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Lesson 2Commercial implications
ObjectiveDescribe the Effects of eBusiness on the Existing Business

Describe the Effects of eBusiness on the Existing Business

As we shall see later in this module, the changes that eBusiness brings to a company can be far reaching. It is important to note that without proper control and coordination, these changes can damage the business; and in extreme cases, even be fatal for the company.
It is therefore vital that the desired changes are identified, understood, constantly monitored, and managed as the eBusiness is established.

Commercial implications


In understanding the commercial impact of a change to eBusiness, the executive might ask the following questions:
Is this a short-term solution or a long-term feature? For example, the eBusiness may be viewed as a learning vehicle for the company, which may intend to replace it with a more robust and better targeted solution later.
Is the change to eBusiness aimed at reducing the size of an organization or changing its role, or is it intended to grow the scale of the operation as a result of increased business? In any case, eBusiness has commercial implications for company image, budgets, scale, and viability. The MouseOver below describes each of the considerations for which the executive will need assurances.

MouseOver MouseOver

Commercial Significance when introducing Ebusiness
As we see in the MouseOver above, the changes that eBusiness may bring to businesses are wide-ranging. Let's look at an example.

Impact of new routes to market

New routes to market have especially important commercial implications. In service industries, this effect can be a strong negative for eBusiness, especially for established players. For example when Automatic Teller Machines (ATMs) were introduced into the United Kingdom (UK), the banks expected to see customer transactions migrate from the manned teller stations in their branches to the ATMs in equal number. In fact, the overall transaction numbers grew, and although there was a reduction in branch staff-managed transactions, the reductions were not on the scale the banks had expected. As a consequence, the anticipated cost reductions were never realized, and the business reasons for ATMs came under serious criticism.
Automatic Teller Machines: Machine that lets you do your banking without dealing with a person. At ATMs, you can take cash from your account, make deposits and move money between accounts. All you need is a password you key in and an access card. Do not confuse the acronym ATM with Asynchronous Transfer Mode, which is a means of transferring data across a network in the form of packets or cells with a fixed size.

Managing this change

The important lesson here is that eBusiness will impact the existing business dynamics. In anticipating, planning for, and managing this change to eBusiness, its potentially damaging effects can be transformed into benefits. On the other hand, if the effects of the change are ignored, then they might damage the business, as well as the reputation of the architect.
In the next lesson, we will talk about identifying the operational support requirements for eBusiness.