The 8th Scientific Conference forInformation Systems

And Computer Technology

"E-Business Administration: The Road To Future Success"

Cairo: 13-15 February 2001

E-Business: Perspective And Future Prospects

Prof. Dr. Mohamed M. El Hadi

Cairo: January 2001

E-Business: Perspective

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And Future Prospects

Prof. Dr. Mohamed M. El Hadi

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INTRODUCTION The world entered the 21st century on the wave of technology optimism. Far from bringing the world to a halt at the end of 1999, information and communications technologies (ICTs) seem capable of generating a new level of global prosperity> Around the world, ICT-led growth is raising productivity, creating jobs, and increasing incomes. This ICT-led expansion is at risk, threatening theglobal economy. Global e-society stands at a turning point. Action or inaction by national governments and industry leaders will produce a very mixed set of outcomes, leaping from an agrarian or industrial base into the knowledge economy. Others will fail to take the necessary steps and will be left behind in the race for cyber markets. Therefore, ICTs are stepping into a new role on thecorporate stage, taking their steps as full partners in planning business growth and success. Since ICTs have established themselves as integralpart of business, the next stage in ICT business relationship is already emerging. The technology group's new role casts it as a proactive player in helping organizations decide how to grow their business, what to do, when to do it, and with what resemblance projections of success.

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This shift for updated reminder to top management: ICTs are more than enablers for getting things done are. They rank as partners in decision -making processand in the effort to improve business operations. Today, ICTs link to implement business strategy is generally accepted. This kind of acceptance has been confirmed in the ICT business relationship, which involves participation in planning, policy building, and enterprise wide operations and decision-making. The technology group has much to bring to the corporate planning, including unprcented speed in doing business unparalleled connectivity. Increased connectivity requires an environment thatencourages private sector investment. Effective e-leadership depends on effective government industry partnerships. Improved information security entails clear enforced legal frameworks and public education about security. The development of human capital necessitates incentives to attract, train, and retain the best technical and managerial talents. A world-class e-business climate exhibits competition, transparency, predictability, broad participation, andan up-to-date financial service infrastructure. It is to be noticed that network economy has just begun. The world is at early stage of the revolution that information and communication technology is creating. When every person and device is connected tothe network, economic, political and social relationships will change forever. The balance betweenintellectual and material power, the concept of privacy, the nature of information ownership, and the purpose of travel will be transformed. The potential of the networks to assist in bringingprosperity to all businesses is enormous. Exciting opportunities abound in each of the business enterprises.

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Digital firms or businesses will examine each specific situation carefully and make sound investments, turning knowledge of risk into competitive advantage. Attentive country will remove barriers to competition and leverage market led growthto the benefit of all citizens. Sustained progress requires collective action at INTERNET speed, but withtradition care. The objectives of this paper will contribute to: Promote awareness of the need for action to increase the electronic readiness throughout the Egyptian society. Focal attention on where action is needed most. Help businesses evaluate e-business opportunities. Encourage the Egyptian businesses to improve the climate of e-business and move forward to e-government and e-society. Establish clear e-business evaluation criteria that applysome measures towards e-business movement.

COMPETITIVENESS ANDTHE USE OF ITT TOOLS

1. ICTs CONTRIBUTION TO IMPROVING COMPETITIVENESS:

Information and communication technologies (ICTs) are already having a widespread impact on society, and the potential for progress in many socioeconomic areas is very huge. ICTs promise to deliver improved services and access to information for large sections of society at large.

2. COPETITIVENESS AND INDUSTRIAL CHANGE :

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Recent literature on globalization underline the link between competitiveness and rate of change inmodern economies. Success depends on the ability of business enterprises to respond quickly to market changes by transforming their product processes and structures. Because businesses are embedded in the economic and social structures, particular to each country, institutional change is also essential for competitive growth in an open economy.

