What Is Electronic Commerce?

What is Electronic Commerce?

"E-commerce has the potential to unleash enormous savings and business efficiencies, but the practicalities remain elusive. How will e-commerce change the global planning and purchasing of transport and logistics in the supply chain? Logistics has been described as the key enabler for e-business - but how can individual logistics and transport companies ensure that they benefit from, rather than perish in, the e-commerce revolution?" Alan Waller, partner, PRICEWATERHOUSE COOPERS, EMEA.

Electronic Commerce (e-commerce) is electronic business. It's using the power of computers, the Internet and shared software to send and receive product specifications and drawings; bids, purchase orders and invoices; and any other type of data that needs to be communicated to customers, suppliers, employees or the public.

E-commerce is the new, profitable way to conduct business which goes beyond the simple movement of information and expands electronic transactions from point-of-sale requirements, determination and production scheduling, right through to invoicing, payment and receipt. E-commerce uses key standards and technologies including Electronic Data Interchange (EDI), Technical Data Interchange (TDI), Hypertext Mark-up Language (HTML), eXtensible Mark-up Language (XML), and the Standard for Exchange of Product model data (STEP).

E-commerce is made possible through the expanded technologies of the Internet, the World Wide Web, and Value-Added Networks.

The Internet is a world wide collection of computer networks, co-operating with each other to exchange data using a common software standard. Through telephone wires and satellite links, Internet users can share information in a variety of forms. The size, scope and design of the Internet allows users to connect easily through ordinary personal computers and local phone numbers, exchange electronic mail (E-mail) with friends and colleagues with accounts on the Internet, post information for others to access, and update it frequently, access multimedia information that includes sound, photographic images and even video, and access diverse perspectives from around the world.

An additional attribute of the Internet is that it lacks a central authority--in other words, there is no "Internet, Inc." that controls the Internet. Beyond the various governing boards that work to establish policies and standards, few rules and answers to no single organisation bind the Internet.

The History of the Internet

Many people think that the Internet is a recent innovation, when in fact the essence of it has been around for over a quarter century. The Internet began as ARPAnet, a U.S. Department of Defence project to create a nation-wide computer network that would continue to function even if a large portion of it were destroyed in a nuclear war or natural disaster.

During the next two decades, primarily academic institutions, scientists and the government for research and communications used the network that evolved. The appeal of the Internet to these bodies was obvious, as it allowed disparate institutions to connect to each other's computing systems and databases, as well as share data via E-mail.

The nature of the Internet changed abruptly in 1992, when the U.S. government began pulling out of network management, and commercial entities offered Internet access to the general public for the first time. This change in focus marked the beginning of the Internet's astonishing expansion.

The Internet explosion coincides with the advent of increasingly powerful yet reasonably priced personal computers with easy-to-use graphical operating systems. The result has been an attraction of recent computer "converts" to the network, and new possibilities for exploiting a wealth of multi-media capabilities.

So why use Electronic Commerce?

Whether business to business (B2B) or business to customer (B2C) there are benefits to all parties, customers or suppliers. A reduction in acquisition times and costs, lower prices for goods and services, an expanded number and quality of suppliers,