Emerging Modes of Business — Class 11 Business Studies

Three of the strongest trends shaping modern business are digitisation, outsourcing and internationalisation, of which this chapter focuses on e-business and business process outsourcing. e-Business is the conduct of industry, trade and commerce using computer networks; it is broader than e-commerce because, besides buying and selling, it includes electronically conducted functions such as production, inventory management, product development, finance and human resource management. Its scope covers B2B commerce (between business firms, historically through EDI), B2C commerce (between firm and customers), intra-B commerce (within a firm using the intranet) and C2C commerce (between consumers). The benefits of e-business include ease of formation and lower investment, convenience round the clock, speed, global reach and movement towards a paperless society aided by the Information Technology Act 2000. Its limitations include low personal touch, mismatch between order taking and order fulfilment, need for technological competence, increased risk due to the anonymity of parties, people resistance and ethical issues. Online transactions involve registration, placing an order and a payment mechanism such as cash-on-delivery, cheque, net-banking, credit or debit cards, and digital cash. The security and safety of e-transactions face transaction risks, data storage and transmission risks (viruses, addressed by cryptography) and threats to intellectual property and privacy. Successful e-business needs money, men, machines and a website. Business process outsourcing contracts out non-core processes, including knowledge process outsourcing, to specialised providers to gain cost and quality advantages.