Due to Internet capabilities and web technology, traditional business organization definition has undergone a change where scope of the enterprise now includes other company locations, business partners, customers and vendors.
- It has no geographic boundaries as it can extend its operations where Internet works. All this is possible due to Internet and web moving traditional paper driven organization to information driven Internet enabled E-business enterprise.
- E-business enterprise is open twenty-four hours, and being independent, managers, vendors; customers transact business anytime from anywhere. Internet capabilities have given E-business enterprise a cutting edge capability advantage to increase the business value.
- It has opened new channels of business as buying and selling can be done on Internet.
- It enables to reach new markets across the world anywhere due to communication capabilities.
- It has empowered customers and vendors / suppliers through secured access to information to act, wherever necessary.
- The cost of business operations has come down significantly due to the elimination of paper-driven processes, faster communication and effective collaborative working. The effect of these radical changes is the reduction in administrative and management overheads, reduction in inventory, faster delivery of goods and services to the customers.
- In E-business enterprise traditional people organization based on 'Command Control' principle is absent.
- It is replaced by people organization that is empowered by information and knowledge to perform their role.
- They are supported by information systems, application packages, and decision-support systems.
- It is no longer functional, product, and project or matrix organization of people but E-organization where people work in network environment as a team or work group in virtual mode.
- E-business enterprise is more process-driven, Technology-enabled and uses its own information and knowledge to perform. It is lean in number, flat in structure, broad in scope and a learning organization.
- In E-business enterprise, most of the things are electronic, use digital technologies and work on databases, knowledge bases, directories and document repositories.
The business processes are conducted through enterprise software like ERP, SCM, and CRM supported by data warehouse, decision support, and knowledge management systems. Today most of the business organizations are using Internet technology, network, and wireless technology for improving the business performance measured in terms of cost, efficiency, competitiveness and profitability. They are using E-business, Ecommerce solutions to reach faraway locations to deliver product and services. The enterprise solutions like ERP, SCM, and
CRM run on Internet (Internet / Extranet) & Wide Area Network (WAN).
The business processes across the organization and outside run on E-technology platform using digital technology. Hence today's business firm is also called E-enterprise or Digital firm. The paradigm shift to E-enterprise has brought four transformations, namely:
- Domestic business to global business
- Industrial manufacturing economy to knowledge-based service economy
- Enterprise Resource Management to Enterprise Network Management
- Manual document driven business process to paperless, automated, electronically transacted business process.
These transformations have made conventional organization design obsolete. In E-enterprise, business is conducted electronically. Buyers and sellers through Internet drive the market and Internet-based web systems. Buying and selling is possible on Internet. Books, CDs, computer, white goods and many such goods are bought and sold on Internet.
The new channel of business is well-known as Ecommerce. On the same lines, banking, insurance, healthcare are being managed through Internet E-banking, E-billing, E-audit, & use of Credit cards, Smart card, ATM, E-money is the examples of the Ecommerce application. The digital firm, which uses Internet and web technology and uses E-business and Ecommerce solutions, is a reality and is going to increase in number.
MIS for E-business is different compared to conventional MIS design of an organization. The role of MIS in E-business organization is to deal with changes in global market and enterprises. MIS produces more knowledge-based products. Knowledge management system is formally recognized as a part of MIS. It is effectively used for strategic planning for survival and growth, increase in profit and productivity and so on. To achieve the said benefits of E-business organization, it is necessary to redesign the organization to realize the benefits of digital firm.
- The organization structure should be lean and flat.
- Get rid of rigid established infrastructure such as branch office or zonal office.
- Allow people to work from anywhere
- Automate processes after reengineering the process to cut down process cycle time.
- Make use of groupware technology on
- Internet platform for faster response processing
Another challenge is to convert domestic process design to work for international process, where integration of multinational information systems using different communication standards, country-specific accounting practices, and laws of security are to be adhered strictly.
Internet and networking technology has thrown another challenge to enlarge the scope of organization where customers and vendors become part of the organization. This technology offers a solution to communicate, coordinate, and collaborate with customers, vendors and business partners. This is just not a technical change in business operations but a cultural change in the mindset of managers and workers to look beyond the conventional organization. It means changing the organization behaviour to take competitive advantage of the E-business technology.
The last but not the least important is the challenge to organize and implement information architecture and information technology platforms, considering multiple locations and multiple information needs arising due to global operations of the business into a comprehensive MIS.
Kavungya answered the question on May 10, 2019 at 14:35