Electronic Business

E-Business The application of information and communications technologies (ICT) in

support of all the business activities. (Source: http://en.wikipedia.org/wiki/Electronic_business)

An electronically mediated information exchanges, both within an organization and with external stakeholders supporting the range of business processes. – Dave Chaffey

A term used to describe businesses run on the Internet, or utilizing Internet technologies to improve the productivity or profitability of a business. In a more general sense, the term may be used to describe any form of electronic business — that is to say, any business which utilizes a computer. This usage is somewhat archaic, however, and in most contexts, e-business refers exclusively to Internet businesses. (Source: http://www.wisegeek.com/what-is-ebusiness.htm)

The use of technology to improve your business processes. This includes managing internal processes such as human resources, financial and administration systems, as well as external processes such as sales and marketing, supply of goods and services, and customer relationships.

The conduct of business on the Internet, not only buying and selling but also servicing customers and collaborating with business partners (Source: http://searchcio.techtarget.com/definition/e-business).

The use of electronic, computing, and Internet-based technologies to change traditional revenue models and business designs to the mutual benefit of customers and vendors.

The replacement of ineffective existing methods of information flow in the supply and value chains of an organization, and creating new ones with Internet-based, computing, and communications technologies. It liberates resources like manpower, materials, money and time, which can then be redistributed for more value-added tasks, to bring incremental revenue and profits to customers and suppliers.

The term was coined by IBM’s marketing and Internet teams in 1996.

Three Categories of E-Business Applications Internal Business Systems

o Customer Relationship Management (CRM). A system for managing a company’s interaction with current and future customers. It involves using technology to organize, automate, and synchronize sales, marketing, customer service, and technical support (a range of services by which enterprises provide assistance to users of technology products such as mobile phones, TVs, computers, software products, or other electronic or mechanical goods).

o Enterprise Resource Planning (ERP). Business management software, usually a suite of integrated apps, that a company can use to store and merge data from every stage of business, including:

Product planning, cost, and development Manufacturing Marketing and Sales Inventory Management Shipping and Payment

o Document Management System (DMS). A computer system (or set of computer programs) used to track and store electronic documents.

o Human Resource Management (HRM). A function of an organization designed to maximize employee performance in service of their employer’s strategic objectives.

Enterprise Communication and Collaboration

o VoIP (Voice over Internet Protocol). A methodology and group of techniques for the delivery of voice communications and multimedia sessions over Internet Protocol (IP) networks, such as the Internet. Other terms commonly associated with VoIP are IP telephony, Internet telephony, Voice over Broadband (VoBB), broadband telephony, IP communications, and broadband phone service.

o Content Management Systems (CMS). A computer program that allows publishing, editing, and modifying content as well as maintenance from a central interface.

o E-Mail. A method of exchanging digital messages from an author to one or more recipients.

o Voice Mail (a.k.a. voice-mail, voice messages or voice bank). A computer-based system that allows users and subscribers to exchange personal voice messages; to select and deliver voice info; and to process transactions relating to individuals, organizations, products, and services, using an ordinary telephone.

o Web Conferencing. A service that allows conferencing events to be shared with remote locations. These are sometimes referred to as webinars or, for interactive conferences, online workshops.

o Digital Work Flows (or Business Process Management -BPM). The “holistic management approach” to aligning an organization’s business processes with the wants and needs of clients.

Electronic Commerce - B2B or B2C o Internet Shop (a.k.a. e-web-store, e-shop, e-store, online shopping, e-

shopping, web-store, online store, online storefront and virtual store). A form of electronic commerce which allows consumers to directly buy goods or services from a seller over the Net using a web browser.

o Supply Chain Management (SCM). The management of the flow of goods. It includes the movement and storage of raw materials, work-in-process inventory, and finished goods form point of origin to point of consumption.

o Online Marketing (a.k.a. online advertising/Internet advertising). Marketing that uses the Net to deliver promotional marketing messages to consumers. It includes e-mail, marketing search engine, marketing special media marketing, many types of display advertising (including web banner advertising), and mobile advertising.

o Offline Marketing. The traditional methods of marketing such as television/newspaper/magazine/radio/billboard advertisements, posters, jingles, and other advertising means.

Most Adapted E-Business Models E-Shops. A form of electronic commerce which allows consumers to directly buy

goods or services from a seller over the Internet using a web browser. Alternative names are: e-web-store, e-shop, e-store, Internet shop, web-shop, web-store, online store, online storefront and virtual store. It evokes the physical analogy of buying products or services at a bricks-and-mortar retailer or shopping center.

E-Commerce. A type of industry where the buying and selling of products or services is conducted over electronic systems such as the Internet and other computer networks. It is a subset of an overall business strategy and generally considered to be the sales aspect of e-business. It seeks to add revenue streams using the World Wide Web or the Internet to build and enhance relationships with clients and partners and to improve efficiency using the Empty Vessel strategy. Often, e-commerce involves the application of knowledge management systems. It also consists of the exchange of data to facilitate the financing and payment aspects of business transactions. This is an effective and efficient way of communicating within an organization and one of the most effective and useful ways of conducting business. It is a market entry strategy where the company may or may not have a physical presence. Subsections of E-Commerce

E-tailing or "virtual storefronts" on Web sites with online catalogs, sometimes gathered into a "virtual mall."

