CBSE

1. CHAPTER
EMERCfJ oeis F
'i1 L
I~ -i
,.
_j[_i EARNING OBJECTIVES
After going through the chapter, the learner will be able to:
C] Understand the meaning, scope and advantages of e-Business
l1J Distinguish between e-bus111ess and traditional business
(Il Explain the process of online buying and selling as a parl of e-business
Gl Identify and measure the security issues of online business
W Understand the methods of sec.ure and safe business transactions
bJ Identify the resources required for implementation of a successful e-business
• ~
In order to meet the growing consumer needs in this competitive business environment, all
business houses put in their best for providing quality services in time. It creates the urge of
adopting the fastest possible means of reaching consumers in the market. E-business comes
as a solution of all these issues confronted by the modern day business houses. E-business,
E-commerce and Outsourcing are evolved as emerging mode of business.
CONCEPT OF E-BUSINESS
E-business refers to the business undertaken through computerized networking system. It
includes all sorts of activities connected with trade, industry and commerce. Internet is
considered as the most importa_
nt medium of operating such business.
e-BusINESS Vs e-CoMMERCE
There is a general perception about that e-Business and e-Commerce as both are the sanie
but in practical it is different from each other. e-Business is a broad concept consists of all

2. _-.v11ies related with trade industry and commerce e-Com .
ctt-P...w • C . · merce 1s considered
a pa,t d e,-business ~onzon. :_.
1
ommerc_e includes bu)'ing and selling of goods and
-~ onhne through mtemet w,,1 e e-Busmess consists of productio d 1
,...- . n, e,e opment of
piodu_C'5 accounting rmance '."anagement and other functions apart from th b .
::;;..:and selling ot goods and se" ,ces. e asic
ScOPE of e-BrsL,'ESS
TheSCoP"ol,-.Business ~eeps on e~panding" ith_ thegro ing consumer needs and upliitment
oftechnolog) in the _soc,et). It p_ertorms all the nmctions like trading oi goods and se"•ices,
prodllct on distnbu:1on, markeu~g, finance, HR and management etc. with the help of an
equ wedcomputerized net orkmg S stem and personnel. The entire function of e-Business
can be c assined into the number of categories i.e. ,a, 828 Commerce, (b) 82C Commerce
c ntra Bcommerce and (d) C2C Commerce. '
B2B conunerce
The ,..,ord 82B reters to 'Business to Business'. In this type of business. transactions are
F==~~~~aia~on~g~b~u~siness firms through Electronic Data Interchange lEDI; Technolog". It
conta ns the rollm, ing transaction~:
a Pac ng Orders
b Controllm~ and Regulating Production
De ~el) of Products to the consumers
d Transterring Information and Money
e Creafon ofdiiierent form utilities
D spatchmg and Collecting all the required documents
B2C Commerce
32( Commerce stands for the business in which transactions are made among business and
consumers. ft is otherwise termed as online retail business. This sort of business includes the
tof ov, ng business transactions:
a Promoting goods and services through effective marketing channels
b Trading online with the consumers
d Accepting orders and deliver the products ordered in time
d Redressing grievances of consumers
l.7RA B COlLIERCE
Intra B Commerce represents the s'5tem in which all the transaction~ w_ithin a busin_ess
concern are performed through use of internet. It helps in maintaining ettectLve coordination
among different departments in the firm. It ensures proper management ot the business
operation. for Example, both the production manager aod marketing manager can ea
51
I)
communicate the desired and important information regarding to production 'olume a
nd

