File on E- Commerce OVT. P.G COLLEGE FOR WOMEN ROHTAK SUBMITTED BY Nikita BBA (6th SEM) Roll No. 120133010005 UNIVERSITY ROLL NO. 4!!64!1E-COMMERCE Electronic Commerce commonly known as E-commerce or e-Commerce which denotes different types of transactions involved in commercial activities. It contains both organisational as well as individual activities which include the processing and transmission of digitized data such as text, pictures, sound and video, ete, E-commerce has developed a new environment with the help of Internet in business transactions and processing, Here information is provided direct to the consumers about the products they want to buy and the platform is set for product advertisements. It also permits negotiations, order for raw materials, settlement of financial transactions etc. Electronic commerce is a combination of communication services, data management and security mechanisms which provides a platform to organizations where they can share information about the selling of goods and services : 1) Communication Services : Electronic transfer of information from buyer to seller is supported by communication services. 2) Data Management : It is exchange and storing of data in a constant, format which enable easy exchange of information. 3) Security Mechanisms : Security mechanisms provides following functions Authenticates the source of information Guarantees the integrity and privacy of information. E-commerce covers many services over the Internet for example, customer service, banking, billing, marketing, retailing, secure distribution of data, corporate sector purchasing and other value-added services. Meaning and Definition of E-commerce : The term e-commerce (Electronic Commerce) refers to all types of business operations and transactions that are executed through Internet and other electronic technologies. "E-commerce is a virtual business environment in which information moves electronically via Internet related to buying, selling, transportation of goods and services” According to P.T. Joseph = "E-Commerce comprises core business processes of buying and selling, goods, services and information over the internet". According to Kalakota and Whinston : "Electronic Commerce can be defined from following four perspectives1) Communications Perspective : ” . aymer Electronic commerce is the delivery of information, products/services, or payments vig telephone lines, computer networks, or any other means. 2) Business Process Perspective : A Electronic commerce is the application of technology toward the automation of business transactions and workflows. 3) Service Perspective Electronic commerce is ‘0 cut service costs while improving the quality of goods and increas delivery, 4) Online Perspective : Electronic commerce provides the capability of buying and selling products and information on the Internet and other online services." Types of E-Commerce : Much of the world's business today is carried out over digital networks that connect people and companies. Several types of e-commerce models are in use today. The major online marketing domains are given below :Dt) Cet Cr) Puce) = Correa Business to Cenent cro} Pear) Cerise) (c2B) 1) B2C (Business to Consumer ses sell products and services to individual consumers re offered online through electronic channels in e- In B2C model of e-commerce, busines directly. All the products and servic commerce which supplements the traditional commerce. Internet acts as an electronic channel. E-Commerce ; a Examples : www.flipkart.com, www.infibeam.com, www.amazon,in, www.homeshop!8.co sites that comes under this category. Through these websites individual can ronic products etc. mare wel purchase clothes, mobiles and ele« i) Provides better way to deal with suppliers ii) Provides customer service centres that are physically located iii) Provides opportunity to return purchase item iv) Eliminates middlemen 2) B2B (Business to Business) : Business-to Business (B2B) e-commerce model describes electronic transactions between businesses such as between manufacturer and wholesaler. The major factors in increasing the Acceptance of B2B e-commerce are Internet and dependence of many business operations upon other businesses for supplying raw materials, utilities and servi It is very fast developing segment in e-commerce, Company can check and updates purchase orders, Invoices, inventory and shipping status directly through the Internet ‘The advantages of B2B e-commerce model are as follows i)Reduces cycle tine of inventory and costs ii) Enables business partners to share relevant information timely with accuracy. ) Improves supply-chain management among business partners, iv) Eliminates manual activities and hence reduces errors, 3) C2C (Consumer to Consumer) ;— i ess model that facilitates the 3) e-commerce is business Mr this e-commerce model, Consumer-io-Consumer (C20) ore sun Gat ere node BRM ere re atten ceecly cbt soon seers Wey s ne ea: classified advertis a ote consumers sell product a fei lass ' idual customer us e auction sites. ec s. An individual custo baltic different reduces to services on sve or tog craigslist.org, gittigidiyor.com. It entailg different products and servic vioker.com, craigs Hees e-Commerce Examples: eBay.cOM, queer re cmmmerce model, customer oy ; ‘ er customers. yees over organizationa ToWer cost for both buyer and seller custONOr ther employees over organizational also advertise and sell their products and s Intranet. 