3. CHANGE AND KNOWLEDGE ECONOMY : In open advanced economies like that of the

U.S.A., the E.U., or Japan, etc., the principal sources of competitive advantage are intangible factors, such as skills and education, intellectual property rights, research, brand names, distribution structures, enterprise re-engineering and the whole range of business services. Enterprises are increasingly facing a new complex environment in whichrelationships are shaped by value-chain re-engineering, new intermediaries and the creation of new types of partnerships. It is the innovative application of new ideas and processes, which distinguish growing enterprises and economies from slower rivals. It is only by exploitation of these comparative advantages to create high added value thatthe Egyptian business enterprises can compete in global markets against-partners that depend on other advantages, such as lower costs for resources or labor, or indeed depend on technological excellence.

By revolutionizing business practices, challenging established value chains, transforming traditional manufacturing and distribution function, the network economy presents radical new challenges both for businesses' strategies and government policies.

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The Internet revolution implies profound changes in Internet organization of businesses, in relationships between trading partners and in the shaping of sectoral markets. With the acceleration of global competition and the rapid emergence of new competitors from the most unexpected quarters, the choice for Egyptian companies is stark; it is between e-business and non-enterprise.

The issue is no longer to use ICTs to reduce costs, the focus of traditional ICT policy in Egypt. Helped by the rapidly expanding ICT market and the wide availability of generic, off-the-shelf, affordable solutions. Egypt businesses and industrial sectors have been broadly as successful as their international and foreign competitors in harnessing ICT by cut costs, improve productivity and reduce timeto market.

However, the global digital economy, the competitive challenge has shifted beyond mere cost savings or efficiency gains. It is not merely about the take-up of ICT, or about Internet connectivity. Itis not about equipping businesses. It is about using such tools in an innovative manner, building new markets, shaping new value chains, and creating new functions, new businesses and most important new jobs.IT is noticeable that the Egyptian businesses still need to do more to group the opportunities of the rapidly changing global business market place.

4. ICTs': TOOLS OF CHANGE: It is not what you invest in ICT; it is what you

do with it.ICTs are already in widespread use throughout

the economy, and although there is general agreement on the economic benefits of ICTs investment, the extent of these benefits will vary widely depending onhow they are used. Most organizations start by using

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ICTs to automate existing processes, which often helpsto improve quality, reliability, control and throughput. However, the real benefits start appearingwhen the organization has gone some way down the road and become sufficiently confident and familiar with the tools to use them to change the way it operates, and even to shape or create new markets.

ICTs represent a key medium in this process, enabling the development of intangible factors and assets and their optimal exploitation, By focusing on the factors, businesses can gain, not just incremental, but qualitative advantage over their rivals. Some of the most important of these transformations are already apparent in the commercialworld, for example in electronic business and electronic commerce.

Others can be discerned, for example in public services such as health, tendering, taxation, and local government.

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E-Business's CONCEPTS ANDSTRATEGIES

1. E-BUSINESS CONCEPTS : In its simplest sense, e-business is the use

of INTERNET technologies to improve and transfer key business process.

Most business enterprises understand this and have begun the evolution from traditional business practices to e-business. Many have already, begun to

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Web-enable core processes to strengthen customer service operations, streamline supply chain and reach existing and new customers. The accessibility and broad reach of Internet have forever changed customers' expectations regarding support. Hence the requirement for massively scalable, reliable and secure electronic foundation, which includes reliable and available servers, industry-leading software and middleware, and world wide consulting services from experts with industry-specific knowledge.

Therefore, an e-business is an organization that connects critical business systems directly to their customers, employees, partners and suppliers viaIntranet and over the Web.

2. WHY E-BUSINESS? In a few short years, e-business has gone

from concept to undeniable reality. For good reasons, it works for everyone: customers, businesses and governments.

The primary values of E-business are cost savings, revenue growth, and customer satisfaction.

Having realized the benefits of Web-enabling individual business processes; many companies are now seeking further development by integrating new and existing e-business applications to technologies.

E-business is to build dynamic and adaptable infrastructure that allows businesses to partner and transact with vendors and suppliers.