The gathering and use of demographic data through Web contacts. Electronic Data Interchange (EDI), the business-to-business exchange of

data. E-mail and fax and their use as media for reaching prospects and

established customers (for example, with newsletters). Business-to-business buying and selling. The security of business transactions.

E-Procurement (sometimes also known as supplier exchange). The business-to-business or business-to-consumer or business-to-government purchase and sale of supplies, work, and services through the Internet as well as other information and networking systems, such as electronic data interchange and enterprise resource planning. Value Chain of E-Procurement

Indent management. The workflow involved in the preparation of tenders. This part of the value chain is optional, with individual procuring departments defining their indenting process.

e-Tendering e-Auctioning Vendor Management Catalogue Management Purchase Order Integration Order Status Ship Notice e-Invoicing e-Payment Contract Management

Elements of E-Procurement Request for Information (RFI). A standard business process whose purpose

is to collect written information about the capabilities of various suppliers. Request for Proposal (RFP). A solicitation made, often through a bidding

process, by an agency or company interested in procurement of a commodity, service or valuable asset, to potential suppliers to submit business proposals.

Request for Quotation (RFQ). A standard business process whose purpose is to invite suppliers into a bidding process to bid on specific products or services. RFQ, generally means the same thing as IFB (Invitation For Bid).

RFx (the previous three together) eRFx (software for managing RFx projects)

Seven Main Types of E-Procurement Web-based ERP (Enterprise Resource Planning): Creating and

approving purchasing requisitions, placing purchase orders and receiving goods and services by using a software system based on Internet technology.

e-MRO (Maintenance, Repair and Overhaul): The same as web-based ERP except that the goods and services ordered are non-product related MRO supplies.

e-sourcing: Identifying new suppliers for a specific category of purchasing requirements using Internet technology.

e-tendering: Sending requests for information and prices to suppliers and receiving the responses of suppliers using Internet technology.

e-reverse auctioning: Using Internet technology to buy goods and services from a number of known or unknown suppliers.

e-informing: Gathering and distributing purchasing information both from and to internal and external parties using Internet technology.

e-marketsites: Expands on Web-based ERP to open up value chains. Buying communities can access preferred suppliers' products and services, add to shopping carts, create requisition, seek approval, receipt purchase

orders and process electronic invoices with integration to suppliers' supply chains and buyers' financial systems.

E-Malls. Websites that sell the products and services of different companies. They display electronic catalogs from several suppliers, and charges commission from them from revenues generated at the site.

E-Collaboration. The process of monitoring, critiquing, and cooperating in a project or program by using the Internet, e-mails, groupware, etc.

E-Auctions. Negotiations conducted via an online platform. Or, processes in which the bids can be given through Internet with many websites interested in selling goods at a fair price. Type of Popular Online Auctions

English Auction (Open Ascending Price Auction). A type of auction, whose most typical form is the "open outcry" auction. The auctioneer opens the auction by announcing a Suggested Opening Bid, a starting price or reserve for the item on sale and then accepts increasingly higher bids from the floor consisting of buyers with a possible interest in the item. Unlike sealed bid auctions, "open outcry" auctions are "open" or fully transparent as the identity of all bidders is disclosed to each other during the auction. The highest bidder at any given moment is considered to have the standing bid, which can only be displaced by a higher bid from a competing buyer. If no competing bidder challenges the standing bid within a given time frame, the standing bid becomes the winner, and the item is sold to the highest bidder at a price equal to his or her bid. More generally an auction mechanism is considered "English" if it involves an iterative process of adjusting the price in a direction that is unfavorable to the bidders (increasing in price if the item is being sold to competing buyers or decreasing in price in a reverse auction with competing sellers).

Dutch Auction (Open Descending Price Auction). A type of auction in which the auctioneer begins with a high asking price which is lowered until some participant is willing to accept the auctioneer's price, or a predetermined reserve price (the seller's minimum acceptable price) is reached. The winning participant pays the last announced price. This is also known as a clock auction or an open-outcry descending-price auction.

First-Price Sealed-Bid Auction. A type of auction where a single bid is made by all bidding parties and the single highest bidder wins, and pays what they bid. The main difference between this and English auctions is that bids are not openly viewable or announced as apposed to the competitive nature which is generated by public bids. From the game-theoretic point of view, the first-price sealed-bid auction is strategically equivalent to the Dutch auction; that is, in both auctions the players will be using the same bidding strategies.

Vickrey Auction. A type of sealed-bid auction. Bidders submit written bids without knowing the bid of the other people in the auction. The highest bidder wins but the price paid is the second-highest bid. It is sometimes known as a second-price sealed-bid auction, uses very much the same principle as a first-price sealed bid.

Reverse Auction. A type of auction in which the roles of buyer and seller are reversed. In an ordinary auction (also known as a forward auction), buyers compete to obtain a good or service by offering increasingly higher prices. In a reverse auction, the sellers compete to obtain business from the buyer and prices will typically decrease as the sellers undercut (price slice) each other.

Bidding Fee Auction (also called Penny Auction). A type of all-pay auction in which all participants must pay a non-refundable fee to place each small incremental bid. The auction ends after a period of time, typically ten to twenty seconds, without new bids; the last participant to have placed a bid wins the item and also pays the final bid price, which may be significantly lower than the retail price of the item. The auctioneer makes money in two ways: the fees for each bid and the payment for the winning bid, totaling

typically significantly more than the value of the item. Such auctions are typically held over the Internet, rather than in person.

