The previous sections have included discussions about what e-commerce is and its impact, but what are the benefits of e-commerce? What does it offer and why do it? The benefits of e-commerce can be seen to affect three major stakeholders: organizations, consumers and society.
Benefits of e-commerce to organizations
International marketplace. What used to be a single physical marketplace located in a geographical area has now become a borderless marketplace including national and international markets. By becoming e-commerce enabled, businesses now have access to people all around the world. In effect all e-commerce businesses have become virtual multinational corporations
Operational cost savings. The cost of creating, processing, distributing, storing and retrieving paper-based information has decreased (see Intel mini-case).
Mass customization. E-commerce has revolutionized the way consumers buy good and services. The pull-type processing allows for products and services to be customized to the customer’s requirements. In the past when Ford first started making motor cars, customers could have any colors so long as it was black. Now customers can conﬁgure a car according to their speciﬁcations within minutes on-line via the www.ford.com website.
Lower telecommunications cost. The Internet is much cheaper than value added networks (VANs) which were based on leasing telephone lines for the sole use of the organisation and its authorised partners. It is also cheaper to send a fax or e-mail via the Internet than direct dialling.
No more 24-hour-time constraints. Businesses can be contacted by or contact customers or suppliers at any time.
Beneﬁts of e-commerce to consumer
24/7 access. Enables customers to shop or conduct other transactions 24 hours a day, all year round from almost any location. For example, checking balances, making payments, obtaining travel and other information. In one case a pop star set up web cameras in every room in his house, so that he could check the status of his home by logging onto the Internet when he was away from home on tour
More choices. Customers not only have a whole range of products that they can choose from and customize, but also an international selection of supplier
Price comparisons. Customers can ‘shop’ around the world and conduct comparisons either directly by visiting different sites, or by visiting a single site where prices are aggregated from a number of providers and compared
Beneﬁts of e-commerce to society
Enables more ﬂexible working practices, which enhances the quality of life for a whole host of people in society, enabling them to work from home. Not only is this more convenient and provides happier and less stressful working environments, it so potentially reduces environmental pollution as fewer people have to travel to work regularly.
Facilitates delivery of public services. For example, health services available over the Internet (on-line consultation with doctors or nurses), ﬁling taxes over the Internet through the Inland Revenue website