Therefore, e-business assesses the ability torespond dynamically with changes and challenges. In the future, businesses will have to respond quickly and dynamically to sudden changes in market conditions, such as on unforeseen price change by a competitor or an opportunity to immediately trade witha new partner or in a specific market area.

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The business with the most flexibility and the quickest response time will be the one that succeeds. Any person that will want ICT solutions thathave built in flexibility in features such as content management, order management, dynamic pricing and payment, and international trading capabilities has todevelop his e-business.

Increasingly, customers will expect and employees will require access to the information that they need anytime, anyplace. They will need customizedinformation tailored t a range of devices like, mobilephones, Internet, etc. E-business will want a partner that has combined experience in e-business, leading edge-Web enabling software applications; partnerships with wireless service providers and the ability to develop comprehensive end-t-end Web-enabled solution for customers' today.

Therefore, besides the above benefits that e-business could gain in the new open and competitive market. There are some other advantages, among them:

Improve cost reduction and work productivity.

There are the cost savings, even an incremental cost

reduction of 5 % has the same impact onbottom-line

profits as a 30 % increase in sales. Increase shareholder value. E-business can

dramatically increase the business's Shareholder value.

Improve business profitability. E-business can improve he enterprise overall profitability.

3. E-BUSINESS STRATEGIES:

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E-business is more than the latest rage in information and communication technology (ICT); it is the new order. Companies such as Amazon.com, E*Trade, and Yahoo, owe their existence to e-business, and it is revolutionizing business as we know it.E-business depends not only on new technologies, but also on new business strategies.

The key technical premise of e-business is to Web-enable all information resources: e-business applications, legacy applications, output devices, a so on. Then these resources can be distributed anywhere there is network access, either Intranet or Internet. The premise of e-business is great, but limitations must be recognized.

There are ongoing concerns about Internet security, bandwidth and quality service that must be considered by anyone thinking about relying on Internet-based applications to support critical business functions.

E-business will continue to grow because it offers real benefits. But e-business is only a tool, so it must be used properly to provide those benefits.

It is interesting to notice that the Internet has revolutionized the way we do business. Therefore, e-business's strategy has to offer the particular enterprise fundamentally new ways to expand the markets in which it could compete and streamline its business processes to deliver products and services more efficiently, attract and retain customers in new and innovative ways.

4. ICTs ROLE IN E-BUSINESS: Over the past 30-t0 40 years the use of ICTs

have spread throughout the whole society. In the past few years that use has accelerated dramatically, a combination of falling prices and the advent of Internet have put very powerful tools within the reach

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of customers and large and small businesses everywhere. The result of this change, many call it revolution, which is to provoke widespread change in industrial structures, change in the relationships between suppliers and customers, between employees andemployers, between business and indeed between citizens and government.

What is important for users is the availability of technologies and the access to the best solutions at affordable costs.

5. E-BUSINESS INFRASTRUCTURE (SERVICE / EQUIPMENT):

The rate of growth in the use of ICTs and applications is clearly linked to the efficiency of access to the network infrastructure. This can be considered broadly as two inter-linked areas largely but not only, telecommunications, and equipment.

Telecommunications services are rapidly evolving within the whole world in large as well as inEgypt in recent years. This has already had the effectof driving down prices and providing new services, butthe cost of access is still not negligible.

Now, following deregulation, other options oftelecommunications are becoming available, such as cable, satellite and wireless, which also generate competition between them-selves.

Networks also use a wide variety of equipment, with the most critical for service customers being terminal equipment. A key indicator ofthe rate of development of ICTs, and Internet usage, is the rate of take-up of PCs, especially those equipped with modems for use with Internet.

PCs are not the only type of equipment we should consider. New generation of digital TV and set-top-boxes will soon come on the market-offering alternative means for accessing the Internet,

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especially where connected to broadband. New generations of mobile phone also offer excellent data and Internet access. And new generations of smart cards enable a wide range of individual security related services and transactions.