Virtual Communities. Social networks of individuals who interact through specific media, potentially crossing geographical and political boundaries in order to pursue mutual interests or goals. One of the most pervasive types of virtual community include social networking services, which consist of various online communities. Impacts of Virtual Communities

On Health. It's argued that online relations are not as valuable as offline ones because there is less socialization. Concerns with this kind of interaction also include verbal aggression and inhibitions, promotion of suicide and issues with privacy. Studies regarding the health effects of these communities did not show any negative effects, but that doesn't mean that there is no harm done. There was a high drop out rate of participants in the study that if continued could have led to a negative net effect. The health related effects are not clear because of the lack of thoroughness and the variation in studies done on the subject.

On Civic Participation. Online communities seem to have a direct impact on civic participation. 20.3% of members do something in real life at least once a year to support a cause related to their online community. 65% of members have started involvement in civic causes since they connected to the Internet. 43.7% are more involved with social activism since connecting with their online communities. Over half of virtual community members sign into their respective communities every day and 70% interact with other members daily.

Types of Virtual Communities Internet Message Board. A forum where people can discuss thoughts or

ideas on various topics. Online message centers allow users to choose which thread, or board of discussion, users would like to read or contribute to. A user will start a discussion by making a post on a thread. Other users who choose to respond can follow the discussion by adding their own post to that thread. Message boards are not conversation based because user responses do not have to take place right away. Whenever the user revisits the message board, he/she can make a response. Unlike a conversation, message boards do not have an instantaneous response and require that users actively go to the site to check for responses. The downside to message boards was that people would have to wait until another user replied to their posting, which, with people all around the world in different time frames, could take awhile.

Online Chat Rooms. A chat room is primarily used to describe any form of synchronous conferencing, occasionally even asynchronous conferencing. The term can thus mean any technology ranging from real-time online chat and online interaction with strangers over instant messaging and online forums to fully immersive graphical social environments. The primary use of a chat room is to share information via text with a group of other users. Generally speaking, the ability to converse with multiple people in the same conversation differentiates chat rooms from instant messaging programs, which are more typically designed for one-to-one communication. The users in a particular chat room are generally connected via a shared interest or other similar connection, and chat rooms exist catering for a wide range of subjects. New technology has enabled the use of file sharing and webcams to be included in some programs.

Virtual Worlds. The most interactive of all virtual community forms. In this type of virtual community, people are connected by living as an avatar in a computer-based world. Users create their own avatar character (from choosing the avatar's outfits to designing the avatar's house) and control

their character's life and interactions with other characters in the 3-D virtual world. It is similar to a computer game, however there is no objective for the players. A virtual world simply gives users the opportunity to build and operate a fantasy life in the virtual realm. Characters within the world can talk to one another and have almost the same interactions people would have in reality. For example, characters can socialize with one another and hold intimate relationships online.

Social Networking Services. The most prominent type of virtual community. They are either a website or software platform that focuses on creating and maintaining relationships. Facebook, Twitter, and Myspace are all virtual communities. With these sites, one often creates a profile or account, and adds friends or follow friends. This allows people to connect and look for support using the social networking service as a gathering place. These websites often allow for people to keep up to date with their friends and acquaintances’ activities without making much of an effort. On Facebook, for example, one can upload photos and videos, chat, make friends, reconnect with old ones, and join groups or causes. All of these functions encourage people to form a community, large or small, on the Internet.

Advantages to Internet Communities Internet communities offer the advantage of instant information exchange

that is not possible in a real-life community. This allows people to engage in many activities from their home, such as: shopping, paying bills, and searching for specific information. Users of online communities also have access to thousands of specific discussion groups where they can form specialized relationships and access information in such categories as: politics, technical assistance, social activities, and recreational pleasures. Virtual communities provide an ideal medium for these types of relationships because information can easily be posted and response times can be very fast. Another benefit is that these types of communities can give users a feeling of membership and belonging. Users can give and receive support, and it is simple and cheap to use.

Economically, virtual communities can be commercially successful, making money through membership fees, subscriptions, usage fees, and advertising commission. Consumers generally feel very comfortable making transactions online as long as the seller has a good reputation throughout the community. Virtual communities also provide the advantage of disintermediation in commercial transactions, which eliminates vendors and connects buyers directly to suppliers. This eliminates pricey mark-ups and allows for a more direct line of contact between the consumer and the manufacturer.

Disadvantages to Internet Communities While instant communication means fast access, it also means that

information is posted without out being reviewed for correctness. It is difficult to choose reliable sources because there is no editor that reviews each post and makes sure it is up to a certain degree of quality. Everything comes from the writer with no filter in between. I

Identities can be kept anonymous online so it is common for people to use the virtual community to live out a fantasy as another type of person. Users should be wary of where information is coming from online and be careful to double check facts with professionals.

Information online is different from information discussed in a real-life community because it is permanently online. As a result, users must be careful what information they disclose about themselves to ensure they are not easily identifiable, for safety reasons.

Collaboration Platform. A category of business software that adds broad social networking capabilities to work processes.  The goal of a collaboration software application is to foster innovation by incorporating knowledge management into business processes so employees can share information and solve business problems more efficiently. Collaboration platforms could be proprietary or open

source or free software, and used in wider information and communication environments.

Third-party Marketplaces. Online marketplaces that allow sellers to offer their goods alongside another marketplace, such as Amazon.com.

