Understanding E-Terminology
It is not easy staying abreast of the latest trends in technology. Every day new buzzwords are introduced for recycled concepts, and somehow you have to sort through the hype and find real value. To help you deconstruct e-business hype, we've defined the new and evolving product categories that seem to cause the most confusion.
E-Business
What better category to start with than e-business itself, the umbrella for most new Internet jargon.
E-business, or electronic business, encompasses everything that has to do with doing business on the
Internet. That includes buying and selling, collaborating, promoting, doing research, providing
online customer care, and just about any other business activity you can imagine. E-business is
about companies leveraging the convenience and ubiquity of the Internet to improve the way they do
business, make more money, and generate new opportunity.
E-Commerce
E-commerce, or electronic commerce, is about buying and selling goods and services online. It
includes two principal areas of commerce: Business-to-consumer (B2C), which involves transactions
between a vendor and individual buyers in the general public, and, Business-to-business (B2B),
which involves transactions between a corporation and its supply chain and partners.
EDI
Electronic Data Interchange (EDI) has been around for about 50 years. It is a standard format for
transmitting business documents between trading partners. It was developed to automate tedious
manual processes, such as filling out invoice numbers. Many large companies rely on EDI, but, in
its traditional form, it offers limited functionality and is problematic because it has not been
standardized worldwide. For instance, EDI does not easily accommodate various paper and envelope
sizes. Historically, EDI has required that companies purchase a value-added network (VAN) connection
using leased lines. Web-based approaches to EDI are rapidly gaining popularity for today's typical
e-commerce transactions.
ERP
Enterprise resource planning (ERP) software is modular and used most often to automate companies'
internal business processes, particularly those of manufacturers. It helps them track orders, plan
production schedules, and manage inventories. It is also used within finance and human resources
departments. Because it is complex and expensive, many companies are turning to service providers
who offer ERP services, which includes the ERP vendors themselves.
Extranet
An Extranet is a private business community that uses the Internet as the backbone for communication,
commerce, and collaboration. People often ask what the difference is between extranets and intranets.
Intranets are designed to give a group of trusted employees access to a set of resources within one
organization. Extranets allow organizations to extend mission-critical resources over the Internet to
partners, suppliers, customers, and other individuals outside the physical walls of the organization.
The distinction between intranets and extranets will eventually blur. In fact, it is extranet
technology that enables information and applications to be shared both internally and externally
because access can be controlled on a variety of parameters, such as an individual's role to the
organization rather than whether that person is coming in from a particular IP address. Because
partner networks, infrastructures, and security policies should not, and often cannot, be dictated
by the company hosting the extranet, solutions should be flexible enough to service heterogeneous
systems. Look for solutions or services that support multiple authentication methods, encryption
types, platforms, and protocols. Additional reading is available on Intranets and Extranets by
clicking here.
Portal
A portal is essentially a gateway, and in the e-business world, it is a Web site that serves as a
starting point to access a variety of information and resources. Internet portals like Yahoo and
Excite pioneered and popularized the term, and large corporations have started to apply the concept
to their own intranets and extranets in an effort to simplify access to valuable resources on a
network.
VPN
A virtual private network, or VPN, uses the Internet as the backbone for remote access and trusted
LAN-to-LAN connectivity. It is effective for securing traffic between two perimeters, but it does
not provide the management features or granular authorization and access control needed for true
business-to-business commerce and collaboration, where corporations need to connect their trading
partners, suppliers, and customers. VPNs operate on more of an all-or-nothing approach to access,
which works well for connecting branch offices but not specific individuals.
What It All Means
To put these terms into context, consider the following example. A manufacturing company has
designed an e-business architecture that allows its partners, suppliers, customers, contractors,
and some remote employees to access extranet resources through a portal interface. Some of the
applications on the extranet include a custom procurement system, ERP, an e-commerce storefront for
suppliers, and a webified version of an EDI system. The extranet infrastructure provides the
management and security platform that ties the other enterprise applications together into one
system for deriving real value from online business relationships. The extranet community is what
ultimately drives revenue and competitive advantage. Forrester Research predicts that by 2003
extranets will dominate business trade, which reinforces the idea that extranets are the foundation
of e-business. As mergers and acquisitions intensify and organizations increasingly rely on outside
consultants and outsourcers, the need for secure extranets becomes even more urgent. Companies are
no longer asking "Should we build an extranet," but rather, "How do we build an extranet community
that gives us a competitive edge." Deploying the right extranet solution now, one that attacks the
challenges of the extranet head-on, is critical to e-business success.
The General Center for Internet Services can carefully design and build flexible and powerful Intranet & Extranet portal applications and tools, VPN's and complex eBusiness applications that will answer your most exacting and critical corporate needs in any industry. Upon contact, your GCIS technical representative will be more than happy to visit you and propose the best solutions for your company or organization.
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