paper and complicated data processing has been slowly eradicated. Data is processed directly between two entities openly, manual operations from requisition, purchase orders to payment etc. Traditionally, the setup is less convenient and quick compared to electronic transaction.

6. Long-Term Relationship with Suppliers

Traditionally, business owners have their “suki” or regular suppliers when it comes to business, but this requires a lot of effort and trust-building in the relationship they make with suppliers. Maintaining it (specifically for distant suppliers) is to spend and put effort to negotiate with them physically considering the distant.

Now, with internet technologies, one does not need to spend lots of effort to connect the spaces between such distances between supplier and business owners. They can instantly negotiate, discuss and process business transactions digitally. With this continuous connection with suppliers, trust between the business owners and them could be easily developed. Delays are unlikely, postponed transactions are eliminated, thus, promotes to a healthy and professional relationship between them and the fact lies, that with this constant virtual interaction, definitely, it would last long.

7. Simplifying Procurement Processes

E-procurement is the most common subject in B2B e-commerce. Procurement processes has been done electronically providing lots of advantages. E-procurement processes include receiving of delivery data announcement, supplier's requisition request, transport ordering, retrieval and bidding. These are the common procedures between business owners and suppliers.

Common advantages of using internet technologies in e-procurement are:

a) Easy Purchasing
b) Eliminating Paperwork
c) Automating Approval Process
d) Cost Saving
e) Better Inventory Level
f) Better Information Flow between Buyers and Supplier

Seeing through these advantages brought by internet technologies in B2B e-commerce transactions, we could certainly see the ease and expediency it brings to a business. The most significant distinctions seen through all of these are to cut off the time between stages and procedures as well as, to save a large cost a company is spending in traditional B2B. Indeed, a company’s competitiveness is best perceived on how they control the cost within organisation. And so, a cost that is lessened brought of the use of internet technologies, returns good profits to an organisation.

References:

http://sec.oise.utoronto.ca/english/pdfs/workshops/RyanPoster.pdf
http://www.srlst.com/ijist/ijist-Vol2N2/ijist22-3-10.pdf
http://www.seedco.org/documents/publications/evolving_role_of_IT.pdf
http://bura.brunel.ac.uk/bitstream/2438/2888/1/paper+63.pdf
http://biblioteket.ehl.lu.se/olle/papers/0003126.pdf
http://www.seas.upenn.edu/profprog/emtm/insite-fall2008/feature-subprimecrisis2.html
http://epubl.ltu.se/1653-0187/2007/048/LTU-PB-EX-07048-SE.pdf
http://www.gxs.com/b2b-ecommerce.htm
http://www.umsl.edu/~keelr/280/soctechchange/soctech16.htm
http://ecommerce.hostip.info/pages/137/Business-Business-B2B-E-Commerce-B2B-E-COMMERCE-IN-EARLY-ADOPTER-STAGE.html
http://www.globalbusinessinsights.com/content/rbtc0047m.pdf
http://www.websoftwareoutsourcing.com/b2bdevelopment.shtml

3 comments:

  • Angelina

    I got a grant from the federal government for $12,000 in financial aid, see how you can get one also at
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  • mae

    Internet can do several transactions which is easy for the company to do and not at high cost.

  • Questa Quenna

    Electronic commerce that is conducted between businesses is referred to as business-to-business or B2B. B2B can be open to all interested parties (e.g. commodity exchange) or limited to specific, pre-qualified participants. Electronic commerce that is conducted between businesses and consumers, on the other hand, is referred to as business-to consumer or B2C. This is the type of electronic commerce conducted by companies such as http://www.infysolutions.com

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