6. FACTORS AFFECTING E-BUSINESS SUCCESS: The following factors affect the success of

e-business prospect, especially in Egypt: The degree of competition of

telecommunications: This has a direct impact on the development of broadband access infrastructure, costs and emergence of innovative services.

Awareness : Still insufficient among consumers, business people or public administrations, who need to understand better the benefits they can expect from using ICTs.

Education and Training : There is a serious lack throughout Egypt, for example, of ICT-related skills in the workforce and consuming public. Policy measures in this aspect can be extremely important in facilitating development of digital economy.

Promotion of Entrepreneurial Spirit : A key element in optimizing Egypt's performance in these important markets. Despite the impressive evidence that a new generation of Egyptian entrepreneur is starting to exploit the digital economy, more needs tobe done to improve the conditions under which enterprises operate. Both the vigor, or not, of competitive climate the weight of regularity environment may well be determining factor.

Cultural : Cultural reasons are sometimes evoked as a reason for differing regional rates of ICTs development. It is a complex issue: many regions in Egypt, for example, often more isolated, have enthusiastically embraced the Internet for the means

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it offers to create opportunities for economic activity. On the other hand, language is already stilla problem for many citizens.

________________________________________________E-READINESS CRITERIA FOR

E-BUSINESS GROTH1. INTRODUCTION: "E-Readiness" measures the capacity of the

nation to participate in the digital economy. Therefore, e-readiness is considered the source of national economic growth in the networked society and the pre-requisite for successful e-business. Neither the country, nor the business enterprise can prosper unless the basic building blocks of "e-readiness" are in place.

There are five interrelated attributes and criteria concerning the e-readiness of the country to face e-business movement. These criteria or attributesare:

Connectivity, E-leadership, Information Security, Human Capital, and E-Business Climate. In order to make sound business or policy

decisions, the country like Egypt and its business enterprises must focus on the many underlying details that, when considered together, could produce the favorable condition for e-business.

2. CONNECTIVITY:

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Are networks easy and affordable to access and use?

The ability to exchange information, goods, and services with the rest of local and world businesses, including affordable information and communication technologies (ICTs) and services, reliable electrical power, and a sufficient condition for participation inthe networked economy. Therefore, connectivity addresses the overall availability and reliability of the infrastructure. The key elements and attributes include the following:

Availability of wireline and wireless communication services; community accesses centers (free and paid), and networked computers in businesses, schools and homes.

Affordability and reliability of network access, including the cost of service, downtime, and the prevalence of sharing access among individuals and businesses.

Underlying infrastructure, including the reliability of electrical supply for business - critical computer companies and the ease of importing and exporting goods and of transporting them within Egypt. The explosion of mobile access to the network willhelp change the picture of e-readiness of the societyto assess the e-business movement. Wireless will become the dominant form of access to the network communication, as new arrivals choose the ease of wireless networking from a hand held device rather than a sometimes intimidating as many expensive computer keywords. However, wireless access to network services coupled with the general rising demand for connections, will create huge opportunities and

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challenges for network service and content providers.The small screens on handheld, mobile devices and themore limited bandwidth of Egypt, as well as most developing countries, wireline connections require a very different way of thinking about design than the huge screen, high bandwidth PC-based environment. The broad benefits of e-business and e-government will not be available without substantial investmentsin infrastructure. These investments must be made by private sector, which requires a suitable investment climate. Critical to that climate, and to affordable communications services, is the ability to compete. Where monopolistic telecommunications suppliers remain in place, progress will be slow.

3. E-LEADERSHIP: National progress on E-Readiness depends on

industry to supply solutions that are responsive to the specific needs of each market. But without the commitment of the government conditions favorable for advancement, progress will be slow and uneven.

E-Leadership addresses the scope and nature of business enterprises and government efforts to promote the networked world within Egypt and promote the country as a regional or global center in the networked world. The key elements and attributes of the e-leadership include the following:

Priority given by the government to promoting thedevelopment of an e-society on a national level.

Extent of demonstrated progress on e-government, including efforts to automate governmental processes.

Quality of partnerships between business leaders and government to improvee-readiness.