3. 160
the market demand. It helps both of them to formulate strategies for the accon, 1
•
ti . d . d . f . d'ff p IShrri
1e1r epartmental objectives. This system 1s use rn per ormrng I erent trans . er.to,
.
f r· . b I action I
interaction among different departments o a inn, reporting Yemp oyees, recruit s 11t,e
selection, training and development of employees etc. rnent alld
C2C Commerce
C2C Commerce stands for transactions taken ~lace among consumers only. This ty
business takes place in the absence of an established market. For Example, consurn Pe of
ers de I
with selling of used books or clothes.
a
BENEFITS OF e-BusINESS
Following are the benefits of e-Business:
(a) Easy formation: It ,s easy to form an e-Business in comparison with other fo
. . h 1
· . d f d rrn ot
business organization. This type of business can start wit im,te un s. It does not re
. . h b . f' quire
many legal formalities to complete for incorporating sue usiness 1rm.
(b) Convenience: It 1s easy and convenient of t~e e-B~siness firm~ to get in direct touch
or contact with consumers, suppliers and other business firms. It provides 24/7 service to the
consumers at their door step.
(c) Quick Transmission of information: Information can be transmitted easily and quick!
due to the use of internet. As a result of which, informations can b~ passed on from the plac~
of consumer to that of producer and vice versa. It red.u_ces th~ time consumed during the
placing of order and delivery of the final products spec1f1cally incase of Booking Tickets for
Mo ies. Flight, Train, e-Books, Software, Journals Recharge of Telephone and DTH Services
etc.
(cf) International Accessibility: Internet helps e-Business to go beyond the geographical
limits of countries and transacting all over the world. It provides an opportunity to the
consumer to procure their desired products from any country online.
(e) Promoting Paperless Transactions: This type of business helps in promoting paperless
transactions in the economy. It reduces the issues like redtapism and over dependency on
paper work and ensures an effective delivery system of business transactions.
Online Transactions
Online Business transaction is taken on the basis of electronic form through internet.
Such transactions are less time consuming and cost effective. Following are the number of
important steps taken for performing an onlrne business transaction:
la) Registration: Registration is considered as the first step in the process ofonline business
transaction. At first, the buyer has to sign up a form to open an account in the e-commerce
platform to transact with the seller. It 1s essential to fill all the required boxes by putting some
?fthe ba_s1c information like Name, Mobile Number and E-mail Id. After putting all the basic
information, the next step is to create a User Id and Password which will work as a securi~
or protection shield for the consumer.

4. ~·~~
, . g Modes of susiness 161
Ernerg1n .
. an order: After_gener~tmg User Id and P~sswor~, buyer has to place its
(b) placing de by placing a direct order by browsing online or addina to the cart
an be ma . . ·1 bl o
O
rder. It c e Shopping Cart 1s an option ava1 a e to the online buver to store their
referenc . d f f , -
for future vhich can be use as uture re erence. After selectina the products from the
d oducts v h . b
desire pr .1
ble buyer can place t e1r products.
. es ava1 a ,
I nativ · · ·d d h ·
ater t Mechanism: Payment 1s cons, ere as t e most crucial and sensible part
(c) Pay_
rnenbusiness transaction as it involves monetary aspects and digital pavment. It
n1ne f f t· d . . h '
of a~ 0 i h end security or a sa e pa~ment ~r un. s transter tor t e orders placed by the
requires hg t can be made for an online business in the following ways:
payrnen
buyer. h n Delivery (COD): It is a system of payment in which, customers have to make
(i) cas ~on physical delivery of the goods ordered online.
he payrnen
t h e· under this system, buyer can make the payment throubah cheque for the
CO C equ .
11 fgoods ordered. After collecting the cheque from the bank, seller must ensure the
arno~nti°d livery of the goods to the buyers place.
phys1ca e . . . . .
.. N t Banking: Net Banking 1s an alternative option available for the online payment for
(
11
!' etransactions. Buyer can transfer the billed amount of the order placed through net
business d. I h d
k
. from his bank accounts 1rect y tot even or.
ban ing
(iv) Credit or Debit Cards_
: It is considered as the commo~ly an_d popul~rly use? medium
ofonline payment. Under this system, customers can use their debit or credit card tor making
the payment of the billed amount to the seller online.
(v) Wallets: Online Payment for the billed amount can be made through wallets or digital
cash option. Wallet is considered as an electronic currency. A user of such wallet has to
transfer some funds from his or her bank account to the wallet. The amount so transierred to
the wallet will be shown as the balance amount of the wallet. At the time of making online
payment, the billed amount of the order will be charged from the wallet. The said amount
~ will be transferred from the wallet to the account of the vendor directly.
LJ SECURITY AND SAFETY OF ONLINE BUSINESS TRANSACTIONS
There are number of risks and threats associated with online business transactions. Hence,
it becomes essential to give more emphasis on the safety and security of these transactions.
Following are the major risk factors connected with online form of business:
1. Transaction Risks
Online business transactions face the threats of transaction risks which are discussed below:
(a) Problems in Delivery of goods such as delivery of goods at wrong address, difference
in quantity ordered and delivered, complete omission of delivery etc. These are other.vise
termed as 'default in delivery processes'.
(b) There may be default in payment made by the buyer through online d~e to technical
or server issues. It may result in non-payment of the amount due to the seller.
{c) _
There are chances of misplacing or wrong placing of order. It may happen due to some
tech~ical issues. As a result of which, either the buyer or seller may claim of not placing or
receipt of order.

