Electronic Business: The Disadvantages.

As with the benefits associated with the use of E-Business, the disadvantages or drawbacks vary for both the consumer and the business. However, the common disadvantages that affect both the consumer and business alike include:

The existence of hidden costs, for example those associated with shipping goods, stocking and unacceptable delivery times, which are often not evident until the conclusion of the electronic transaction.
Network reliability problems may arise and may result from:

-Equipment failure of an ISP or network connection provider.
-Increased network traffic or inadequate bandwidth frequently results in long delay periods, especially when attempting to consolidate or finalise electronic transactions.
-Unintentional problems may arise in the event of lightning or a flood, regarding the effect of the natural hazard on communication lines.
-Human error may also result in difficulties for the conduct of E-Business, for example in the event that a network line is accidentally severed.

In addition, certain legal problems exist concerning the nature in which E-Business is conducted, these include:

-Software and copyright infringements.
-Business fraud e.g. in failing to deliver goods that have been paid for.
-Credit card fraud and identity theft. The disavantages of direct impact upon a consumer include:

The issue of the previously discussed, hidden costs.
Wariness concerning the security risks of providing both credit card and other personal details online.
Owing to businesses frequently selling their customer database information to marketing corporations, the email inboxes of customer's have, at times, been flooded with unwanted and unsolicited "spam" advertising mail. As a result, concern is growing regarding a consumer's online privacy, resulting in many seeking methods of protecting their identity etc from cyber attacks, for example through the installation of a personal firewall.

The disadvantages of particular concern to a business include:

With regard to network reliability, failed Internet connection and the resulting inability to serve customers may result in lost sales, lost customers and lost credibility.
The ease with which an E-Business may be established has resulted in increased amounts of competition, thus business face thin profit margins in which to operate. Therefore in order to be profitable, a business must generate high volumes of sales, most commonly achieved through the maintenance of a strong and loyal customer base.
The sense of synergy that results from the automation of an organisation's conduct of business and methods of operation, both internal and external, has served to make businesses increasingly dependent upon technological change and development, thereby ensuring ongoing costs, in order to maintain up-to-date.
Owing to the young, dynamic nature of Electronic Business, no established guidelines or rules are in existence, thus many of the current E-Business models are both unproven and untested.
The onus is placed on an ethical business to secure its online transaction data and safeguard it after its storage in a database. A business should endeavour to develop foolproof methods of doing this in order to maintain strong customer bases.
The impersonal nature of completing online business transactions, has made the provision of good customer service essential for the survival of an E-Business.

Go to page 6