E-Commerce leads to virtual enterprises

THE BUSINESS requirements of enterprises are constantly changing and the changes are taking place at an exponential rate. The requirements have evolved from the day to day clerical recording of transactions to the automation of business process. Exception reporting has shifted from tracking and correcting daily transactions that have gone astray to the self-adjusting business process.

Technology has likewise advanced by delivering exponential increases in computing power and communicating capabilities. With the advancement of telecommunication and information technology, enterprises have started changing their structure and way of functioning. Traditional methods of transforming and processing of business information and business documents are being replaced by electronic methods.

The components needed to carry out the above process through electronic methods are the Internet/intranet/extranet, electronic data interchange (EDI), electronic fund transfer (EFT) and electronic mail (e-mail).

The business process that takes place with the help of these components from one computer to another between two organisations can be termed as e-commerce. E-commerce is the generic name for a range of technologies that allow exchange of information related to business transactions electronically. The diagram gives an idea about their role in enterprises.

In most enterprises some of the components or all are already in use in business information processing. The application of various components of e-commerce depends on the type of enterprises. The following examples give an idea of the usefulness of the new technology.

e-manufacturing: Besides the regular sharing of information between the manufacturing organisations and their vendors, computer aided design (CAD) software can be used for generating drawings and prototypes of items for vendors. The bills of material module in ERP package provides the details of the items used in the manufacture of their finished products. The drawings of these items can be generated by using CAD software and transmitted to the vendor office through e-commerce facility. This prototype will help the vendor produce the items as per the purchase order. Once the items are received from the vendor, instructions will be given to the bank for transfer of the amount due to the vendor to his banker.

e-health: The concepts of e-commerce can be extended to the healthcare sector by establishing a link among doctors, clinical laboratories, hospitals, pharmacies and insurance companies situated at different locations. By this link it is possible to send patients' medical records to doctors, X-ray images directly from patient to doctor from clinical laboratories, hospitals and so on. Insurance claim information can also be sent by hospitals or doctors directly to the insurance companies.

e-research: With the help of e-commerce concepts an independent research centre or a centre for a group belonging to a particular type of enterprises can be established to conduct research activities. Research activities can be carried out on the basis of data provided by members of the research institute from web sites, data from publications (now available in CDs) and data collected by the research centre itself. All these data from different sources can be stored in one database. This is like a warehouse. This is known as `Data Warehousing' in information technology. This helps them conduct research activities.

e-education: Merging education and electronic commerce will change not only the way courses are conducted and the way students learn. The online education revolution could fundamentally change the role of universities, colleges and schools. It may become common practice to study at several universities rather than at a single location. One can imagine a course with lectures at Stanford on Mondays, tutorials at Cambridge on Tuesdays, hands on practice with industry experts in a simulated factory and the use of any library to carry out enhanced learning for the rest of the week. Students from Mexico, Australia, India and Belgium could all participate in a management lecture presented by a professor at the University of Madras and run by a University of Texas.

e-services: It is interesting to note how a component of electronic commerce has provided a solution to the homeless persons in Colorado State in the U.S.

Colorado's dilemma: How do you locate a homeless person to tell him or her that a job interview has been scheduled or an opportunity for work has opened up? After all, the homeless have no address or telephones. The State decided to establish individual voice mail accessible by toll free telephone numbers, for each homeless person in the programme. The individuals simply called their personalised numbers to get their messages. It worked. Most of the homeless people enrolled in this programme have found jobs.

Virtual enterprises: The above examples show that proximity of people, resources and services will no longer be necessary for transforming and processing of information. Thus information technology and telecommunications are providing a number of avenues to face the new realities of the changing business scenario. The changes that have taken place in the enterprises through integration of information technology with the telecommunication technologies have led to virtual enterprises. Therefore, it can be envisaged that hereafter enterprises will increasingly be defined not by concrete walls or physical space but by collaborative networks linking hundreds and thousands of people. It is time the information technology users will avail themselves of the unfolding opportunities.

N. Raghavendra Rao