Understanding

Understanding Electronic Commerce

Success stories abound, such as the small town bookstore that went global and the bread and breakfast house that gets nearly half it's business via the Internet. However, only a small percent of organizations are profiting from electronic commerce, although most expect to be profitable in the near future. Electronic commerce tools and technologies are new and fragmented and are evolving at a breathtaking pace. Most organizations have little experience with these technologies and the constant changes make it difficult, if not impossible for most to fully understand how to integrate them in their business environment. At the same time, potential customers and clients of most organizations do not have easy access to the necessary technology, and in many cases have never heard of this brave new electronic world. In addition, critical issues involving security, privacy and censorship, intellectual property and others remain unresolved and the rules governing the use of these technologies are unclear.

Organizations exploring the possibilities with EC stand to gain significant competitive advantages. However, they must first understand the potential applications of these tools, answer serious questions regarding how and why these applications are potentially valuable, recognize and overcome potential risks and address critical issues. This is depicted in the figure below.