4) C2B (Consumer to Business) : eree model where consumers (individuals) sely Consumer-to Business (C2B) is an e-commerce esses and organisations. This model is Products and services which are consumed by is fens tredcts and eervicce ex Opposite to B2C model. In this model, price and value for s created by individuals, ct or gives a useful idea for vrites reviews for new product or gi For example : when a customer writes reviews for a Prod cease imearneny hew product development then he/she is creating value fo el by setting discussions forums adopts the review or idea. Company can facilitate C2B model by setting on their websites, For example : the websites such as www.mobshop.com, www. transactions, pazaryerim.com and www priceline.com are organizers of C2p, 5) Business-to-Government (B2G) : In marketing context, B2G marketing is also known as “ derived from B2B marketing and is comprised of aetivitres such as marketing of products and marker Bovernment agencies. Such marketing is undertaken via various integrated marketing techniques like advertising, branding, managing public relations, online Communication strategies, etc, public sector marketing”. It is Features of E-commerce : Following figure shows the features of electronic commerce CC eee Global Reach ee1) Ubiquity E-commerce is widespread, that is, itis available everywhere always. It sets free market from being restricted to a physical space and makes it possible to shop from computer (such as desktop, laptop). The result is called a market space, For consumers, ubiquity cuts transaction costs for exploring products in a market. Consumers can acquire any information whenever and whe ever they want, regardless of their location. It is no longer necessary that buyer spend time and money for traveling to a market. In all, it saves the cognitive energy needed to transect in a market space. 2) Global Reach : E-commerce technologies enable a business to casily reach across geographic boundaries around the earth far more conveniently and effectively as compared to traditional commerce. Globally, companies are acquiring greater profits and business results by expanding their business with e-commerce solutions. As a result, the potential market size for e-commerce merchants is approximately equal to size of online population. 3) Universal Standards : Universal Standards are standards shared by all the nations around world. These are technical standards of Intemet for conducting e-commerce. It gives all the ability to connect at the same "level" and it provides network externalities that will benefit everyone. Universal technical standards lower entry costs and minimal search c 4) Interactivity E-commerce technologies permits two-way communication between customer and sellers which makes it interactive. It proves as significant feature of e-commerce technology over the commercial traditional technologies of the 20th century. 5) Information Density : Information density means total amount and quality of information available over Internet to all market buyers and sellers. Internet vastly increases information density. Information density offers better quality information to consumer and merchants. E-commerce technologies increase accuracy and timeliness of information. For example, flipkart.com store has variety of products with prices. 6) Richness : Richness refers to the complexity and content of a message. Richness means all commercial activity and experience, conducted through a variety of messages. For example, text, pictures Videos, sound, links, SMS (Short Message Services) etc, Advantages of E-Commerce : The advantages/benefits of e-commerce can be divided into two categories : A) Advantages to Customers -es of value rhe prod se the different stages of va ¢ ites have ed prices because the dil x icts available on websites have reduce i ¢ ae chain Bree creased between source and destination. The intermediaries such a: sumer directly instead of fiminated by the company and they sell their products to consumer directly instea are el distributing through intermediaries, 2) Global Marketplace : ¢ an purchase products E-commerce provides global marketplace from Soro can pi P according to their needs situated anywhere in the 0), "there cl duties put on According to World Trade Organization (WTO), "there are no custom duties p Products bought and traded globally electronically". 