Value-chain Integrators - offer a range of services across the value chain. Value-chain Service Providers. A business model describing the dissemination of

value-generating information services throughout an Extended Enterprise. This value chain begins with the content supplied by the provider, which is then distributed and supported by the information infrastructure; thereupon the context provider supplies actual customer interaction. It supports the physical value chain of procurement, manufacturing, distribution and sales of traditional companies. They specialize in providing functions for a specific part of the value chain, such as the logistics company UPS(www.ups.com)

Information Brokerage - provide information for consumers and businesses, often to assist in making the buying decision or for business operations or leisure. An information broker, also known as an independent information professional or information consultant, is a person or business that researches information for clients. Common uses for information brokers include market research and patent searches, but can include practically any type of information research.

Telecommunication. The transmission of messages, over significant distances, for the purpose of communication. In earlier times, telecommunications involved the use of visual signals, such as beacons, smoke, semaphore telegraphs, signal flags, and optical heliographs, or audio messages via coded drumbeats, lung-blown horns, or sent by loud whistles, for example. In the modern age of electricity and electronics, telecommunications now also includes the use of electrical devices such as telegraphs, telephones, and teletypes, the use of radio and microwave communications, as well as fiber optics and their associated electronics, plus the use of the orbiting satellites and the Internet.

Customer relationship Trust and other services – examples of trust services include Internet Shopping is

Safe (ISIS) (www.imrg.org/isis) or TRUSTe(www.truste.org)which authenticate the quality of service provided by companies trading on the web.

E-Business Classification According to Provider and Consumer Business-to-Business (B2B). Describes commerce transactions between

businesses, such as between a manufacturer and a wholesaler, or between a wholesaler and a retailer. Contrasting terms are business-to-consumer (B2C) and business-to-government (B2G). B2B branding is a term used in marketing.

Business-to-Consumer (B2C). Business-to-Employee (B2E). An intrabusiness network which allows companies

to provide products and/or services to their employees. Typically, companies use B2E networks to automate employee-related corporate processes.

Business-to-Government (B2G) Government-to-Business (G2B) Government-to-Government (G2G). The online non-commercial interaction

between Government organizations, departments, and authorities and other Government organizations, departments, and authorities.

Government-to-Consumer (G2C). The communication link between a government and private individuals or residents. Such G2C communication most often refers to that which takes place through Information and Communication Technologies (ICTs), but can also include direct mail and media campaigns.

Consumer-to-Business (C2B) Consumer-to-Consumer (C2C)

Service. A set of one-time consumable and perishable benefits

Delivered from accountable service provider, mostly in coaction with his internal and external service suppliers.

Effectuated by distinct functions of technical systems and by distinct activities of individuals, respectively.

Commissioned according to the needs of is service consumers by the service customer from the accountable service provider.

Rendered individually to an authorized service consumer at his/her dedicated trigger.

Consumed and utilized by the triggering service consumer for executing his/her upcoming business activity or private activity.

12 Standard Attributes of Service Specification Which Conform to the MECE (Mutually Exclusive, Collectively Exhaustive) Principle

1. Service Consumer Benefits – describe the (set of) benefits which are triggerable, consumable and effectively utilizable for any authorized service consumer and which are rendered to him as soon as he triggers one service. The description of these benefits must be phrased

2. Service Specific Functional Parameters - specify the functional parameters which are essential and unique to the respective service and which describe the most important dimension(s) of the servicescape, the service output or the service outcome, e.g. maximum e-mailbox capacity per registered and authorized e-mailing service consumer.

3. Service Delivery Point - describes the physical location and/or logical interface where the benefits of the service are triggered from and rendered to the authorized service consumer. At this point and/or interface, the preparedness for service delivery readiness can be assessed as well as the effective delivery of each triggered service can be monitored and controlled.

4. Service Consumer Count - specifies the number of intended, clearly identified, explicitly named, definitely registered and authorized service consumers which shall be and/or are allowed and enabled to trigger and consume the commissioned service for executing and/or supporting their business tasks or private activities.

5. Service Delivering Readiness Times - specify the distinct agreed times of every day of the week when a. the described service consumer benefits are

i. triggerable for the authorized service consumers at the defined service delivery pointii. consumable and utilizable for the authorized service consumers at the respective agreed

service levelb. all the required service contributions are aggregated to the triggered servicec. the specified service benefits are competely and terminally rendered to any authorized

triggering service consumer without any delay or friction. The time data are specified in 24 h format per local working day and local time UTC, referring to the location of the intended and/or triggering service consumers.

6. Service Consumer Support Times - specify the determined and agreed times of every day of the week when the triggering and consumption of commissioned services is supported by the service desk team for all identified, registered and authorized service consumers within the service customer's organizational unit or area. The service desk is/shall be the so-called the Single Point of Contact (SPoC) for any authorized service consumer inquiry regarding the commissioned, triggered and/or rendered services, particularly in the event of service denial, i.e. an incident. During the defined service consumer support times, the service desk can be reached by phone, e-mail, web-based entries, and fax, respectively. The time data are specified in 24 h format per local working day and local time UTC, referring to the location of the intended service consumers.

7. Service Consumer Support Language - specifies the national languages which are spoken by the service desk team(s) to the service consumers calling them.

