Definition


	Electronic Commerce Defined

Electronic commerce, in not a new phenominon. It has existed in various forms for some time. Early examples include electronic order processing systems (e.g., ASAP by American Hospital Supply Corporation) and airline reservation systems (e.g., SABRE by American Airlines). More recently, it has taken the form of inter-organizational systems (IOS) and electronic data interchange (EDI). The term Electronic Commerce today has a very different meaning, however, and modern EC applications differs significantly from their earlier counterparts. HIstorically, EC typically was based on proprietary/private newtorks and technologies, implemented by largeorganizations, was expensive, and had a narrow scope. By contrast, EC today is based on public networks (Internet) that are generally widely accessable, are less expensive, are utilized by a variety of organizaitons for a variety of applications. These differences are summarized in the following table:

Characteristic	Traditional EC	Modern EC
Technology	Proprietary / complex	Public / Simple
Focus	Inter-organizational systems	Inter-organizational and consumer oriented
Applications	Few, narrow scope	Numerous, wide ranging
Users	Large organizations	All organizations and consumers
Cost	Relatively high	Relatively low

Organizations are getting "on-line" to experiment with this concept of EC and are transforming almost every facet of their businesses such asadvertising, order processing and, in some cases, product/service delivery. Available Internet tools such as electronic mail (e-mail), real-time voice and video conferencing and the world wide web (WWW) are influencing theway organizations communicate, deliver information and interact with suppliers and customers, and are giving rise to virtual organizations and marketplaces. Emerging multimedia tools, virtual reality modeling, and the ability to interactively control processes across networks, will further transform organizations in the near future.


	Electronic Commerce can mean different things to different people and no widely accepted definition of EC has evolved. In this section we will consider several senarios that represent commercial activities on the Internet and attempt to develop a definition of EC. We will next assess the significance of EC to business organizations. Finally, we will introduce a framework for understanding EC.


	The term Electronic Commerce can mean very different things to different people. Some people take the micro view, with a focus on transactions processing, while other take a macro view to include all activities associated with running a business.


	The transactions (micro) view suggests that for something to be considered EC, it must directly support some business transaction, such as the sale of a product or service. This is really an extension of the traditional EDI concept. The primary difference is the use of public networks instead of proprietary ones.


	The business (macro) view suggests that activities other than transaction processing are critical to a business as well. Organizations include various functional areas, such as finance and marketing and numerous processes such as order processing and production. Thus, an electronic (Internet-based) support for an organization's functions and processes are considered EC.


	In addition, there are several other definitions that fall in between these two extreme views. The appropriate definition is really a function of the circumstances. For the study of EC, we will take the macro view to permit the broadest possible understanding of this phenomenon.




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