Benefits and Limitation of E-Commerce

The Benefits of EC
Few innovations in human history encompass as many potential benefits as EC does. The global nature of the technology, low cost, opportunity to reach hundreds of millions of people, interactive nature, variety of possibilities, and resourcefulness and rapid growth of the supporting infrastructures result in many potential benefits are just starting to materialize, but they will increase significantly as EC expands. It is not surprising that some maintain that the EC revolution is just “as profound as the change that came with the industrial revolution”.
Benefits to Organizations:
The benefits to organizations are as follows:
1. EC expands the marketplace to national and international markets. With minimal capital outlay, a company can easily and quickly locate more customers, the best suppliers, and the most suitable business partners worldwide.
2. EC decreases the cost of creating, processing, distributing, storing, and retrieving paper-based information.
3. Ability for creating highly specialized businesses.
4. EC allows reduced inventories and overhead by facilitating “pull” –type supply chain management. In a pull-type system the process starts from customer orders and uses just in time manufacturing.
5. The pull-type processing enables expensive customization of products and services which provides competitive advantage to its implementers.
6. EC reduces the time between the outlay of capital and the receipt of products and services.
7. EC initiates business processes reengineering projects.
8. EC lowers telecommunications cost –the Internet is much cheaper than VANs.
9. Other benefits include improved image, improved customer service, new found business partners, simplified processes, compressed cycle and delivery time, increased productivity, eliminating paper, expediting access to information, reduced transportation costs, and increased flexibility.

Benefits to Consumers
The benefits of EC to consumers are as follows:
1. EC enables customers to shop or do other transactions 24 hours a day, all year round, from almost any location.
2. EC provides customers with more choice; they can select from many vendors and from more products.
3. EC frequently provides customers with less expensive products and services by allowing them to shop in many places and conduct quick comparisons.
4. In some case, especially with digitized products, EC allows quick delivery.
5. Customer can receive relevant and detailed information in seconds, rather than days or weeks.
6. EC makes it possible to participate in virtual auctions.
7. EC allows customers to interact with other customers in electronic communities and exchange ideas as well as compare experiences.
8. EC facilitates competition, which results in substantial discounts.

Benefits to Society
The benefits of EC to society are as follows:
1. EC enables more individuals to work at home and to do less traveling for shopping, resulting in less traffic on the roads and lower air pollution.
2. EC allows some merchandise to be sold at lower prices, so less affluent people can buy more and increase their standard of living.
3. EC enables people in third world countries and rural areas to enjoy products and services that otherwise are not available to them. This includes opportunities to learn professions and earn college degrees.
4. EC facilitates delivery of public services, such as health care, education, and distribution of government social services at a reduced cost and/or improved quality. Health-care services, for example, can reach patients in rural areas.

The limitations of EC
The limitations of EC can be grouped into technical and nontechnical categories.
Technical Limitations of EC
The technical limitations of EC are as follows:
1. There is a lack of system security, reliability, standards, and some communication protocols.
2. There is insufficient telecommunication bandwidth.
3. There is software development tools are still evolving and changing rapidly.
4. It is difficult to integrate the internet and EC software with some existing applications and databases.
5. Vendors may need special Web servers and other infrastructures.
6. Some EC software might not fit with some hardware, or may be incompatible with some operating systems or other components.
These limitations will lessen or be overcome; appropriate planning can minimize their impact.
Nontechnical Limitations
There are many nontechnical limitations that slow spread of EC; the following are the major ones:
1. Cost and Justification
2. Security and Privacy
3. Lack of trust and user resistance
4. Other limiting factors