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Level of effort to promote access for all citizens.

Already, Egypt through the national information and communications development plan, started in December 1999, is benefitingfrom strong e-leadership. It is demonstratinga limited awareness of the critical importance of helping the country more forward quickly into the new economy. The government of Egypt is beginning to automate its own government processes, and offering online services to the Egyptian citizens through this e-government. It is needed to create public-private council that work together to meet the national goals. For the most part, efforts toassure access for all Egyptians have not reached much beyond the discussion stage.

5. INFORMATION SECURITY: Can the processing and storage of national information be trusted? A vital aspect of e-readiness is the level of information security that an emerging market can answer. A base the question is one of trust. Obsoletelaws or week enforcement to protect the creation, maintenance, and dissemination of information make aninhospitable environment in which to conduct e-business. Poor protection of intellectual property can stunt the growth of the national software development industry. Inadequate protection of personal and business data creates barriers to information exchange. Failure to recognize electronicsignatures or to permit the use of encryption undercuts trust in the new ways of doing business.

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The Key elements and attributes of information security for e-business include the following:

Strength of legal protections and progress in protecting intellectual property rights, especially to software.

Extent of efforts to protect electronic privacy.

Strength and effectiveness of the legal framework to address and prosecute computer crimes, authorize digital signatures, and enable public key infrastructures. The protection of intellectual property is essential to promote local e-business, without confidence that they will be rewarded for their work, content creators, from artists to software engineer, have little incentive to create, hampering the development of local context and a strong local software industry. Similarly, foreign e-business must be factors in the risk of loss of intellectual property when evaluating investment opportunities. In many of countries, software piracy still remains serious issue. Expectations of privacy are very widely across cultures. As e-business continues to expand globally, the need for harmonization of methods and extent of privacy protection will grow. Although, some degree ofonline privacy will ultimately be recognized as a basic right, in most of the sectors in any country, e-business must stay abreast of specific privacy laws and norms in each market. And individuals have little assurance that their personal information will be treated with any great respect and care. In face of cumber crime, Egypt as many countries, is relying, up to now, on standard copyright, personalproperty, and consumer protection laws and legislation. In Egypt which is already predates the

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birth of cyberspace, is being drafting new laws for intellectual property, e-commerce and communications to be submitted to the People's Council for approval in the course of this parliament session. Digital signatures, encryption and the infrastructures to support their use are becoming essential to further the growth of e-business. Severalcountries have recently adopted laws that recognize the validity of electronic signatures, and most countries do not regulate the use of encryption up to now.

6. HUMAN CAPITAL : Are the right people available to support e-business and build a knowledge-based society? Egypt, as well as many nations of the world, faces an incredible need for more qualified people.Th shortages are greatest in four areas as follows:

Managers capable of completing complex technologyprojects.

Policy analysts who understand government regulation's tendency to dampen business, particularly in changing technology environment.

Local content creators aware of the network's potential.

Software, hardware and communications engineers. Beyond a cadre of skilled partners, e-business needs a population that is able to use the network and is interested in it. The key elements and attributes of the human capital of e-business include the following:

Quality and participation levels in the educationsystem, with an emphasis on efforts to create and support a knowledge-based society.

Cultural of local creativity and information sharing within the society.

Skills and efficiency of the workforce.

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The challenge of finding first rate information technology personnel involves theneed of quality as well as quantity. The combination of the demand of IT professionals and the perception that "anyone can use a computer" appears to have led to an increase in percentage of new IT employees who lack the training and professional values necessary to become superior IT professionals to deal with e-business. The IT professional, who realizes that the business of IT is business, is rare and highly valued. Even a candidate for a purely technical position needs to understand that a computer system is not just a collection of parts, but a cohesive structure in which the pieces inter-operate and inform each other in order to produce a business result.