7 cts and services to consumers Global Marketplace also provides large collection of products and With their prices, 3) Anytime Access : Online businesses are open 24 hours, 7 day a week and 365 days in a year Sr eee Consumers can do transactions and enquiry about any product/ paekeea te anette A ny at anytime and anywhere from globe. Consumer can purchase any product in day or nig! “sing Internet connections and computer at single click of mouse. 4) More Choices : Online businesses Provide their consumers more choices of any product, const uumer can study products and their feature: 5) Quicker Delivery ; Purchasing. Before purchasing sof all major brands E-Commerce offers consumer more options and provides quicker delivery services. Some e-commerce company of products and Provides free home delivery service to their consumers B) Advantages to Businesses : 1) Low Barriers to Entries ;Internet provides low cost advertisement as compared to advertisement on newspapers or television. In today's world, Internet has become inexpensive advertising medium used by firms for commerce. The different methods of advertising are : e-mail, banners, pop-ups, steaming video and audio etc, 4) Global Reach E-commerce enabled busin ability to reach globally at low cost. They are able send messages world-wide at any time. Since online businesses are globally accessed so e- ‘commerce helps to attract new consumers and business clients from anywhere in the world, Disadvantages of E-Commerce : The disadvantages/limitations of e-commerce can be divided into two categories : 1) Lack of Security : Consumer needs to be confident and trust over e-commerce payment providers. Any fraud, hacking or forgery can break the trust of consumer. 2) Low Bandwidth : In many countries, network might cause an issue because of low bandwidth. 3) Difficulty in Integrating E-Commerce : Itis difficult to integrate e-commerce software or website with the some existing applications and databases. Vendors need special web servers to, deal with integration problem in addition to network servers. 4) Not All Customers have Access to Internet : Intemet access is not universally available so much of the effort made does not actually reach the consumer. Many potential customers that are living in remote villages have not Intemet access facility. 4) Lack of Touch and Feel : Consumers may want to touch and feel a product before purchasing online, Online businesses do, not provide the touch and feel experience to consumer on items such as clothes, shoes ete, 5) Customers Relation Problems : Organisation needs loyal customers to run their online business for long time. Online businesses cannot continue without loyal customers in today's competition. 6) Corporate Vulnerability : Online businesses have high availability of information related to product, price, catalogs, and others. This information makes web sites vulnerable to access by competition, This Doves of extracting business intelligence from competitor's web pages is called Web farming.ot THE BRICK-AND-CLICK BUSINESS MODEL -s developed With the f E erce strategic a Alternative e-commerce strategies reveal different commert® shnologies. some of these help of integration of business processes with new interne alternatives at follows, FC ud Briere Eee is Pure Click Peele 1) Brick and Mortar : The phrase "brick and mortar’ means a physical or tangible asset. For example, a building, plant, storage fi ity, production unit, etc. Brick and mortar is one of the traditional business models whi h involve the use of websites just for the purpose of Using it as company's brochure. Websites here serve as a means for providing information about the company, Such Companies use the traditional sales methods for generating profits, However, if the company gets a favorable market feedback, then these companies can expand further into "brick and click' companies adding to their online presence. 2) Pure Click : Unlike brick and mortar companies, pure click companies have pure online entire marketing transaction is undertaken online. These companies are Popularly known a ‘Pure-plays' or ‘dotcoms'. The various elements associated with the 'pure click’ companies are commercial sites, content sites, transaction sites, enabler ; f y pure click companies are Google, yahoo, Sify, Alta Vista etc. These se: gl 7 c fer various services like free mailing, news, weather reports, entertainment, etc. on company’s website. Major Sxamples of ‘pure click’ companies are Flipkart, Amazon, EBay. Inés times ete, 3) Brick and Click ; presence. TheirCompanies that fall under the category of brick and click’ model have both online and off presence. This means that their marketing and transactional activities are carried on both online as well as offline mode. They need to manage their online and offline activities and should ensure that their online sales do not affect their traditional (offline) sales. They also need to manage their channel conflicts which may arise among their intermediaries and conflicts arising in online sales. Some of the companies like Avon and