Adopting E-Business in Small and Medium Enterprise

Abstract

INTRODUCTION Electronic business (e-business) has become a part of everyday life for individuals and businesses. Advances in technology including web based technology have made e-business cost effective and easy to implement for even small businesses. The benefits and applications derived from e-business are vast and can be applied in areas including shipping, sales, advertising, supply chain, and electronic data interchange. Businesses are finding implementation of e- business a necessity to compete in the marketplace. In contrast to the benefits derived from the applications of e-business, Internet technologies have increased individual vulnerabilities to fraud and theft and raised concerns about privacy and policy (Magid, Tatikonda & Cochran, 2009). Advances in technology are expected to reduce individual vulnerabilities and increase the benefits and applications of e-business. RFID is a current technology being implemented, tested and improved and are expected to shape the future of electronic commerce. HISTORY OF E-BUSINESS E-business refers to the process of exchanging goods, services, and payments through electronic transactions typically performed through electronic data interchange (EDI), virtual private networks (VPN's) or the Internet. The origins of electronic business transactions or e-commerce can be traced back as early as 1910 when a group of florists developed a network utilizing the telegraph to exchange out-of-town orders for floral arrangements. This network developed into the Florists' Telegraph Delivery group which still exists today as FTD, Inc., (Hayes, 2002). The next major development in e-business came in 1948 during the Berlin airlift. Tons of food and supplies were flown to West Berlin, Germany by the United States as a result of Soviet road and railway blockades separating East and West Germany. The airlift required manifests to track the shipments of the supplies but the current manifest system had multiple forms making it difficult for timely processing of the complex tracking. As a result, U.S. Army Master Sgt. Edward A. Guilbert developed a manifest system that could be transmitted by telex, radio-teletype, or telephone (Hayes, 2002) allowing for electronic shipping transactions of the supplies. Guilbert took this concept to DuPont Co. in the 1960's and helped develop another standard electronic system for delivering order/shipping information between DuPont and one of its suppliers, Chemical Leahman Tank Lines. Electronic manifest systems flourished in the shipping industries for the next three years. The Transportation Data Coordinating Committee (TDCC) was formed in 1968 to set up standards among industries (not just the shipping industry). In 1975, they published the electronic data interchange (EDI) specifications (Hayes, 2002). Electronic Data Interchange (EDI) refers to the transfer of business information through computers using a standard format. Businesses rely on the telecommunications infrastructure, an early version of e-business network, to carry out the information exchange of EDI. When EDI first began being utilized, many companies developed their own proprietary EDI protocols. Only vendors or other business affiliates that had the same corresponding system could use these protocols. Therefore, typically only the largest companies who could afford to develop these protocols used EDI specifications. Value added networks (VAN's) were hence developed during this time by third party companies. They provided the EDI connection between businesses that did not have the appropriate capacity or means to develop one. Even so, the applications of EDI were kept developing throughout the shipping, food, automotive, and retail industries. As the use of EDI grew, more and more companies demanded their vendors or suppliers utilize these systems. As a result, a universal public EDI standard was developed called ANSI X12 in 1984 (Weisman, 2000). …