8. Service Fulfillment Target - specifies the service provider's promise of effectively and seamlessly deliver the specified benefits to any authorized

service consumer triggering a service within the specified service delivery readiness times. It is expressed as the promised minimum ratio of the count of successful individual service deliveries related to the count of triggered service deliveries. The effective service fulfillment ratio can be measured and calculated per single service consumer or per service consumer group and may be referred to different time periods (workhour, workday, calenderweek, workmonth, etc.)

9. Service Impairment Duration Per Incident - specifies the maximum allowable elapsing time [hh:mm] betweena. the first occurrence of a service impairment, i.e. service quality degradation, service delivery

disruption or service denial, whilst the service consumer consumes and utilizes the requested service,

b. the full resumption and complete execution of the service delivery to the content of the affected service consumer.

10. Service Delivering Duration - specifies the promised and agreed maximum allowable period of time for effectively rendering all specified service consumer benefits to the triggering service consumer at his currently chosen service delivery point.

11. Service Delivery Unit - specifies the basic portion for rendering the defined service consumer benefits to the triggering service consumer. The service delivery unit is the reference and mapping object for the Service Delivering Price, for all service costs as well as for charging and billing the consumed service amounts to the service customer who has commissioned the service delivery.

12. Service Delivering Price - specifies the amount of money the commissioning service customer has to pay for a distinct service delivery unit or for a distinct amount of service delivery units. Normally, the service delivering price comprises two portionsa. a fixed basic price portion for basic efforts and resources which provide accessibility and

usability of the service delivery functions, i.e. service access priceb. a price portion covering the service consumption based on

i. fixed flat rate price per authorized service consumer and reference period for an unlimited amount of consumed services,

ii. staged prices per authorized service consumer and reference period for staged amounts of consumed services,

iii. fixed price per single consumed service delivering unit.

Service Encounter. All activities involved in the service delivery process.

Key Characteristics of Services (“The Five I’s of Services) Intangibility. Services are intangible and insubstantial: They cannot be

touched, gripped, handled, looked at, smelled, tasted. Thus, there is neither potential nor need for transport, storage or stocking of services. Furthermore, a service can be (re)sold or owned by somebody, but it cannot be turned over from the service provider to the service consumer. Solely, the service delivery can be commissioned to a service provider who must generate and render the service at the distinct request of an authorized service consumer.

Inventory (Perishability). Services have little or no tangible components and therefore cannot be stored for a future use. Services are produced and consumed during the same period of time.

Services are perishable in two regardso The service relevant resources, processes and systems are assigned for

service delivery during a definite period in time. If the designated or scheduled service consumer does not request and consume the service during this period, the service cannot be performed for him. From the perspective of the service provider, this is a lost business opportunity as he cannot charge any service delivery; potentially, he can assign the resources, processes and systems to another service consumer who

requests a service. Examples: The hair dresser serves another client when the scheduled starting time or time slot is over. An empty seat on a plane never can be utilized and charged after departure.

o When the service has been completely rendered to the requesting service consumer, this particular service irreversibly vanishes as it has been consumed by the service consumer. Example: the passenger has been transported to the destination and cannot be transported again to this location at this point in time.

Inseparability. The service provider is indispensable for service delivery as he must promptly generate and render the service to the requesting service consumer. In many cases the service delivery is executed automatically but the service provider must preparatorily assign resources and systems and actively keep up appropriate service delivery readiness and capabilities. Additionally, the service consumer is inseparable from service delivery because he is involved in it from requesting it up to consuming the rendered benefits. Examples: The service consumer must sit in the hair dresser's shop & chair or in the plane & seat; correspondingly, the hair dresser or the pilot must be in the same shop or plane, respectively, for delivering the service.

Inconsistency (Variability). Each service is unique. It is one-time generated, rendered and consumed and can never be exactly repeated as the point in time, location, circumstances, conditions, current configurations and/or assigned resources are different for the next delivery, even if the same service consumer requests the same service. Many services are regarded as heterogeneous or lacking homogeneity and are typically modified for each service consumer or each new situation (consumerised). Example: The taxi service which transports the service consumer from his home to the opera is different from the taxi service which transports the same service consumer from the opera to his home – another point in time, the other direction, maybe another route, probably another taxi driver and cab.

Involvement. One of the most important Characteristic of services is the participation of the customer in the service delivery process. A customer has the opportunity to get the services modified according to specific requirement.

Six Factors in the Delivery of Service The accountable service provider and his service suppliers (e.g. the people) Equipment used to provide the service (e.g. vehicles, cash registers, technical

systems, computer systems) The physical (e.g. buildings, parking, waiting rooms) The requesting service consumer Other customers at the delivery location Customer contact.

List of Economic Services Business Functions (that apply to all organizations in general)

o Management Consulting. The practice of helping organizations to improve their performance, operates primarily through the analysis of existing organizational problems and the development of plans for improvement.

o Customer Service. The provision of service to customer before, during and after a purchase. According to Turban et al. (2002), “Customer service is a series of activities designed to enhance the level of satisfaction – that is, the feeling that a product or service has met the customer satisfaction.

o Human Resources Administrators (providing services like ensuring that employees are paid accurately). The set of individuals who make up the workforce of an organization, business sector, or economy. “Human capital” is sometimes used synonymously with human resources, although human capital typically refers to a more narrow view (i.e., the

knowledge the individuals embody and can contribute to an organization. Likewise, other terms sometimes used include “manpower”, “labor”, “or simply “people”.