Compaq launched their online sales models in such a way that it actually supported their traditional offline sales instead of disrupting it. Similarly, one of the popular store Wal-Mart introduced its subsidiary firm in January, 2000 namely Walmart.com which helped customer to access its servi online offering more than a million products on internet, This retailing firm involves use of web-based technology as well as standardized retailing strategies for attracting customers Principles Of Brick-and-Click Store Whether you are running a small, mid-size, or big business, the prin same. That said, here are some Principles of a brick-and-click business. Operational flexibility in terms of buyer preferences when it comes to purchases and deliveries; Enhanced customer experience in multiple buyer touchpoints; Exponential brand growth, thanks to a wider target audience. Advantages And Disadvantages Of Brick-and-Click Store Pros of the bricks-and-click business model include: You can reach more clients by providing in-enterprise and online channel buying experiences; Real-time analytics from your website shop can help improve in-enterprise experiences; Offer solutions based on consumer preferences—one can buy cither online or in-enterpri Downsides: Operation costs can go overboard pretty quick since you have to manage both online and tangible enterprises; This model can be pretty daunting for new businesses du to a steep learning curve; Requires more time and commitment before the model eventually becomes successful in terms of profitability. What Is An Example Of A Brick-and-Click Store?a , aracteristics of a brick-and-click by¢: ‘ imic the characteristics 0: Usiness ari companies that mimic the ¢ : peer var rr a mE a . Bot sxample is Walmart. The retailer originally started i pees cat orden bt Beene, purchases through its e-business. pe Ys mie €T goods Online F . rangi utlet. and have them delivered at their preferred asin ey ole Foodyend Tee Other brick-and-click companies examples include How To Implement The Brick-and-Click Model Typically, implementing this business model depends on your OS) and overa! Strategy. Nonetheless, here are some tips to help you get started: Hi business Use an innovative point of sale (P site with your tangible enterprise; Keep a consistent inventory both online and offline to enhance the customer experience; | | | | ] OS) system that seamlessly integrates your eCommerce Optimize your shipping and returns policies for both online and in-enterprise deliveries; Optimize your eCommerce site to be mobile-responsive; Enhance customer engagement across all touchpoints to drive brand loyalty.DEBIT CARD & CREDIT CARD Debit Card A debit card, also known as a check eard or bank card is a payment card that can be used in place of cash to make purchases. The term plastic card includes the above and as an identity document. These are similar to a credit card, but unlike a credit card, the money forthe purchase must be in the cardholder's bank account at the time of a purchase and is immediately transferred directly from that account to the merchant's account to pay for the purchase, Some debit cards carry a stored value with which a payment is made (prepaid card), but most telay a message to the cardholder's bank to withdraw funds from the cardholder's designated bank account. In some cases, the payment card number is assigned exclusively for use on the Internet and there is no physical card. This is referred to as a Virtual card. In many countries, the use of debit cards has become so widespread they have overtaken checks in volume, or have entirely replaced them; in some instances, debit cards have also largely replaced cash transactions. The development of debit cards, unlike credit cards and charge cards, has generally been country-specific, resulting in a number of different Systems around the world, which were often incompatible. Since the mid-2000s, a number of initiatives have allowed debit cards issued in one country to be used in other countries and allowed their use for internet and phone purchases. Debit cards usually also allow an instant withdrawal of cash, known as a cash advance, acting a5 an ATM card for this purpose. Merchants may also offer cashback facilities to customers, 80 that a customer can withdraw cash along with their purchase. There are usually daily limits on the amount of cash that can be withdrawn, Most debit cards are plastic, but there are cards made of metal, and rarely wood,! © Bank Q ® Types of debit card systems An example of the front of a typical debit card: 1. Issuing bank logo 3. Hologram (this is located on the back on some cards including most MasterCards) 4. Card number (PAN) (may vary in length but mostly 16-di digits. However in cases such as Discover, Diner's Club, Express it has a unique 15-digit card number) 5. Card brand logo 6. Expiration date gits With unique last 4 UnionPay & American 17. Cardholder's name: The j peop el card: Advs Fthe reverse side of a