E-commerce is a subset of e-business, which includes both external and internal processes. E-commerce involves exchanging money for goods or services, while e-business includes customer retention, inventory management, and marketing strategies. A strong e-commerce division is vital to a company’s longevity.
The key difference between e-commerce and e-business is the fact that e-commerce is a division of the larger e-business world and only comprises the external aspects of electronic business. These external processes include all aspects of e-business involving customers, suppliers and peripheral partners. The broadest definition of e-business involves these external processes as well as internal ones. Examples of internal procedures include finance, inventory control, manufacturing processes, human resources and web development.
At a very basic level, electronic commerce means exchanging money for goods or services over electronic networks. But while the actual selling falls under the category of e-commerce, the activity of educating, retaining and attracting new customers is considered e-business. E-commerce is an integral part of your entire e-business strategy, but it’s only one feature of your e-business plan.
There are several elements to e-commerce and e-commerce that make them significantly different from each other; however, when you work together, you directly influence each other’s results. E-commerce focuses only on the parts of e-commerce that a consumer, supplier or external partner will interact with. Customer service, sales, order picking and delivery, commercial web applications, and the procurement of manufacturing materials and office supplies are all outward-facing processes and are therefore classified as e-commerce.
For small businesses or businesses in the startup stage, the difference between e-commerce and e-business may not be of much concern. After all, the goal of the new business is to generate interest and sell products or services. But as the business grows, so does the company’s outlook. Issues such as customer retention, inventory management and marketing strategies become critical to the company’s continued success. In a large company, the focus is on these behind-the-scenes aspects, creating a larger e-business model; if the company fails to focus on these aspects, the company’s future could be at risk.
Creating an e-business strategy highlights the differences between e-commerce and e-business. This broader scope often means retooling an entire company. Finding the right time to undertake such a structural transformation is crucial to its success. New perspectives will be considered, responsibilities within the company will change hands and deeper knowledge of electronic network technologies will be learned.
Internet marketers and business specialists tend to agree that having an e-business plan with a strong e-commerce division is vital to a company’s longevity. Governments have also been advised to get into the e-business game. A government’s master plan is referred to as an e-public service strategy, of which e-commerce plays a part.
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