Child care (a.k.a. childcare, child minding, daycare, or preschool). The caring for and supervision of a child or children, usually from age six weeks to age thirteen. It is the action or skill of looking after children by a day-care center, babysitter, or other providers.

Cleaning, repair and maintenance serviceso Janitors (who provide cleaning services)o Gardenerso Mechanics

Constructiono Carpentryo Electricians (offering the service of making wiring work properly)o Plumbing

Death Careo Coroners (who provide the service of identifying cadavers and

determining time and cause of death)o Funeral Homes (who prepare corpses for public display, cremation or

burial) Dispute Resolution and Prevention Services

o Arbitrationo Courts of Law (who perform the service of dispute resolution backed by

the power of the state)o Diplomacyo Incarceration (provides the service of keeping criminals out of society)o Law Enforcement (provides the service of identifying and apprehending

criminals)o Lawyers (who perform the services of advocacy and decisionmaking in

many dispute resolution and prevention processes).o Mediationo Military (performs the service of protecting states in disputes with other

states.o Negotiation (not really a service unless someone is negotiating on

behalf of another) Education

o Libraryo Museumo School

Entertainment (when provided live or within a highly specialized facility)o Gamblingo Movie Theatres (providing the service of showing a movie on a big

screen)o Performing Arts Productionso Sexual Serviceso Sporto Television

Fabric Careo Dry Cleaningo Self-Service Laundry (offering the service of automated fabric cleaning)

Financial Serviceso Accountancyo Banks and building societies (offering lending services and safekeeping

of money and valuables)o Real Estateo Stock Brokerageso Tax Preparation

Foodservice Industry Personal Grooming

o Hairdressingo Manicurist/pedicuristo Body Hair Removalo Dental Hygienist

Health Care (all health care professions provide services) Hospitality Industry Information Services

o Data Processingo Database Serviceso Interpretingo Translation

Risk Managemento Insuranceo Security

Social Serviceso Social Work

Transport Public Utility

o Electric Powero Natural Gaso Telecommunicationso Waste Management o Water Industry (provides drinking water and wastewater services

(including sewage treatment) to residential, commercial, and industrial sectors of the economy. The water industry includes manufacturers and suppliers of bottled water.

Service-Goods Continuum

There has been a long academic debate on what makes services different from goods. The historical perspective in the late-eighteen and early-nineteenth centuries focused on creation and possession of wealth. Classical economists contended that goods were objects of value over which ownership rights could be established and exchanged. Ownership implied tangible possession of an object that had been acquired through purchase, barter or gift from the producer or previous owner and was legally identifiable as the property of the current owner.

Adam Smith’s famous book, The Wealth of Nations, published in Great Britain in 1776, distinguished between the outputs of what he termed "productive" and "unproductive" labor. The former, he stated, produced goods that could be stored after production and subsequently exchanged for money or other items of value. The latter, however useful or necessary, created services that perished at the time of production and therefore did not contribute to wealth. Building on this theme, French economist Jean-Baptiste Say argued that production and consumption were inseparable in services, coining the term "immaterial products" to describe them.

Most modern business theorists see a continuum with pure service on one terminal point and pure commodity good on the other terminal point.[1] Most products fall between these two extremes. For example, a restaurant provides a physical good (the food), but also provides services in the form of ambience, the setting and clearing of the table, etc. And although some utilities actually deliver physical goods — like water utilities which actually deliver water — utilities are usually treated as services.

In a narrower sense, service refers to quality of customer service: the measured appropriateness of assistance and support provided to a customer. This particular usage occurs frequently in retailing.

Service-Goods Continuum

E-Business Tools: (http://www.dob.nt.gov.au/business/starting-business/ebusiness/pages/ebusiness.aspx)

Mobile Phones Personal Digital Assistants (PDAs) Electronic Data Interchange (EDI) File Transfer Facsimile Video Conferencing, Internet, intranets and extranets.

Activities using eBusiness Tools (http://www.dob.nt.gov.au/business/starting-business/ebusiness/pages/ebusiness.aspx)

Trading of goods or services online, such as eProcurement, primarily through websites

Electronic Retailing (eTailing) Use of the Internet, intranets or extranets to conduct research and manage

business activities Website Marketing Online Communications, such as email Online Training for Staff (eLearning).

A value chain is a chain of activities that a firm operating in a specific industry performs in order to deliver a valuable product or service for the market. The concept comes from business management and was first described and popularized by Michael Porter in his 1985 best-seller, Competitive Advantage: Creating and Sustaining Superior Performance.

Product Defined- In marketing, it is anything that can be offered to a market that might satisfy a want or need.

- In retailing, products are called merchandise.- In manufacturing, products are bought as raw materials and sold as finished goods. Commodities are usually raw materials such as metals and agricultural products, but a commodity can also be anything widely available in the open market. - In project management, products are the formal definition of the project deliverables that make up or contribute to delivering the objectives of the project.- In insurance, the policies are considered products offered for sale by the insurance company that created the contract.- In economics and commerce, products belong to a broader category of goods. The economic meaning of product was first used by political economist Adam Smith.

A related concept is subproduct, a secondary but useful result of a production process.

Product Classification Tangible product is a physical object that can be perceived by touch such as a

building, vehicle, gadget, or clothing. Intangible product is a product that can only be perceived indirectly such as

an insurance policy.