typical debit card An example of the reverse side of a typ — func 1. Magnetie stripe a 2. Signature strip panel oH 3. Card Security Code Rarer ros bo ently three ways that debit card transactions are processed Tae ao jeans online debit or PIN debit), offline debit (also known as Sunatre debi) nd ae Fe an cee em. One physical card can include the functions of all tye, ESS We RSP SET es teen crouretncea. Tue § Major debit cary Rist es ca used in a number rere Visa el Peis Tear Amerian Expres, Discover, Mastercard and Visa Other a f networks are STAR, JCB, Pulse etc. There are many types of debit cards eich accented oy within a particular country or region, for example Switch (since merged with Maestro) f and Solo in the United Kingdom etc Online debit system Online debit cards re quire electronic authorization of every transaction and the debits are reflected in the user' count immediately. The transaction may be additionally secured with the personal identification number (PIN) authentication system; some online cords require = W Such authentication for every transaction, essentially becoming enhanced automatic teller machine (ATM) cards. A s One difficulty with using online debit cards is the necessity of an electronic authorization re device at the point of sale (POS) and sometimes algo a Separate PINpad to enter the PIN, e although this is becoming commonplace forall card transactions in many countries, Overall, the online debit card is generally Of its more secure authentication system Processing lag on transactions tha systems are using the normal auth time online debit transaction viewed as superior to the offline debit card because and live status, which alleviates problems with gy t may only issue online debit cards. Some on-line debit hentication processes of Internet banking to provide real- Electronic purse card system Smart-card-based electronic purse systems (in which v: an externally recorded account, so that machines connectivity) are in use throughout Europe since (Geldkarte), Austria (Quick Wertkarte), the Neth m (Proton), Switzerland (CASH) and France (Moneo, which is usually carried by a detie card). In Austria and Germany, almost all current bank cards now include electronic Purses, whereas the electronic purse has been recently phased out in the Netherlands, alue is stored on the ca accepting the card need no the mid-1990s, most notabl: erlands (Chipknip), Belgiu rd chip, not in network 'y in Germany 12Prepaid debit cards Nomenclature Prepaid debit cards are reloadable and can be also called reloadable debit cards. Users The primary market for prepaid debit cards has historically been unbanked peoples that is, people who do not use banks or credit unions for their financial transactions.!”) Advantages Adyantages of prepaid debit cards include being safer than carrying cash, worldwide functionality due to Visa and MasterCard merchant acceptance, not having to worry about paying a credit card bill or going into debt, the opportunity for anyone over the age of 18 to apply and be accepted without checks on creditworthiness, and the option to deposit i paychecks and government benefits directly onto the card for free.{* A newer advantage is use of EMV technology and even contactless functionality, which had previously been limited to bank debit cards and credit cards. Risks + Ifthe card provider offers an insecure website for the cardholder to check the balance on the card, this could give an attacker access to the card information. + Ifthe user loses the card, and has not somehow registered it, the user likely loses the money. + Ifaprovider has technical issues, the money might not be accessible when a user needs it. Some companies’ payment systems do not appear to accept prepaid debit cards, What Is a Credit Card? A credit card is a thin rectangular piece of plastic or metal issued by a bank or financial services company that allows cardholders to borrow funds with which to pay for goods and services with merchants that accept cards for payment. Credit cards impose the condition that cardholders pay back the borrowed money, plus any applicable interest, as well as any additional agreed-upon charges, either in full by the billing date or over time. Tn addition to the standard credit line, the credit card issuer may also grant a separate | cash line of credit (LOC) to cardholders, enabling them to borrow money in the form of cash ‘advances that can be accessed through bank tellers, ATMs, or credit card convenience checks. Such cash advances typically have different terms, such as no grace period and higher interest rates, compared with those transactions that access the main credit line. Issuers customarily preset borrowing limits based on an individual’s credit rating. A vast majority of businesses let the customer make purchases with credit cards, which remain one of today’s ‘most popular payment methodologies for buying consumer goods and services, KEY TAKEAWAYS * Credit cards are plastic or metal cards used to pay for items or services using credit. * Credit cards charge interest on the money spent. 