The Transforming Power of Business-to-Business Electronic Business  

Abstract Category: I.T.
Course / Degree: Master Thesis
Institution / University: Johannes Kepler University, Austria
Published in: 2002

Thesis Abstract / Summary:

The goals of this chapter are:
·Introducing B2B e-Business and its relevance for economic development.
·Presenting the major areas addressed in this paper.
·Presenting the major objectives of this paper.
·Presenting the major limitations for research and discussion.

1.1 Internet based B2B e-Business - the rise of a new economic era

The Internet and its applications are the most ruling and fascinating topics in todays business world and will stay at the forefront of economic evolution for a long period of time. Internet technology provides new and frame breaking ways to communicate, interact, transact, and globalise and hence to create new competitive advantages at any level of economic activities, nearly equal for businesses all around the world.

"The most powerful thing in the world is an idea whose time has come." (Victor Hugo)

The widespread acceptance and adoption of the Internet, Extranets and Intranets as business platforms created a solid foundation for the development of business-to-business electronic business [B2B e-Business] which enables organisations to lower costs and improve customer value in dramatic and unprecedented ways (cf. Timmers, 1999). B2B e-Business heralds the real Internet Revolution in business – the advent of the e-Economy where new ways of collaboration are transforming the creation of wealth. Constructive destruction and reintegration of traditional value chains and value systems are leading the way into a networked & globalized Economy, where modular organisations are competing in virtual markets (Figure 1?1). Customer needs, speed and flexibility are the ultimate rules in an emerging competitive environment beyond the traditional perception of sectors, industries and political economies. Traditional borders between people, organisations and nations vanish and electronically integrated value systems start to act and compete virtually as single corporations. In the long run, B2B e-Business has a direct or indirect impact on all functional areas and linkages within a value chain and across the respective value system, i.e. B2B e-Business is shaping and transforming the economy as whole - on the microeconomic as well as on the macroeconomic level.

Reading these lines, many practitioners immediately would state that this description is not more than a vague picture of a far future and that the Internet Revolution in business still remains to be seen. There is no doubt about the fact that it still remains to be seen. But the reason is that the incorporation of the Internet and Internet technology into corporate strategies and day-to-day operations is not a revolution changing the world from one day to another. It is, in fact, an evolutionary process where trial & error are dominating the development. In this paper this process will be called e-Business Transformation.

Given the fact that we are just at the beginning of this e-Volution, there is an undeniable need for traditional companies – commonly known as the Old-Economy - to analyse and refocus their goals, corporate strategies, organisational structures, and business processes toward and around the Internet and its opportunities to gain and sustain competitive advantage. However, there is still a long way to go as for most companies B2B e-Business is still a terra incognita waiting to be explored.
The following simple but holistic definition of e-Business by Kalakota and Robinson anticipates the magnitude and complexity of this field and serves well as a foundation for future research and development:

·e-Business means doing business electronically (2000) .


·B2B e-Business means doing business between firms electronically.

B2B e-Business, as defined in this paper, is a concept based on real and virtual intra-organisational and inter-organisational networks of people, information, and business application programs using electronic communication media such as the Internet to create and execute all possible kinds of communication between business partners and the corresponding flow of data.

B2B e-Business represents the next stage in the evolution of the commonly held principle of the division of labour on the microeconomic as well as on the macroeconomic level. Networks of (small / medium sized / large-scale) highly specialised and integrated, independent operational modules and networks, in organisational, technical and legal terms, have started to replace huge, vertically integrated corporations which have been ruling the business world for more than a century (cf. Kalakota & Robinson, 2000).

Why? At the end of the day the objectives are creating new sustainable competitive advantages through cutting costs and increasing customer satisfaction and thus sales. This is a new variety of the classic problem of optimisation. The principles of constructive destruction standardisation and (re-)integration are the underlying concepts. The fact that this is done in a rather frame-breaking way is a welcome side effect but not the ruling idea.

Thesis Keywords/Search Tags:
e-Business, e-Commerce, B2B, Strategic Management, Internet, Value Chain, Vlaue System, electronic business, electronic commerce

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Thesis Images:
I.T. - The Transforming Power of Business-to-Business Electronic Business Figure 1.1: Electronic business environment - the e-Economy
(click to enlarge)


Submission Details: Thesis Abstract submitted by Christoph WENNA from Austria on 21-Jan-2004 17:50.
Abstract has been viewed 3495 times (since 7 Mar 2010).

Christoph WENNA Contact Details: Email: office@wenna.com

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