5. 162
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1
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storls I sopcrn rng sys er . , - '-' , . . . . .
tlw entire systern. Ht1cki11g refers to the una11thoriicd rrespass'.ng or <
-!~_try ,_n to ,1 wd,~il!: f,n
the purpose of destructing or dnrnaging the: stored data ancJ rnforrntitron in -~he ~yst_ern. All
· h Vll)US 111 ·k·1
r1fl c m be r>reventcci by usin° Anti Vll'US
tlw~o scn1rilics issue rdated w,t , ;inc - ;ic. n ·' n ,
Softw;ne, progr.1mrning, scanning and 11pcbling fik:s from time to time.
3. llisks of Violation of Privacy and Intellectual Property Rights
Threc1ts of violation of privncy and inteller.tual property rights are increased with th(:
publication of informntion over internet. It leads to copy the informotion directly by other
users cJsily. It unh,rnccs the chances of receiving junk mails from multiple sources.
RESOURCES REQUIRED FOR IMPLEMENTATION OF A SUCCESSFUL e-BUSINESS
There c1rc difforcnt resources required for effective implementation of tl successful online
business. These are:
(.1) Computer System: Computer system i~ the most important resources required for
starting an c-Business. It is the basic need for cstablishin8 online business. An user can
interact with the selected vendors through an internet network by using hi!:> or her compute:r.
(b) Internet Connection: Computer ,:done rt11111ot serve the purpose of running an<l
operating a successful e-Business. It is required to have internet connectivity to the computers
for entering in lo an onlinc business transaction. W ith the help of internet facility, buy~r can
browse number of websites to idl'ntify and !,el<-·ct the desired product.
(c) Wchsitcs: Websites arc reg(ircled J~ one of the importJnt aspect for the c-Busine:ss.
Wehs~tcs_ provid~ ~arious product related iniormation inr lucling both qualitative and
q11ant1tilt1ve descriptions t.o the users. Such sitP-, provide all the informations available about
lhc product's i.1cross the globe within the compult!r fr;ime.
(d) Proclud C,1talogue: It refers to ,..1 brochure or doc u1T1cnt~ 1.vhich contains numerous
informations r?garcling _to products, category of pruducts, pric.e~. 4u.i lity c1nd quantities etc.
on the respective websites for the reference of consumers.
. ~
(.:)._
shoppi!ig_~-c~rd: ~hopµing Card is also consiclen:d <
1s il resource for trading online
successfully. fh 1s card ciln be used for the jJUl'fJOse of storinr> •ill 1t1r., . .,I 1•d d t ·n a
· I
1
- f - ,,, c , .... se ec e pro uc. s 1
sing e page or uture rclerence J.nd decisions making.

6. Modes of 1::Su~11 ,......~-
Ernerg,ng
t Gateway:Payment Getaway refersto the platform which f .1
.
1
.
ti raymen h II .
ac11tates e ectronic
(,, f f om the buyer to t e se er quickly and safely.
d transer r
fun 5
Difference Between Traditional Business and e-Business
. e the basic difference between Traditional Business and e-Bus· .
Following ar
mess.
Basis
~formation
2.
3.
4.
5.
6.
7.
Cost
Organization
Structure
Physical
E
xistence
Flow of
information
Business
Cycle
Coverage
Traditional Business
It is comparatively difficult
to form a traditional type of
business.
Cost for setting up and operation
of a traditional business is high.
It follows a vertical organization
structure.
It must have a physical existence.
• 4d·' -....,-
e-BUS/neSS · ·
The process of formation of an
e-Business is very simple and
easy.
The cost of establishment and
running of an e-Business is less.
It follows a horizontal form of
organization structure.
It does not require any physical
existence.
Information flow
top management to
level through middle
from It is not required in case of
lower e-Business.
level
management.
The process of business cycle is
comparatively long.
This type of business is confined
to a lim ited area.
The process of business cycle is
short.
There is no such restriction on
e-Business and it can access
from any place.
CONCEPT OF O UTSOURCING
Outsourcing may be defined as a process of assigning a part of the business activities to
some of the specialized and expert business houses. The primary objective of outsourcing is
to avail the skill, competence, professional work and expertise of the outsourcing agencies.
At present, some of the big industrial sectors are also outsourced some of their core busine~s
activities to the specialized agencies for completion of the target w ork within the time limit.
There are basically two types of outsourcing agencies operated in the society termed as BPO
(Business Process Outsourcing) and KPO (Knowledge Process Outsourcing).
SCOPE OF OUTSOURCING
Outsourcing contains different segments Iike Contract Manufacturing, Research, Sales and
Formalities. It is mostly used in IT sector basical ly through BPO and KPO. These concerns are
providing basic customer support voice based service. The major source of revenue of the
BPO i d
. I f d t ork and higher value
n ustry come from call centres, high and low vo ume o a a w