13ks, 0 ci stores, banks ; eerie or reward miles. {fer options for those with little or bad Credit r other financial institutions And of; len en bei ebit cards 0! Secured credit cards and debit ¢ Understanding Credit Cards N ate (APR) vs. other fo al percentage rate (APR) vs. of Orms of ds typically charge a higher annual pea ee charged tothe card are yy, b Credit cards typically harges on any unpaid balances Reet inesces win ly consumer loans. Interest charg Reece narchaselts made (ex pt n ca there's | imposed approximately one month alt initial period of time after account opening , e y offer in place for an Inta Ed fr a previous month— th 0% APR introductory offer in p ace fOr a ied forward from a p ia hy unless previous unpaid balances had been ¢ ra 4 case there is no grace period granted for new r a efore intere ' RE of at least 21 days be! crest on 4 By law, credit card issuers must offer a eae Be ates Ge ore the eric a : purchases can begin to accrue.! eee tales Fpportent fo understand whether ou : ee tcc roath Individuals with poor credit histories often see) e issuer accrues interest daily or monthly. Individua secured credit cards, which require cash deposits, that afford them commensurate lines of credit. Types of Credit Cards Most major credit cards—which include Visa, Mastercard, Discover, and American Express—are issued by banks, credit unions, or other fi cards attract customers by offering incentives such as Certificates to major retailers, and cash back on purch: generally referred to as rewards credit cards, nancial institutions. Many credit airline miles, hotel room rentals, gift ases. These types of credit cards are To generate customer loyalty, many national retailers issue branded versions of credit cards, Secured credit cards area type of credit card where the cardholder secures the card witha security deposit. Such cards offer limited li f that are equal in value to the security deposits, which are often refunded after cardholders den Y f nonstrate repeated and responsible card usage over time. These cards are frequently Sought by individuals With limited or Poor credit histories,E-COMMERCE BUSINESS APPLICATIONS Now a days nearly every company and organization makes use of the Internet to perform business deals and transactions, let us take a look at this a little more closely. ss done online or electronically with eCommerce or Electronic Commerce, that is busin ‘em is applied into the four main the use of Internet or any other computer networking section of business given below: + ©Commerce applications in the Manufacturing Sector + e-Commerce applications in the Wholesale Sector + e-Commerce applications in the Retail Sector + e-Commerce applications in the Service Sector Twill now attempt explain the application of eCommerce in each of these sectors in brief. Manufacturing = fee By eee ici. a> ey, ie > = Wholesale Ge) Reta 15i cturing eCommerce applications in Manufacturing he process of collecting and then converting ray xd as the a Manufactur Mater, ue ers, al PAMPER littl ano Js or products for the consumers. into finishe tative goods o into finished, qualitativ ents, contracts personnel ete worki.,, .5 a web of various components, contracts p king Manufacturing requires a ch in order to produce goods or services. itricately together and in sy’ OTS intri s, tra ion, storages, paper Work. ires components, assemblies, transportati BES, Paper Works, Manufacturing require: er educing the agement process helps in re overt ed to the supply chain manageme i aaa eCommerce Paes ey andflcieney by automating mest oF he sup costs drastically an eCommerce application in Wholesale i than the consumers, take for jantities to anyone other ling goods or products in large quant We eae etcetera pencomremest einer ineecicerd or even dit ibutors are known as wholesalers... Physical assembling, sorting & grading goods in large lots, breaking bulk, repacking & redistributing in smaller lots is all a part wholesale. Problems faced by the traditional system of wholesale: The local wholesalers could no! compete with the foreign wholesale enterprises who had acquired highly advanced man: lagement and operational skills over due time., The wholesale sector was characterized for its high input and low output... Wholesale operatin, ig Costs which included staffing, warehouses, establi Setting up and acquiring land for local shing distribution centers,etc w ere extremely high... Role of eCommerce in wholesale: the competitive edge held by foreign wholesa Offers a wide and extensive range of information, intermediary and busi NESS Services, eCommerce application in Retail 16 aSelling of goods and services to the consumers for their personal consumption and use is known as retailing... Take for example... Ebay.com, departmental store: hotels, ete.. then services like dentists, doctors, Retailers provide a link between the