A market is one of the many varieties of systems, institutions, procedures, social relations and infrastructures whereby parties engage in exchange. While parties may exchange goods and services by barter, most markets rely on sellers offering their goods or services (including labor) in exchange for money from buyers. It can be said that a market is the process by which the prices of goods and services are established.Marketing is the process of communicating the value of a product or service to customers, for the purpose of selling that product or service.

A customer (sometimes known as a client, buyer, or purchaser) is the recipient of a good, service, product, or idea, obtained from a seller, vendor, or supplier for a monetary or other valuable consideration. Customers are generally categorized into two types:

An intermediate customer or trade customer (more informally: "the trade") who is a dealer that purchases goods for re-sale.

An ultimate customer who does not in turn re-sell the things bought but either passes them to the consumer or actually is the consumer.

A customer may or may not also be a consumer, but the two notions are distinct, even though the terms are commonly confused. A customer purchases goods; a consumer uses them. An ultimate customer may be a consumer as well, but just as equally may have purchased items for someone else to consume. An intermediate customer is not a consumer at all. The situation is somewhat complicated in that ultimate customers of so-called industrial goods and services (who are entities such as government bodies, manufacturers, and educational and medical institutions) either themselves use up the goods and services that they buy, or incorporate them into other finished products, and so are technically consumers, too. However, they are rarely called that, but are rather called industrial customers or business-to-business customers. Similarly, customers who buy services rather than goods are rarely called consumers.

Six Sigma doctrine places (active) customers in opposition to two other classes of people: not-customers and non-customers. Whilst customers have actively dealt with a business within a particular recent period that depends from the product sold, not-customers are either past customers who are no longer customers or potential customers who choose to do business with the competition, and non-

customers are people who are active in a different market segment entirely. Geoff Tennant, a Six Sigma consultant from the United Kingdom, uses the following analogy to explain the difference: A supermarket's customer is the person buying milk at that supermarket; a not-customer is buying milk from a competing supermarket, whereas a non-customer doesn't buy milk from supermarkets at all but rather "has milk delivered to the door in the traditional British way".

Tennant also categorizes customers another way, that is employed out with the fields of marketing. Whilst the intermediate/ultimate categorization is used by marketers, market regulation, and economists, in the world of customer service customers are categorized more often into two classes:

An external customer of an organization is a customer who is not directly connected to that organization.

An internal customer is a customer who is directly connected to an organization, and is usually (but not necessarily) internal to the organization. Internal customers are usually stakeholders, employees, or shareholders, but the definition also encompasses creditors and external regulators.

The notion of an internal customer — before the introduction of which external customers were, simply, customers — was popularized by quality management writer Joseph M. Juran, who introduced it in the fourth edition of his Handbook (Juran 1988). It has since gained wide acceptance in the literature on total quality management and service marketing; and the customer satisfaction of internal customers is nowadays recognized by many organizations as a precursor to, and prerequisite for, external customer satisfaction, with authors such as Tansuhaj, Randall & McCullough 1991 arguing that service organizations that design products for internal customer satisfaction are better able to satisfy the needs of external customers.[13] Research on the theory and practice of managing the internal customer continues today in a variety of service sector industries.[14][15]

Retail is the sale of goods and services from individuals or businesses to the end-user. Retailers are part of an integrated system called the supply chain. A retailer purchases goods or products in large quantities from manufacturers directly or through a wholesale, and then sells smaller quantities to the consumer for a profit. Retailing can be done in either fixed locations like stores or markets, door-to-door or by delivery. In the 2000s, an increasing amount of retailing is done using online websites, electronic payment, and then delivered via a courier or via other services.

Retailing includes subordinated services, such as delivery. The term "retailer" is also applied where a service provider services the needs of a large number of individuals, such as for the public. Shops may be on residential streets, streets with few or no houses or in a shopping mall. Shopping streets may be for pedestrians only. Sometimes a shopping street has a partial or full roof to protect customers from precipitation. Online retailing, a type of electronic commerce used for business-to-consumer (B2C) transactions and mail order, are forms of non-shop retailing.

Shopping generally refers to the act of buying products. Sometimes this is done to obtain necessities such as food and clothing; sometimes it is done as a recreational activity. Recreational shopping often involves window shopping (just looking, not buying) and browsing and does not always result in a purchase.

Manufacturing is the production of merchandise for use or sale using labor and machines, tools, chemical and biological processing, or formulation. The term may refer to a range of human activity, from handicraft to high tech, but is most commonly applied to industrial production, in which raw materials are transformed into finished goods on a large scale. Such finished goods may be used for manufacturing other, more complex products, such as aircraft, household

appliances or automobiles, or sold to wholesalers, who in turn sell them to retailers, who then sell them to end users – the "consumers".

Manufacturing takes turns under all types of economic systems. In a free market economy, manufacturing is usually directed toward the mass production of products for sale to consumers at a profit. In a collectivist economy, manufacturing is more frequently directed by the state to supply a centrally planned economy. In mixed market economies, manufacturing occurs under some degree of government regulation.

Modern manufacturing includes all intermediate processes required for the production and integration of a product's components. Some industries, such as semiconductor and steel manufacturers use the term fabrication instead.

The manufacturing sector is closely connected with engineering and industrial design. Examples of major manufacturers in North America include General Motors Corporation, General Electric, Procter & Gamble, General Dynamics, Boeing, and Pfizer. Examples in Europe include Volkswagen Group, Siemens, and Michelin. Examples in Asia include Toyota, Samsung, and Bridgestone.

