The Impact of Electronic Commerce on the Traditional Enterprise Process in China

Abstract: E-commerce is gradually becoming the mainstream of today's transaction methods. This paper describes the classification of e-commerce, the relationship between traditional enterprises and e-commerce, the impact of e-commerce on traditional enterprise business processes, and issues that need to be solved during the implementation of e-commerce.

E-commerce refers to the electronic realization of the entire trading activity. From the perspective of coverage, it can be defined as: any form of commercial transaction by parties to the transaction by electronic transaction rather than by face-to-face exchange or direct interview; from the technical aspect, it can be defined as: E-commerce is a multi-technology assembly, Including exchange of data (such as electronic data exchange, e-mail), access to data (shared databases, electronic bulletin boards) and automatic capture of data (barcodes). At present, there are many companies involved in e-commerce business, and some specialize in e-commerce, some use e-commerce as the main business, and some use e-commerce as a subsidiary business. However, no matter what kind of companies, they can see the background of traditional processes from the e-commerce they are engaged in. E-commerce does not deviate from the value chain of traditional industries, but it is used as a lubricant for all aspects of an industry.

First, the classification of e-commerce

E-commerce can be divided into complete e-commerce and incomplete e-commerce according to the operation mode of business activities. Full e-commerce refers to all transaction behaviors and transaction processes that can realize and complete the entire transaction activity through e-commerce; incomplete e-commerce refers to transactions that cannot completely rely on e-commerce to realize and complete the complete transaction process, and it needs to rely on some external Elements, such as the use of transportation systems to complete the transaction.

E-commerce transactions can be divided into: the business-to-business B2B e-commerce; the business-to-consumer B2C e-commerce; the consumer-to-consumer C2C e-commerce; the business-to-government B2G e-commerce; the consumer to the government C2G e-commerce.

Second, traditional enterprises and e-commerce

Traditional enterprises generally refer to various economic organizations engaged in manufacturing and distribution services that have grown up in the era of industrial economy. Traditional enterprises are relative to some network companies. They mainly focus on the production of tangible products such as petroleum, metallurgy, machinery, coal, electrical equipment, food and beverages, textiles, garments, leather down, wood, paper and printing. And other companies. The understanding of traditional enterprises can be carried out in the following three aspects. First of all, from the organizational structure point of view, traditional enterprises generally implement a hierarchical structure, the so-called pyramid type; from the perspective of the mode of operation, traditional enterprises generally use traditional management methods and technologies for internal management and trading activities; from the operating In terms of products and services, traditional enterprises generally profit from the production and business activities of physical products.

In the late 20th century, the emergence of the Internet, E-mail, and the Web aroused great interest from companies. Many Internet companies have emerged in large numbers. These companies hope to use the Internet, E-mail, and the Web to realize the transformation of their business models. However, as of April 2000, with the sharp decline in NASDAQ Internet stocks, some internet companies have closed down. However, some IT companies (IBM, HP, and Intel) have risen in the cold winter of the Internet and have gradually completed the transition to e-commerce companies and have taken a leadership position in different areas within the IT industry. For example, HP is known for personalized computer design and gold medal services; Dell is known for its direct sales model for personal computers; Sun is a giant in the server space; and Intel is the world's largest computer chip maker. These IT companies generally experienced the stages of internal electronic management, sales e-commerce, electronic supply chain management, electronic customer relationship management, and electronic inventory management during the e-business transformation process.

There are many reasons for traditional enterprises to implement e-business transformation. The following are the main points: First, the rapid development of information technology represented by the Internet has made it possible for traditional enterprises to implement e-business transformation. Most companies try to use the Internet to re Design its business processes, adjust its organizational structure, and build a new enterprise information technology platform. Second, fierce market competition also forces companies to adjust their competitive strategies and make full use of new technologies to build new competitiveness. Third, with the changes in the market environment, the customer's needs have undergone great changes. The mass production model has been unable to meet the individual needs of customers. The business model needs to be adjusted. Fourthly, lowering operating costs and improving operational efficiency have always been the goal pursued by traditional enterprises. Under the e-commerce environment, traditional enterprises can realize reductions in operating costs and operating efficiency through close cooperation with suppliers, vendors, and partners. improve.

Third, the impact of electronic commerce

The rapid development of e-commerce provides traditional enterprises with unprecedented opportunities for development. With the rapid development of the Internet, more and more companies have realized that e-commerce is the only way for companies to survive and develop in the increasingly fierce global market competition. E-commerce can not only enable traditional enterprises to improve efficiency, reduce costs, and expand global markets, but also create new value by providing customers with personalized value-added services. At present, some of the world’s most famous traditional companies, such as GM, Ford, Procter & Gamble, Unilever, and Boeing, have already launched e-commerce, and domestic companies such as Lenovo, Haier, Midea, and Kelon have also invested heavily. Resources to implement e-business transformation. Practice has proved that these companies have greatly enhanced their market competitiveness through e-commerce.