consumers and the manufacturers and add value to the product and service by making their sales easier. Retailers answer any queries that you may have, they display and demonstrate products to the consumers before selling it to them... this makes the services by retailers less risky and more fun to buy products, They even provide extra services from personal shopping to gift wrapping and home delivery!! Role of eCommerce in Retailing: The Intemet has made retailing an exciting and challenging field in recent days with various companies hosting their stores online via the internet. People can now sit at their computers, open the website they desire to do so and browse their the catalogues put up by the company (retailer), choose their product and either pay for it online itself or on delivery... You don't need to step outta your room to make a purchase nowadays. Having your store online helps drastically in cost cutting as companies don't need to purchase stores, they can cut down on staff, provide services to a much wider audience, etc eCommerce To know more about eCommerce click here: All about eCommerce eCommerce application in the Service sector ‘One of the three main industrial categories of a developed economy is the service sector.. It involves basically the provision of all services such as distribution and sales of goods to other businesses and consumers such as pest control, entertainment and even services such as transportation, Italso includes the public utilities and the soft parts of the economy such as insurance, banking, education, insurance, et 17The service sector focuses mainly on people to people services... Issues faced by the service sector: Since services are intangible, its extremely difficult to make customer understand and aware about their benefits... Quality of services depends solely on the quality of the individual providing the services, There's no Special technology or anything like in manufacturing to attract people. Role of eCommerce in the Service Sector: eCommerce helps in improving and increasing the speed of transactions, reduces management expenditure, in creases efficiency and increases competitiveness. . _ Helps the insurance, banking and maint. telecommunications, y all the financial se tourism, logistics, ‘ctors, real estate, and postal serviceseG a, VIRTUAL ORGANISATIO. inition: . Ao dey my 90 and is also known ae new form of organisation, ie, ‘virtual organisation’ emerged in 1990 and is as digital organisation, network organisation or modular organis SC re Yee rhe virtual organisation is @ network of cooperation made possible by, what is calle 1 © Information and Communication Technology, which is flexible and comes to mee! dynamics of the market, ‘Altematively speaking, the virtual organisation is a social network in which all the horizontal and vertical boundaries are removed, In this sense, it is a boundary less organisation. It consists of individual's working out of physically dispersed work places, or even individuals working from mobile devices and not tied to any particular workspace. The ICT is the backbone of virtual organisation, Itis the ICT that coordinates the activities, combines the workers? skills and resources with an objective to achieve the common goal set by a virtual organisation. Managers in these organisations coordinate and control external relations with the help of computer network links. The virtual form of organisation is increa: ng in India also. Nike, Reebok, Puma, Dell Computers, HLL, ete., are the prominent companies working victually, While considering the issue of flexibility, organisations may have several options like flexi- time, part-time work, job-sharing, and home-based working. Here, one of the most important issues involved is attaining flexibility to respond to changes — both internal and external ~ is determining the extent of contro! or the amount of autonomy the virtual organisations will impose on their members. This is because of the paradox of flexibility itself. That is: while an organisation must possess some procedures that enhance its flexibility to avoid the state of rigidity, on the one hand, and simultancously also have some stability to avoid chaos, on the other. Characteristic A virtual organisation has the following characteristics: 1. Flat organisation 2, Dynamic 3. Informal communication 4, Power flexibility 5. Multi-disciplinary (virtual) teams 6. Vague organisational boundaries 7, Goal orientation 19§: Curtomer orientation 9 Homework 10. Absenve of Apparent iuwtire Why Sharing of information 12, Staffed by, Knowledge workers, {n Tht, this Hist ofthe characteristic of virtual organisation in not an exhaustive one but Wsirative only, One ean add more charucteristiog 10 this Hist, ‘Types of virtual Organisations: Depending on the degree or spectrum of virtuality, virtual organisations ean be classified into three brond types an follows: }, Tolecommuters 2, Outsourcing employees/competencies 4, Completely virtual A brief