Some Key Terms

Business Model. The organization of product, service and information flows and the source of revenues and benefits for suppliers and customers.

Value Chain. A chain of activities that a firm operating in a specific industry performs in order to deliver a valuable product or service for the market.

Third Party. Someone not directly involved in a transaction. A third entity in the Seller (first party) and Customer (second party) relationship.

E-Commerce constitutes the exchange of products and services between businesses, groups, individuals and can be seen as one of the essential activities of any business. It focuses on the use of ICT to enable the external activities and relationships of the business with the individuals, groups, and other businesses. Basically, e-commerce is the process of buying, transferring, or exchanging

products, services, and/or information via computer, including the Net. It can also be beneficial from many perspectives including business process, service, learning, collaborative community.

Brick and Mortar (B&M) – describes the physical presence of a building(s) or other structure. B&M business is often used to refer to a company that possesses buildings, product facilities, or store for operations. The name is metonym derived from the traditional building materials associated with physical buildings: brick and mortar. The term was first used in 1992.

Demography. The statistical study of human populations. It encompasses the study of the size, structure, and distribution of these populations, and spatial and/or temporal changes in them in response to birth, migration, aging, and death. “Demo-” from Ancient Greek δῆμος dēmos, means “the people” and “-graphy” from γράφω graphō, means “measurement.”

Metonym. A figure of speech in which a thing is called not by its own name, but rather by name of something associated in meaning with that thing or concept. Or, a word or phrase used in a figure or speech in which an attribute of something is used to stand for the thing itself (e.g. “laurels” when it is used to stand for “glory”).

Mobile Commerce (M-Commerce). The purchasing from an online retailer’s mobile optimized online site or application. Or, electronic transactions and communications conducted using mobile devices such as laptops, PDAs and mobile phones, and typically with a wireless connection.

Social Network. A site that facilitates peer-to-peer communication within a group or between individuals through providing facilities to develop user-generated content (UGC) and to exchange messages and comments between different users.

Virtual World. An electronic environment which simulates interactions between online characters known as avatars. Also known as Massively Multiplayer Online Roleplaying Games (MMORPG).

Blog. Personal online diary, journal or news source compiled by one person, an internal team or external guest authors. Postings are usually in different categories. Typically comments can be added to each blog posting to help create interactivity and feedback.

Rich Media. Digital assets such as ads are not static images, but provide animation, audio or interactivity as a game or form to be completed.

Broadband. The wide bandwidth characteristics of a transmission medium and its ability to transport multiple signals and traffic types simultaneously. The medium can be coax, optical fiber, twisted pair, DSL local telephone networks or wireless. In contrast, baseband describes a communication system in which information is transported across a single channel.

First-Mover Advantage, or FMA. The advantage gained by the initial ("first-moving") significant occupant of a market segment. It may be also referred to as Technological Leadership. This advantage may stem from the fact that the first entrant can gain control of resources that followers may not be able to match.Business Process/Method. A collection of related, structured activities or tasks that produce a specific service or product (serve a particular goal) for a particular customer or customers. It often can be visualized with a flowchart as a sequence of activities with interleaving decision points or with a Process Matrix as a sequence of activities with relevance rules based on data in the process.

Effectiveness. The capability of producing a desired result. It is doing the right things. It is a relatively vague, non-quantitative concept, mainly concerned with achieving objectives.

Efficiency. The ability to do something well or achieve a desired result without wasted energy or effort. It is doing things right and describes the extent to which time, effort or cost is well used for the intended task or purpose. It is a measurable concept, quantitatively determined by the ratio of output to input.

Product. Anything that can be offered to a market that might satisfy a want or need. In retailing, products are called merchandise. In manufacturing, products are bought as raw materials and sold as finished goods. Products belong to a broader category of goods.

Transaction. An exchange, or an instance where business is done or something is bought or sold.

Marketplace. A place where things are sold.

Goods. Articles for sale or use, often those produced for later consumption, as opposed to services.

Raw Material (or Feedstock). The basic material from which goods, finished products or intermediate materials (that are themselves feedstock for finished products are manufactured or made.

Retail. The sale of goods and services from individuals or businesses to the end-user. Retailers are part of an integrated system called the supply chain. A retailer purchases goods or products in large quantities from manufacturers directly or through a wholesale, and then sells smaller quantities to the consumer for a profit. Retailing can be done in either fixed locations like stores or markets, door-to-door or by delivery. In the 2000s, an increasing amount of retailing is done using online websites, electronic payment, and then delivered via a courier or via other services.

Internet Protocol (IP). The method or protocol by which data is sent from one computer to another on the Internet. It the principal communications protocol in the Internet protocol suite for relaying datagrams across network boundaries. Perhaps, it is the world's most popular open-system (nonproprietary) protocol suite because they can be used to communicate across any set of interconnected networks and are equally well suited for LAN and WAN communications. The Internet protocols consist of a suite of communication protocols, of which the two best known are the Transmission Control Protocol (TCP) and the Internet Protocol (IP). A protocol is an agreed-upon format for transmitting data between two devices. It determines type of error checking and data compression used.

End User. A person or group that is one of the ultimate consumers or users that a product has been designed for.

Merchandise. Goods bought and sold for profit.