7. BUSINESS CLIMATE :How easy is it to do e-business today?

While a country's connectivity, e-leadership, information security and human capital can each contribute to the quality of the e-business climate, which is the fifth essential criterion as tge other four criteria stated above. E-businesses operate in a complex context of regulatory policies and institutional arrangements that set and enforce the rules of private action in acompetitive marketplace. Where policies and practicesfavor e-business, returns on investment will be higher. Where competition is stifled on the rule of law is week; investors rightly demand greater premiumrisks. Key elements and attributes of e-business climate include:

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Existence of effective competition among communication and information services providers.

Transparency and predictability of regulatory implementation, openness of government, rule of law and general business risks (political stability, financial soundness).

Openness of financial and personal participation by foreign investors in ICTsbusinesses.

Ability of financial system to supportelectronic business transactions.

Much work is needed to promote a sound climate for

development of e-business, even in countrieswhere the leadership has recognized the need to act. Although, most countries are trying to open up markets to maximize competition and opportunity, many internal obstacles remain. Privatization, effective competition, and the independent regulation of telecommunication devices are understood to be necessary for success. Actual progress is often slow, as incumbents often yield their monopoly positions reluctantly. The degree of regulation of INTERNET services providers ranges widely, where government agencies attempt to curb market entry or control content investors and entrepreneurs will display increasing reluctance as better opportunities emerge elsewhere. Electronic transactions remain generally exempt from special taxes and

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customer duties, but must remain so far progress to continue. Similarly, enabling investment and participation from foreign firms invested in forming strong local partnerships is critical to success. Predictability is of great value to business, Today's fast changing economic and technology environment creates great uncertainty, and increases the risk to investors. This situation increases the valueof predictability in governance. Openness and transparency in governmental decision-making, coupled with a legal system that is clear and evenly enforced, will attract private capital and promote local entrepreneurship. Attention to the rule of law and open government can be a critical competitive edge in networked world.

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CONCULUSION No nation will become "e-ready" overnight.and nations that are today's e-leaders are

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not guaranteed to be tomorrow's. However, dueto the nature of the new economy, those nations and businesses that can adapt quicklyto new technology size new opportunities, andtake strategic risks will prosper. Less prepared economies have an opportunity to learn from the global community and leap to higher levels of preparedness? Business enterprises get a dependable evaluation and timely comparison of new market risk and opportunities from a reliablesource, one that came closer than most to predicting the outcome of the 21st century. Firms whose supply chains or marketing plans require e-commerce in their countries, must move quickly in an environmental rich with risk and opportunity. Businesses looking to expand e-business features in Egypt, for example, need to understand their risks and weigh them with the benefits of being 1st to market and long term growth potential. It is needed right now that the Egyptian government to now quite clearly an independent evaluation of its economy's readiness for the digital economy, the ability to compare readiness with other advanced countries, and the chance to promotethe country's progress to the global community. Anyway, the countries that are interested in reducing their information security risk. Expand their e-leadership, cultivating human capital, opening their infrastructures and creating a more favorablee-business climate need to develop concrete action plans and the means of cooperating witprivate sector leaders.

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The e-business environment should be builton the already demonstrated strengths in critical sectors such as mobile and fixed communications, consumer electronics, generalelectronic applications, software and systemsintegration, service systems innovation, digital broadcasting and rich content and network infrastructures.

Therefore, the priorities for any action should be:

To improve natural and personalized interactions with information society technology applications and services. Thisincludes multi-lingual / multi-model interaction systems that are adaptable to user's performances and lifestyle (e.g. sensitivity to gender, age and culture).

To foster the development and convergence of networking infrastructures and architectures including the integration of fixed, mobile, online and broadcasting technologies.

To develop embedded technologies, their interconnections and their full integration into the service infrastructure, the workplace and businessprocess. To develop applications and services that takes advantages of such systems.

To reconsider service provision in thecontext of any-where / any-time access to services and ambient dialogue modes including public services and, mediation and commercial transaction systems.

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To improve the openness of software and systems.

To improve the tools and methodologiesthat enable creativity in content production and presentation, in the context of covering access and delivery systems.

To emphasis trust and confidence as a general requirement for all technologies, applications and services.

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