Electronic business: legal framework, development, processes

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

Electronic business is a commercial activity where all the possibilities of information and telecommunication technologies are used to increase profits. Simply put, people began to enjoy the benefits of civilization without hesitation and learn to earn money without leaving their comfortable homes. It was only at first that the Internet was created as a way to exchange information, but today it is a quite profitable platform for startups.

Parts

Technological progress does not stand still, and today the Internet is used as an interactive channel for interaction between companies, their partners and customers. No one is surprised by online sales or Skype negotiations. The Internet has evolved into a networked economy that is the backbone of e-business.

Over time, along with the concept of e-business, the concept of e-commerce appeared. This is the same component of the electronicbusinesses like marketing, online advertising, financial services, investment funds, etc.

Battle of concepts

There are many definitions for e-business. For example, specialists from IBM companies say that this is the transformation of the basic processes of doing business with the help of the Internet. The Gartner Group is inclined to think that e-business is the continuous improvement of the company's products and services, as well as production links through the use of digital technologies. As for the definition from the Encyclopedia of Internet Business, it sounds like this: it is a business activity during which all the possibilities of information networks are used.

It is easy to see that all these processes reflect the use of the World Wide Web, although today the development of electronic business has long passed this stage and opened up a wider field for activity. Therefore, e-business can be characterized as follows: it is the implementation of business processes during which all the possibilities of information and telecommunication technologies are used.

Today we can say with confidence that the process of transformation of communications in the enterprise is rapidly advancing. Inside the company, the Network is used to increase the efficiency of employee interaction, optimize the planning and management process. For external communications, the Global Network is used to build relationships with partners, customers, and suppliers.

Features of the network economy

With the spread of e-business, the notionas a network economy, it is closely related to all communications that are carried out using a computer. Unlike the usual economic system, it has its own characteristics:

• Products and information about them move here, not people.
• The production of goods is organized in a country where there is a steady demand for them.
• Competition intensifies in the labor market.
• The role of domestic knowledge work (i.e. freelancing) is growing significantly.
• Business partners change more dynamically.
• Information tools for large and small organizations become equal.
• Decisions are made more quickly.
• Governance takes place on a collective and equal basis.
• New forms of payment appear.

True, here, as in every activity, there are shortcomings. For example, it is difficult to calculate risks, since they are global in nature, it is almost impossible to single out the main risk factors. In the virtual world, the situation changes much faster than in the real world, so decisions must be made quickly. Who did not have time, he lost the profit. It is also difficult to ensure the information security of a business, and the enterprise has absolutely no legal status.

The beginning of a new era

The development of e-business consists of three stages:

1. The first stage fell on 1994-1999. At this time, commercial organizations for the first time found a place for themselves in the information environment and began to try a new wayinteractive interaction with clients. From a technological, marketing and business perspective, this was a real breakthrough. By the end of the 90s, e-business began to expand its demands, requiring the creation of a two-way interaction with customers.
2. The beginning of the second stage dates back to 1998. Then organizations began to gain experience in the global network and called their activities e-commerce. At that time, order forms were already appearing on websites, which, after being filled out, were transferred to the processing system.
3. The third stage began in 2000. Then electronic business became an integral part of all spheres of economic activity. Entrepreneurs no longer just posted information on websites, but transmitted it to the client in various ways. At the third stage of development, the business requires the use of automated applications that would simply work without human intervention.

Electronic business processes have improved a lot in the third stage of development. The quality of service has significantly increased, prices for products and services have decreased. Everything has become automated, and workers only do the tasks they know how to do best.

Categories

Given the number of entities involved, electronic business systems are conditionally divided into three categories:

• Operating within the same organization. This is possible when using the Internet network, which will be a corporate network. With its help, the process of information transfer occurs withminimum time, money and effort.
• Business between several organizations. It is carried out using an extranet. This system is an electronic exchange of business information, supports the processing of large amounts of data, converts paper documents into electronic format.
• Business for consumers. Perhaps it is better developed than the other two. Due to the fact that the global information network connects many computers, it is both a medium and a market, allowing significant savings in the process of information transfer.

Field of activity

Given the field of activity, e-business can be divided into several parts, according to how it is connected to the Internet:

• Business on the Internet. This includes any activity that is related to the distribution and technical support of the provider.
• Business around the Internet. This aspect includes the supply of hardware and software. Web design, programming and related services.
• Business on the Internet. This is the creation of advertising on the Internet, electronic auctions, shops, online marketing, etc.

Commerce as an element of online business

E-commerce is an important part of e-business. This term refers to a transaction executed in any form, during which the parties transfer information to each other through telecommunication technologies.

E-commerce isway of doing business on a global scale. It enables companies to interact more closely with other firms, suppliers and respond to customer requests faster.

E-business is a general concept that includes interactions between subjects of market relations using digital technologies, and commerce is just an integral part of it.

Directions

If you delve into the topic, you can understand that the basis of electronic business is precisely e-commerce. It is divided into five directions:

1. Business to business. This includes all areas of information communications between firms. By using technology to receive and transmit data, firms can significantly save time and conduct their business more efficiently.
2. Business consumer. Today, this direction is considered the most effective from an economic point of view. The basis of this direction is online retail.
3. Consumer-consumer. Consumers exchange commercial information. For example, they talk about their experience of cooperation with some company, about the purchased goods, etc. Also, this segment of activity includes trade between individuals.
4. Business administration. This kind of interaction is about creating business links between business and government organizations.
5. User-administration. Perhaps one of the least developed commercial areas. True, there is high potential here: such a connection can be used to create a connection betweengovernment and consumer. This will be especially relevant in the social and tax spheres.

True, now the basis of e-commerce is trading and providing services via the Internet.

Activities

Since the Global Network appeared, entrepreneurs have realized that they can use it for their own purposes in order to expand the field of operation. Thanks to the development of e-business, it became possible to expand production, reduce costs, increase the customer base and work outside the country.

This type of entrepreneurial activity began to develop in two main directions - the creation of a business from scratch and the development of an existing business. It should be noted that in this activity the geographical location is of great importance, because each region has its own characteristics, the speed of technological development and the legal foundations of e-business. But be that as it may, business everywhere goes through the same stages of development. Corporations come first, then communities, conglomerates, network economies, and electronic markets.

International regulations

E-business is not just an activity like online games that anyone can play without thinking about anything. With the development of the Internet and commercial relations in the Global Network, the world community has adopted a number of documents regulating this activity. So, in 1995, the UN Commission wasthe law “On Legal Aspects of Electronic Data Interchange” was adopted. On January 30, 1997, by a resolution of the UN General Assembly, another law was created - "On Electronic Commerce". This document still serves as the main legal basis for actions in the field of e-business.

Thus, e-business can be considered a full-fledged economic activity that has more pluses than minuses.