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ACCA Strategic Professional · Strategic Business Leader · E-business: value chain

Brindle Components, a manufacturer, has connected its production planning system to the order systems of its three largest customers and the delivery scheduling systems of its key suppliers. Customers do not pay online, and no consumer sales are made through the internet. A director states that the firm has not yet adopted e-business because it has no e-commerce website. Which response is most accurate?

The director is wrong. E-business is the electronic integration of business processes, including links with customers and suppliers, and does not depend on online consumer sales or payments. Brindle's connected planning, ordering and scheduling systems are e-business even though it lacks an e-commerce website.

  1. AThe director is correct, as e-business requires online sales to consumers
  2. BThe director is correct, as supplier links are only e-business if payments are made electronically
  3. CThe director is incorrect, as e-business covers electronic integration of processes with customers and suppliers even without online consumer salesCorrect
  4. DThe director is incorrect, as the firm is practising e-marketing, which is the same as e-business

Explanation

E-business covers using technology to transform business processes and relationships, including with trading partners, not just selling online. Integrating planning, ordering and scheduling systems with customers and suppliers is e-business. Confusing it with e-commerce leads to the director's error; e-marketing is a separate, narrower concept.

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