description of these follows in turn, Telecommuters; ‘These companies have employees who work from their homes, They interact with the work- place via personal computers connected with a modem to the phone lines, Examples of companies wing some form of telecommuting are Dow Chemicals, Xerox, Coherent Technologies Inc,, etc, Outsourcing Kmployees/Competencies; These companies are characterined by the outsourcing of all/most core competencies. Areas for onmmnucing include marketing and sales, human resources, finance, research and development, engineering, manufacturing, information system, etc. In such case, virtual organivation does its own on one oF two core areas of competence but with excellence, For example, Nike performs in product design and marketing very well and relies on outsources for imtormation technology ws 4 means for maintaining inter-organisational coordination, Commpetely Virtua: ‘Thane companies meaghoricaly dexcribed us companies without walls that are tightly Sinked 1 9 large nerwork of suppliers, distributors, retailers and customers as well as to strategic and Join verture partners, Astana Committee for the Olympic Games (ACOG) in 1996 and the Gerehaymen Hors of the PC by the IBM are the examples of completely vistual | Now, these above types of virtual organisations are summarized in theMost virtwal comumuters Core Corp, with virtual outsourcing Tele Completely Virtual ayees Combination of Employ n of employees ns Completely Virtual employees, outsourcin, bin apes Crna Paul (Viral offce, vinwal ies 'articipants in a completely Virtual organization Production) cost leaders! for ntiation, cost leadership and custome iter’ Satisfaction. Virtual Organisation: Advantages, Disadvantages and Features! ‘advantage: Qirtual organisations offer the following advantages: J, ltsaves time, travel expenses and eliminates lack of access to experts 2, Virtual teams can be organised whether or not members are in reasonable proximity to each other 3, Use of outside experts without incurring expenses for travel, logging and downtime 4, Dynamic team membership allows people to move from one project to another. 5, Employee can be assigned to multiple, concurrent teams 6, Teams’ communication and work reports are available online to facilitate swift responses tothe demands of the (global) market. 7, Employees can accommodate both personal and professional lives. 8, Virtual teams allow firms to expand their potential abour markets enabling them to hire and retain the best people regardless of their physical locations. Disadvantages: Inspite of these advantages, virtual organisations suffer from the follo disadvantages also: ing 1. The lack of physical interactions with its associated verbal and non-verbal cues and also the synergies that often accompany face-to-face interaction 2, Non-availability of paraverbal and non-verbal cues such as voice, eye movement, facial expression, and body language which help in better communication. 3, Ability to work even if the virtual teams are miles apart and the members have never or farely met cach other face-to-face. But the fact remains that despite these drawbacks; virtual organisations have become a reality and are growing in popularity. By now, several successful cases of virtual organisations 21—— —=—— Jare’, computer based system roup War to achieve a rk in order to bonne . Support er Our country. Itis the explicitly designed Gr pa ma s the virtual organisations Common goa, CUPS enables the virtual org: ledge renders V irtual teams to Jess web electronic eatur i rs €s of Virtual organisation: anisation going. F Info, es : emasculn nis Power. The absence of information and know communing id ineffective. Information technology, ie., seam ae According to py dia does not allow happening this and keeps the ort WS\0 Pattanayak, following are the salient features of virtual 078 articular, the worlds 9 paauclony: lew technology has tr a ' Inp' : ‘ansformed the traditional ways of working. a Fe peegee aul telephonyars corn i ittiher 2 a mvup awhole new range of peare Heer COmPuter Telephony Integrations (CT) will usher ina new revolution to the p. The CTT has traditionally been used in all call centre applications. E-mail Integration; pp ceietne Short Message Service (SMS) into the existing e-mail infrastructure allows the whole organisation to take advantages of SMS products such as ‘Express Way”. Office System Integration: SMS technology can greatly enhance the existing or new office syster method of Voice Mail Alert: SMS technology added to the existing voice mail system builds an eff receiving voice mail alerts, Mobile Data: This enables a laptop to retrieve information anywhere through the mobile phone network, Mobile data communications revolutionize where and how work is done. In the past, corpo- tate information has been inaccessible from many places where it is needed. One’s ability to link laptop to mobile phone keeps one connected to his/her virtual organisation from anywhere.