E-Commerce on the Rise

By: Leroy A. Binns Ph.D.

Commendation is in order for the city of Washington DC that sanctioned access to advanced technology in the form of the internet, a computer based global information system in the late 1980s culminating in the replacement of mechanical with electronic functions by way of the worldwide web. This conversion while facilitating past obligations both military and academic now encompasses e-commerce.

E-commerce, a cost effective and time efficient means of operation which adopts the general principles of traditional marketing with the exception of its reliance on networked computers is utilized by companies to advertise, sell, buy and distribute products and provide customer service and buyers mainly for purchasing purposes. Further tasks such as business to business transactions namely the exchanging of financial information and accessing of intricate databases are central to the exercise.

Since its inception the maturity of the internet at 100% every nine to fourteen moths and the expectation for such to expand beyond 407 million users by 2001 worldwide is responsible for the explosive evolution in e-commerce. Analysts have reported that transactions which incorporates the display of multimedia documents (e.g., combination of text, photographs, graphics, audio and video) resulting in consumer purchases of automobiles, furniture, computers, electronics, airline tickets, hotel rooms, clothing, books and most commodities imaginable grew from $11.2 billion in 1998 to $31.2 billion in 1999 and are predicting that the monetary outcome from such mode of sales and service will yield $380 billion by 2003.

According to Wayne Hanson, Human Resource Manager for Systems Integration Services at Control Data Systems, “Electronic commerce and systems are pushing the world of business in a new direction.” With retailers from auto, airline, garment and food industries to name a few who have benefited immensely from electronic prowess vying for increased revenues in a competitive arena, supply chain management establishments are aggressively pursuing updated applications. In fact US retail systems integration which totaled $2 billion in 1996 has doubled at the turn of the century and continues to grow at a rate of 26% a year.

A study released in 1997 by Computer Sciences Corporation and Consumer Goods Manufacturer magazine discovered that US retail producers are focusing on the usage of information technology to integrate function and business processes thus streamlining operations. The enhancement of information networks involving groupware, local area arrangements and intranets is common place. Companies are also deploying new software to coordinate research, development manufacturing, logistics, sales and marketing abilities to endorse growth.

In a domain of glasnost void of uncompromising admittance and geographical boundaries non-traditional players who would otherwise lack an opportunity to vocations in business are entering the marketplace as entrepreneurs and capturing an audience without a physical presence and overhead cost. Despite bankruptcy or closure of 225 dot com enterprises in 2000 and an additional 537 the following year evolutions also include the introduction of an internet mall initiated by the likes of Microsoft. Based on Reuters reports Hewlett-Packard, Visa/Mastercard and United Parcel Service along with European counterparts are parties to this experiment that would alter the capabilities of e-commerce.

As the terrain continues to offer immeasurable potential technical challenges abound. Engineers are confronted with the possibility of congestion and have therefore created dense wave division multiplexing to transfer a greater amount of bits per second across optic fiber and sophisticated electronic processors to address routers and other packet handling equipment. In addition the professionals are in the process of introducing IPv6 to accommodate the shortcomings of the IP version which has a limited address capacity and an expansion of domain names is under consideration.

Politicians are presented with a formidable task regarding the regulation of the phenomenon in question. Discussions involve the passage of laws to control deployment and use, the imposition of taxes on e-commerce, the management of content and security and privacy concerns. However attempts to censor as with the Communications Decency Act of 1996 has oftentimes been considered constitutional infringement on the right to free speech and the absence of expertise hinders the imposition of a tax formula and assurance measures.

In short amidst controversy the contributions of e-commerce are invaluable and speculations about its future albeit unclear are promising.