1. E-commerce can improve the efficiency of business activities

With the application of e-commerce, the efficiency of business operations of traditional manufacturing enterprises can be greatly improved. This efficiency improvement can be reflected in both internal management and external relations. In such companies, due to the use of internal corporate management software such as intranets, management information systems (MIS), and enterprise resource planning systems (ERP), internal consumption of enterprises is reduced and efficiency is improved. In the relationship between business and business partners, due to the introduction of e-commerce related software, the communication efficiency between services and trading companies has been significantly improved, and the time spent on the same business activities has been significantly shortened. The application of e-commerce brings about the improvement of business efficiency inside and outside the enterprise, which inevitably can create greater benefits for the enterprise.

2. E-commerce can reduce transaction costs

For general production companies and commercial enterprises, an important area of ​​e-commerce applications is to conduct advertising and market research through the Internet, build a global marketing network, and establish an intermediary sales channel. Internet channels can avoid the intermediate links such as wholesale and retail in the traditional sales channels, so that manufacturers can directly contact consumers. Manufacturers can complete the flow of goods through retailers, reducing circulation costs and transaction costs. Accelerate the flow of information. Enterprises can use Internet resources to establish personalized e-commerce websites, conduct corporate publicity on the Internet, display their products, establish corporate image, expand the influence of the company, and carry out promotional activities, thereby greatly reducing the company's promotional costs. Compared with traditional marketing methods, e-commerce greatly reduces the cost of online marketing.

3. E-commerce can reduce turnover and management costs

Traditional business activities are completed by a supply chain consisting of multiple intermediate links. These intermediate links inevitably consume a large amount of material resources. E-commerce can shorten the length of the supply chain, reduce intermediate links and turnaround time, and save material resources. Taking a traditional commercial enterprise as an example, e-commerce can optimize corporate supply chains and implement direct sales, which can reduce inventory and business area, and reduce turnover and management costs.

Fourth, the problems existing in traditional enterprises

While e-commerce brings opportunities to traditional enterprises, it also poses a strong challenge to traditional enterprises. The challenges that e-commerce brings to traditional companies are:

1. Low level of informationization in traditional enterprises and lack of e-commerce talent

In addition to the well-established public information infrastructure, traditional enterprises are also inseparable from the informatization construction within the enterprise. However, at present, the basic informatization of traditional enterprise in our country is generally backward, which seriously hinders the application of traditional enterprise e-commerce in China. development of. In addition, the lack of e-commerce talent is also an important reason to hinder the traditional enterprises to develop e-commerce. E-commerce projects require specialized e-commerce talents from project development, development to investment, and future maintenance. However, most traditional enterprises rarely have IT departments, let alone set up CIO positions, and they both understand and understand the technology. The management of complex e-commerce talent is even rarer in traditional enterprises. Although it is possible to use IT outsourcing services to manage its own IT resources, it is difficult to implement because of the low level of marketization.

2. The internal management of traditional enterprises does not meet the requirements of e-commerce development

The development of e-commerce by traditional enterprises will inevitably lead to changes in internal operations. The organizational structure, business processes, and management models of enterprises must be adjusted accordingly. First of all, the organizational structure of traditional enterprises has caused the division and overlap of various departments within the company, and has been unresponsive to market demands. However, e-commerce requires a flat organizational structure. Secondly, some traditional enterprises have obvious technical colors to develop e-commerce. They believe that the platform is well established and e-commerce is successful. As a result, their large investment in information technology has not produced the expected return. In fact, building a good technology platform is only a small step for e-commerce to be successful. It will fully automate the existing manual processes without analysis, and hopes to e-commerce to get rid of business difficulties. As a result, the manual process is unreasonable. Automation of processes can only become the wrong amplifier. Because there is no organic combination of business processes and information systems, rigid business processes make the advantages of e-commerce not fully realized. Therefore, the biggest challenge facing traditional companies in e-commerce is how to transform the business process of the enterprise. The key to e-commerce application is "business". Only the innovation of the business model can stimulate the strong vitality of e-commerce, and can realize the essence of business activities - profit. "Electronics" is the necessary means to realize "business".

3. There is no unified model for e-commerce

For different industries, there may be huge differences in the process and mode of implementing an e-business transformation. The traditional industrial enterprises implement electronic commerce is the use of information technology to achieve automation, electronic, digital and networking of all business activities of industrial enterprises; use electronic means to carry out various business activities, related production and business process management in the world and general Service. Traditional business enterprises launch electronic commerce to provide producers and consumers with more choice opportunities. On the one hand, they can make cross-border and cross-border online transactions become a reality. At the same time, they can also create new circulation trades that are low-cost and fast-running. channel. The implementation of e-commerce in service industries such as traditional finance and tourism can greatly reduce transaction costs and increase customer loyalty through personalized services.

At present, China's e-commerce is lacking in the ability to innovate in business models. Many companies copy the business models and management methods of successful e-commerce companies abroad, and do not combine enough with China’s actual national conditions. The final development is not smooth. E-commerce companies want to take an advantage in the competition, especially for those who enter, it is particularly important to conduct good market segmentation and business model innovation. For example, it is feasible to innovate in content provision, after-sales service and customer relationship management. Traditional Chinese enterprises must catch up, and they can remain invincible in the world competition after joining the WTO.