7. D
164 Business Studie
s-x,
work based on information. In recent times most of the big industrial houses are outsou
. , reed
their customer support service segment to the BPO and technical services to the kPo
sectors.
Need of Outsourcing
The concept of outsourcing is required due to the following reasons:
(a) Quality Customer Service: Companies are outsourced some o! their business segments
to outsourcing agencies for improving the quality products and services to the consumers. It
helps in concentrating more on the core areas of their business.
(b) Urge for Excellence: Outsourcing enables business organizations to concentrate more
on their core business segments which leads them towards excellence. It helps in increasing
the quality of their core product or service.
(c) Reducing Cost: Sometimes, companies may prefer to outsource some parts of their
business for decreasing the production and operating cost. Outsourcing helps business
concerns to reduce the cost of production and operation up to certain extent.
BPO (Business Process Outsourcing)
Business Process Outsourcing sectors are assigned different business activities to perform on
behalf of the client companies. These activities are connected with production, marketing
trading and finance etc. These organizations reduce the work burden of the client business
enterprises by sharing a portion of the total business segment. BPO concerns provide
specialized and professional services to the needy business firms. BPO services are generally
taken for advertising, distribution and transport services.
KPO (Knowledge Process Outsourcing)
KPO is regarded as the higher end of BPO. It provides knowledge based services to the
client organizations in a cost effective manner. These organizations are well known for
the knowledge expertise services. It is used in certain areas like research & development,
medical services and legal services etc.
Concept of Smart Card and ATMs
Smart Cards refer to a plastic card designed specifically for the purpose of digital transactions.
Such card is embedded with a microprocessor chip, electronic memory and a battery. It
may store account related information of the holder. It is a chip based card and does not
contain magnetic strip at the back like Credit Cards. ATM cards are the smart cards used for
performing different banking services. ATM stands for Automated Teller Machine card are
used for the purpose of withdrawal of cash from the machines, purchase on POS machines
at retail outlets, Online Payments etc.
UTILITIES OF ATM AND SMART CARDS
ATM and Smart Cards can be used for the following purposes:
(a) Multiple Applications: Smart cards can be used as ATM Cards, Debit Cards, Credit
Cards, Travel Cards, Passport, and Ration card, Driving License, Voter ID Cards and Identity
Cards etc.
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,d frlier M.ichirws (/TM) chL
111gc'd the entire process of banking operaIions since its
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111(11)( lll < •
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•
l (I.<1..,h tn thl' customers. Banks arc' cstabl1sh1ng /TM counters at different places to
depn~1 , ' · . . _ . . . .
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1
> ihc..•ir cu~tonwrs to 1r,rns,1
t t ,1s !)l'I the11 need ,rnd they do not have to go to the bank.
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AfM roun1c..1 r~ for wi1hdr,1w.1 I .mrl cleµosit of c..ish. Apart from this, this card can be used to
buyproduct'> on lim•, from dq>Jrtnwntc1I stores, big tr.:iding houses and all the places where
c,1td~ :ir<' .1rcL•pl1•d for p.1ymL'lll. ATM's c m be installed anywhere like Airports, Railway
~1
.,1
ion-., Pdrol P111nps, Big nusirwss ,1rcL1des, markets, etc. Hence, it gives easy access to the
< u,tPrnl·r~, 1or (ihtdining r,1sh. The ATM services was provided first by the foreign banks like
C1
1d>
,lllk, Crind L1ys bank and now by many private and public sector banks in India like
IClCI B,ink, HDFC 1
3.Jnk, SBI, UTI B.:ink etc.
Advantages of ATM's
fo the Cu~tomers
1 ATM's provicie 24 hrs. 7 days and 365 days a year service for banking transactions
1..1 Quick Jnd efficient services
) Maintains privacy in banking transaction
O Th(;-' transaction is completely secure thorough unique PIN
1
Generating statement of accounts
1 Acces · ·
_ smgaccounts 111 any of the CBS connected branches
) 1
11stant fund transfers
lo Banks
J Works as a I. . . . .
)
11 a ter native option to extend bank111g hours.
'_) R
eduction in long queue at bank counters
- Reduce O ·
)
perat,ng expenses.
lncre1sed k
c mar et penetration.