The Internet emphasizes the concept of transactions function and its impact on company competitiveness. Transaction management skills in order processing, wholesale, logistics, and distribution “enable” B2C E-Commerce. Also B2B E-Commerce; It plays an important role in streamlining the operations function in areas such as product design, purchasing and supply chain management. E-business in particular has an impact on transactions through incentives.
- Better customer relations: Online commerce expands the physical reach of buyers and sellers. Thanks to the Internet, customers can compare prices and review alternative products and resources. This lowers prices and allows manufacturers to pay more attention to customer trends and preferences. Quality is also better because companies can meet customers’ demands. Manufacturers can contact the customer directly and eliminate storefront and middleman costs. Customer data can be “obtained” more easily with technology that records and analyzes even a single click from the customer’s computer. The wealth of data enables one-to-one marketing and even mass marketing of products and services. This, in turn, reduces inventory costs and fine-tuning marketing expenses, as well as facilitating new product and service development.
- More efficient processes: E-Commerce prevents business process inefficiencies. Transactions cost 1 cent with online banking, 27 cents with ATM and 52 cents with phone. An airport ticket costs $1 on the Website, while the same ticket at a travel agency costs $8. IBM; It estimates that customers accessing e-service and support sites have saved the company more than $600 million in customer service costs. Electronic purchasing saves an additional $5 million, while online staff training saves $100 million. The General Electricity Trading Transaction Network saves half the time on purchases and one third on transaction costs.
- Lower material costs: With E-Commerce, the cost reduction of raw materials and intermediates is between 5% and 50%. This cost reduction indicates that they are requesting from competitive bidding, from a large number of potential suppliers, at a time of consolidation of orders and demand for wholesale discounts. While it took Solectron 3 months to get custom-designed chips from Thailand and 40 weeks to order an LCD screen, companies like IBM and Cisco expect to ramp up or stop production of a product during this time. While meeting these high expectations is laborious, it also obliges operations to be performed at a high level of performance.
- New ways of doing business: The Internet is causing organizations to change long-standing ways of doing business. Producers and consumers no longer have to be face-to-face to do business. E-retailers deliver the goods directly to the customer, instead of waiting for the customer to come to the store physically and take the goods home. Software, music, books, and education can all be distributed (and enjoyed) online. Instead of purchasing software and installing it on a computer, software applications can be rented from an application service provider (ASP) and used over the website. Manufacturers who reach their customers directly transform their production processes into a production model as orders come in. This makes demand more volatile and unpredictable. Because selling the product directly to the end user eliminates the buffers that facilitate production. The expanded market and fast delivery require more dispersed production and distribution facilities. More outsourcing is done to stay flexible and reduce risk. It is no longer strange that 80% of the product content is produced by the supplier.
- Globalization: E-Commerce has given birth to international trade and increased foreign investment. Inexpensive and efficient telecommunications from the Internet to the wireless network and satellite allow companies to carry out different parts of their production processes in different countries by establishing close contacts. The significant decrease in cost and increase in capacity has created global supply chains around the world. More transparency of markets has led buyers and sellers to compare shops around the world. Trade barriers are more difficult to break when transactions are made electronically. The doors of the world have been opened with the Internet for developing countries that could not access information, markets and technology before. At the same time, the internet helps companies respond to unexpected events in a short time. When the World Trade Center was attacked on September 11, 2001, America closed its borders and stopped flights. Thanks to the Internet and its worldwide network of suppliers, Dell PCs was able to identify where production would be disrupted by a lack of suppliers. It immediately increased production at its European and Asian plants and prioritized orders from its most important customers. He was also able to conduct online reviews, quickly combine existing resources with PC configurations, and guide his customers along this path. Companies that lost thousands of computers in the attack relied on Dell’s distribution of computers. Conversely, Compaq Company was unable to ship the $300 million order due to disruptions in its supply chain.
Companies where employees are hesitant about jobs that require travel have launched new products and communicated with their customers through their Web sites. Faced with their casino being empty, Harrah Entertainment sent their customers emails on September 14 informing them of cheap offers to lure them to Las Vegas. By September 30, 4000 customers had filled almost all of the Harrah Hotels.